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CA Sri Lanka and GIZ commences dissemination of SLFRS for Small Entities

The Institute of Chartered Accountants of Sri Lanka in collaboration with GIZ SME Development Programme commenced a series of workshops to disseminate the recently adopted Sri Lanka Accounting Standard (SLFRS) for Smaller Entities. Latest of the series of seven workshops was held in Kandy where over 200 participants representing, Government Institutions, SMEs, Small and Medium sized Practitioners (SMPs), Chambers, and Banks received awareness on usage and application of simplified SLFRS for Smaller Entities. This initiative will immensely improve financial reporting and book keeping of SMEs and their accessibility to financial services offered by the financial sector.

Two-day workshop provided an in-depth understanding on the theoretical aspects of SLFRS for Smaller Entities and the application of the concepts and principles of the said SLFRS to their business in the preparation of financial statements and their presentation and reporting.

Participants were also given a practice-kit that contained information on practical application of SLFRS   for smaller entities with case studies and discussion rounds. Mr. Upendra Wijesingha, Head of Technical of CA Sri Lanka guided the audience towards the application of such SLFRS into their businesses with comprehensive set of illustrations. In addition, overall awareness of the newly approved SME Policy framework was introduced with special focus on Access to Finance pillar.  Follow up to this workshop will be carried out after 2 months to facilitate application of the new standard into their accounting and bookkeeping.

SLFRS for Smaller Entities provides a simple, cost effective financial reporting standard that can be used by smaller entities in the preparation and presentation of the financial statements. SMEs and even more small entities and micro enterprises are encouraged to apply “SLFRS for Smaller Entities” since it is considerably less complex than both the full SLFRS and can be applied without reference to SLFRSs and/or SLFRS for SMEs. SLFRS for Smaller Entities came into effect for financial periods beginning from 01 January 2016.

Representing CA Sri Lanka, former council member and senior Chartered Accountant, Mr. T Darmarajah, delivered the technical session and mentioned that the issuing of a new accounting standard for Smaller Entities is a milestone in the history of promulgating accounting standards in this country. He further iterated that this indigenous accounting standard uses international norms and accounting principles which are more relevant to the smaller enterprise segment of the commercial world.

Mr. Hasitha Wijesundara, Advisor to the GIZ SME Development said this initiative will immensely help to reduce the Information asymmetry problem in financial sector with reference to appraise the variability of SME credit.  Addressing the forum, Mr. Wijesundara further said “ the ability of producing the financial statements with ease, will help SMEs to produce there financial and business plans to the Banks for loans will solve much prolonged access to finance constrain in the sector.”

Following the first workshop held in Matara, and the above captioned workshop in Kandy, the next five workshops of this kind will be held in Badulla, Batticaloa, Jaffna, Kurunegala and Colombo in the coming months.