Which accounting standards a Kenyan SME follows

When a Kenyan company uses full IFRS or IFRS for SMEs, when sustainability reporting reaches it, and how to keep books that support year-end statements.

By Achekam · 11 October 2026 · 4 min read · For Running a business businesses in Kenya

The first page of your annual financial statements carries a sentence most owners skip: the statements "have been prepared in accordance with" a named set of standards. For most private Kenyan companies that name is IFRS for SMEs. For some it is full IFRS. The choice shapes what the statements contain, how certain items are measured and how much work goes into the notes.

You do not need to know the standards in detail to run a business. You do need to know which one applies to you, why, and what your books must look like for your accountant to produce statements under it without weeks of rework. This article covers all three, and the sustainability reporting that is on its way.

Full IFRS for publicly accountable entities

Kenya adopted International Financial Reporting Standards for periods beginning on 1 January 1999. Publicly accountable entities, including State-owned ones, must use full IFRS.

"Publicly accountable" is a defined idea in the standards. Broadly, it captures entities whose securities trade in a public market and entities that hold assets in trust for a wide group of outsiders as a main business, such as banks and insurers. If your company is in that group, full IFRS is not a choice, and your accountant will already be working to it.

IFRS for SMEs for everyone else

An entity that is not publicly accountable may use IFRS for SMEs. It is a shorter, simpler standard written for private companies: fewer options, lighter disclosure, and simplified treatments in areas that are costly to apply in full.

"May" matters. A private company can choose full IFRS instead, for example because it expects to raise money from investors who want it, or because it belongs to a group that reports under full IFRS. Most owner-managed companies do not need to, and their accountants prepare statements under IFRS for SMEs.

The IFRS Foundation's jurisdictional profile of Kenya sets out the position: full IFRS for publicly accountable entities, IFRS for SMEs permitted for others, and ICPAK's role in adopting the standards.

ICPAK's place in the picture

ICPAK regulates accountants in Kenya under the Accountants Act 2008, issuing practising certificates and annual licences. It is the professional body your accountant and auditor answer to, and it is the body behind the adoption of the standards in Kenya. If you are appointing an auditor to report on statements prepared under either standard, the checks to make are in checking your Kenyan auditor's ICPAK credentials.

Sustainability reporting, by size and date

Under ICPAK's roadmap, IFRS sustainability reporting becomes mandatory in Kenya:

It has been voluntary for all organisations for periods beginning on or after 1 January 2024.

For a small private company, 2029 may feel distant. It is closer than it looks if your customers are large companies or public interest entities, because their own reporting may lead them to ask suppliers for information sooner. Ask your accountant which band your company falls in and what, if anything, you should start recording now.

Books that support the year-end statements

Whichever standard applies, the statements are built from your books. The tidier the books, the less the accountant has to rebuild.

Achekam gives each business management accounts: an income statement for a chosen period beside the period before, and a balance sheet at period end, both added up from the business's own journals and exportable as PDF or CSV. Two points to know when you use them for year-end:

• The year-to-date preset starts on 1 January, not on your own year start. A company with a June year end should choose its own dates rather than rely on the preset.
• There is no year-end closing entry. Profit is not closed to retained earnings; it shows as its own line on the balance sheet. That is fine for reading the position during the year, but your accountant will present retained earnings in the statements, so expect the year's profit to be carried into equity there.

Neither point stops your accountant from preparing statements under IFRS or IFRS for SMEs. Both are worth mentioning when you hand the books over, so nobody is surprised.

Working with your accountant on the year-end

If your accountant also uses Achekam, you can appoint the firm from inside your workspace by its Achekam address or firm code, as your accountant (or auditor, tax practitioner, payroll provider or adviser), with an access level you choose. The firm accepts or declines. Its people then work in your books rather than on a copy.

Before the year-end, agree a short list with them:

1. Which standard the statements will follow, and whether anything has changed since last year.
2. The dates of your financial year, and the reports they want run for those exact dates.
3. Bank reconciliations completed to the year-end date.
4. Supporting schedules for assets, loans, accruals and stock.
5. Who in the business answers their questions, and by when.
6. Whether your company needs an audit, and who will do it.

The statutory filings that follow your statements, such as the annual return to the Registrar, are covered in filing the annual return with BRS. Settle the standard first, though: everything else is easier once you know which rulebook the statements follow.

General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.