As part of the World Bank's Joint Economic Research Program (JERP) for Kazakhstan, the Centre for Financial Reporting Reform (CFRR) is managing a technical assistance project to investigate the potential for using the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) issued by the International Accounting Standards Board (IASB) to improve the financial reporting framework for small and medium-sized enterprises in Kazakhstan. The project was launched in July 2010 and is due to run for twelve months.
At present, public interest entities (PIEs) in Kazakhstan prepare their accounts on the basis of International Financial Reporting Standards (IFRS), while other entities are required to use Kazakh National Accounting Standards (KNAS), which were based on an early version of the IFRS for SMEs accounting standard. The A&A ROSC for Kazakhstan, which was published in May 2007 (download A&A ROSC), contains more detailed information on the Kazakh framework for financial reporting.
The Kazakh Ministry of Finance is considering adopting the final version of IFRS for SMEs as a supplement to (or replacement of) KNAS and wishes to have a thorough analysis of the implications of adopting the IFRS for SMEs standard. In addition, a relatively large number of business entities (around 4,700) in Kazakhstan are currently classed as PIEs and the Ministry would like to investigate whether there is scope for adjusting the classification of business entities to ensure that relatively small firms are not classed as PIEs.
The main tasks for the project are:
- Raising awareness about IFRS for SMEs among stakeholders and decision makers in Kazakhstan;
- Assessing the feasibility of applying IFRS for SMEs in Kazakhstan and of possible approaches to classifying business entities;
- Preparing an action plan, including changes in legislation and details of any training programs required, describing the steps needed to apply the IFRS for SMEs standard in Kazakhstan.