The 2025 edition of IFRS for SMEs: timing

When the 2025 edition of IFRS for SMEs takes effect, the choice between adopting early and staying on the 2015 edition, and how to prepare clients.

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

For a practice whose client base is mostly private companies, the IFRS for SMEs Accounting Standard is the framework behind most of the statements it signs. A new edition of it is therefore not a technical footnote. It touches dozens of files at once, and the firm that plans the change client by client will have a much calmer transition year than the firm that discovers it during the first year-end.

This article covers the timing the IFRS Foundation has set, the choice each client has between adopting early and waiting, the questions to settle with each one, and the practical preparation in Achekam.

February 2025 update, effective 1 January 2027

The IFRS Foundation states that the IFRS for SMEs Accounting Standard was updated in February 2025, with the new edition effective for periods beginning on or after 1 January 2027.

The phrase "periods beginning on or after" drives the timetable for each client, so work it out per year end:

A client with a December year end first applies the new edition to the year that starts on 1 January 2027.
A client whose financial year starts in March first applies it to the year starting in March 2027.
A client whose year started in late 2026 stays on the previous edition for that whole year, even though its year end falls well into 2027.

Build a simple schedule of every client on IFRS for SMEs, its year end and its first year under the new edition. That schedule becomes the firm's plan.

The standard itself stays recognisably the same kind of document. The IFRS Foundation describes it as omitting topics in full IFRS that are not relevant to typical SMEs and simplifying many of the recognition and measurement principles of full IFRS. Those characteristics remain; what changes are particular requirements within it, which the firm's technical lead should read in the new edition rather than in summaries.

Early adoption or staying on the 2015 edition

The IFRS Foundation states that entities can choose to adopt the 2025 edition early, or continue to apply the previous edition, issued in 2015, until the new edition's effective date. Both are legitimate. The choice belongs to the client's directors, on the firm's advice.

Reasons a client might adopt early:

Its lender, parent or investors have asked for statements on the newer basis.
Its circumstances changed recently, and preparing statements once on the new edition avoids a second round of changes a year later.
The firm wants to run one or two well-organised clients through the transition first, to learn on manageable files.

Reasons to stay on the 2015 edition until required:

The client's statements are read mainly by its bank and tax authority, which gain little from an earlier change.
The client's records or finance function are not yet in a state to support a transition.
The year already contains enough disruption, such as an acquisition, restructuring or change of auditor.

Questions to settle with each client

Before each client's first year under the new edition, or before agreeing to adopt early, settle these questions and record the answers:

Which year is the first under the new edition, given the client's year end?
Will the client adopt early, and if so, from which year? Who decided, and where is it minuted?
Which of the client's balances and transactions are affected by changes in the new edition? This is a technical review, done once per client, against the new text.
What information does the client need to provide that it has not provided before?
Does the engagement letter or fee need to change for the transition year?

The framework choice itself, whether IFRS for SMEs is the right standard for the client at all, is a separate question that the transition is a good moment to revisit; see IFRS for SMEs or full IFRS. For what the standard leaves out or simplifies compared with full IFRS, see how IFRS for SMEs simplifies full IFRS.

Policy wording based on IFRS for SMEs, labelled for review

Achekam's Studio includes standard accounting policy wording based on IFRS for SMEs, labelled for review before issue, and staff can write their own policies. The label matters more than usual in a transition year. The verified description of that wording says it is based on IFRS for SMEs; it does not say which edition. Before issuing the first set on the new edition, compare each policy the client uses against the edition the client is applying, and rewrite any paragraph that no longer describes what the client does. Do the same for an early adopter.

Notes take their figures from the mapped trial balance, and facts the trial balance does not hold are left as "[to be completed]". Transition disclosures are usually of that kind: they describe a change, not a balance, so expect to write them.

Rolling forward and the manual standards watch

Staff can roll a set of statements forward to the next year, carrying settings, policies, notes and wording and rebuilding every figure from the new trial balance. In the transition year that convenience has a catch: last year's policies and notes arrive unchanged, written for the previous edition. Make reviewing every carried paragraph a named step in the transition-year plan. Adjusting entries, typed comparatives and signatures are not carried forward, so any comparative the transition affects has to be entered again.

Achekam does not pull a live feed of standards and regulatory changes; its Standards & Regulatory Updates page shows what its knowledge base records. The client schedule described above is therefore the firm's own early-warning system, and someone should own it.

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 edition issued in February 2025 applies to periods beginning on or after 1 January 2027. Share it with the team when the client schedule is first drawn up.

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