IFRS for SMEs or full IFRS: choosing the framework

Which framework a client in South Africa, Nigeria or Kenya should use, why public accountability decides it, and how the choice is set up in Achekam.

By Achekam · 11 October 2026 · 5 min read · For Accountants & audit firms in South Africa, Nigeria, Kenya

A new client's last statements were prepared under full IFRS, with forty pages of notes for a company with one shareholder and a bank overdraft. Another client's were prepared on IFRS for SMEs, although it now holds deposits for a large group of customers. Both choices were probably made once, years ago, and never revisited. Both deserve a fresh look, because the framework decides almost everything else in the statements: the policies, the measurement of key balances, the disclosures and the length of the notes.

This article sets out how the framework question is answered in South Africa, Nigeria and Kenya, the concept that drives it in all three, and how the decision is recorded and carried through in Achekam.

Public accountability and why it decides the framework

IFRS for SMEs was written for entities that do not have public accountability. Broadly, an entity has public accountability if its debt or equity instruments are traded in a public market, or are in the process of being issued for trading in one, or if it holds assets in a fiduciary capacity for a broad group of outsiders as one of its main businesses, as banks, insurers, securities brokers and pension funds typically do.

An entity with public accountability uses full IFRS. An entity without it may be permitted, or in some countries required, to use IFRS for SMEs, which simplifies full IFRS for smaller entities. The IFRS Foundation's page on the IFRS for SMEs Accounting Standard explains what the standard is, how it simplifies full IFRS, and that the third edition issued in February 2025 applies to periods beginning on or after 1 January 2027. Firms should plan now for the policy and disclosure changes that edition brings.

Public accountability is the starting point, not the whole answer. Each country's law and regulators decide which entities must, may or may not use each framework.

South Africa: IFRS for SMEs, full IFRS or the client's own policies

For South African companies, Achekam has statement templates on three bases: IFRS for SMEs, full IFRS, or the company's own policies. It also has templates for close corporations, non-profits, trusts, body corporates, trade unions, public entities and municipalities on GRAP, and sole proprietors or partnerships. The wording is written for South African practice.

Which basis a particular company may use is set by South African company law, depending on the company's circumstances, and the engagement partner should confirm it from the law before choosing. The template follows the choice; it does not make it. The entity types and templates are covered in more detail in statement templates for trusts, NPOs and bodies corporate.

Nigeria: full IFRS for publicly accountable entities, IFRS for SMEs for SMEs

At the time of writing, IFRS has been mandatory for Nigerian listed and other publicly accountable entities since 1 January 2012, and SMEs are required to apply IFRS for SMEs. The public sector uses accrual IPSAS under the FRC's roadmap.

One gap in the research Achekam relied on matters here: the criteria for what counts as an SME for this purpose were not found. Do not assume that the tax definition of a small company, or the company-law one, settles the reporting question. Check the FRC's current requirements for the client and record what was relied on.

Kenya: full IFRS for publicly accountable entities, IFRS for SMEs allowed for others

Kenya adopted IFRS for periods beginning on 1 January 1999. An entity that is not publicly accountable may use IFRS for SMEs, and publicly accountable entities, including State-owned ones, must use full IFRS.

Note the word "may". A Kenyan company without public accountability can choose full IFRS, for example because a parent company reports under it or a lender asks for it. Record the reason for the choice either way.

Recording the framework on the client and engagement

For Nigerian and Kenyan clients, each client's profile in Achekam has a Jurisdiction section with the client's own country and identifiers, and each Nigerian or Kenyan engagement shows its governing basis: regulator, standards, framework, company law and tax authority. A jurisdiction override is decided by a different person, so a client recorded in the wrong country cannot be quietly moved by whoever is preparing its statements.

For South African clients, the framework is set by the basis chosen for the statement template. In every country, put the decision and its reasoning in the engagement file, with the partner's approval: "IFRS for SMEs; company has no public accountability; permitted under the applicable law; confirmed with the client's lender that it accepts this basis."

Policies that change with the framework

The framework drives the accounting policies, and here the Studio needs care. Achekam's standard accounting policy wording is based on IFRS for SMEs and is labelled for review before issue. Staff can write their own policies, and notes take their figures from the mapped trial balance, with facts the trial balance does not hold left as '[to be completed]'.

So for a full IFRS client, the standard wording is a starting point to replace, not to edit lightly. The same applies to clients outside South Africa, since the template wording is written for South African practice. Areas that commonly differ between the frameworks include borrowing costs, development costs, investment property and the extent of financial instrument disclosures; review each policy against the framework actually chosen. How policy wording and notes are filled in is covered in accounting policies and notes.

A worked example in words: a Kenyan logistics company without public accountability has used full IFRS since a former parent required it. The parent has sold its stake. The partner reviews the choice, concludes IFRS for SMEs is permitted and better suits the company's users, agrees the change with the board and the bank, and records the decision on the engagement. The firm then rewrites the policies for IFRS for SMEs and plans the transition disclosures.

At the start of each season

List every client with its framework and the reason for it. Look again at any client whose ownership, borrowing or business has changed, and at every client affected by the new edition of IFRS for SMEs. The framework is a decision to revisit, not a default to inherit.

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