International Financial Reporting Standards for Latin American Small and Medium Enterprises
The purpose of this chapter is to describe the process followed by Latin America to adopt International Financial Reporting Standards for Small and Medium Enterprises (IFRS for SMEs), based on examples about the approaches used by seven South American countries – Argentina, Brazil, Chile, Colombia, Peru, Uruguay, and Venezuela. These countries have followed different models of harmonization to IFRS for SMEs. Harmonization models may be grouped into five categories: maintenance of local financial reporting standards, adaptation of International Financial Reporting Standards (IFRS) to local standards, full or partial adoption of IFRS, adoption of another country's standards, and convergence to diminish differences between local standards and IFRS. Regardless of the chosen mode of harmonization, SMEs face particular challenges as major players in the Latin America and Caribbean region with needs to greater access to finance sources and simplification of laws and reporting standards to be able to achieve global competitiveness.