Adoption of IFRS for SMEs in Nicaraguan companies

Abstract

The opening of global business transactions brings with it the need to unify accounting standards, which facilitate the understanding of the language of financial information and enable the participation of companies at the international level. This work aims to analyze the adoption of International Financial Reporting Standards for SMEs (IFRS for SMEs) in Nicaraguan companies; detect the benefits that are perceived in the adoption and the position of the companies that have not yet adopted the standard. The study was carried out with 100 companies in the municipality of León. The results reflect that a minority of companies (8%) use IFRS for SMEs and the majority (61%) apply the Generally Accepted Accounting Principles (GAAP). According to the study, the benefits of adopting the IFRS for SMEs include: better competitiveness in the company, reliability and objectivity in financial information and transparency of accounting processes. The companies that do not apply the IFRS for SMEs stated that they do not do so because they do not perceive any benefit for the company, due to time and cost; however, the majority (60%) expressed an interest in applying them in the future, mainly to bring better order and control of the company´s operations.