SME Financial Reporting Framework and Standard

The SME Financial Reporting Framework (SME-FRF) and Financial Reporting Standard (SME-FRS) are standards of accounting practices issued by the Council of the Hong Kong Institute of Certified Public Accountants.

Official full text of the SME-FRF & SME-FRS in Volume II of the Members' Handbook
Bound Volume
Available for sale at HK$50 each at the Institute's counter.
Frequently Asked Questions on the application of the SME-FRF & SME-FRS

SME-FRF sets out the conceptual basis and qualifying criteria for the preparation of financial statements in accordance with the SME-FRS.

SME-FRS sets out the recognition, measurement, presentation and disclosure requirements for an entity that prepares and presents the financial statements in accordance with the SME-FRS.

Entities that qualify for reporting under the SME-FRF and preparing financial statements in accordance with the SME-FRS include:

	Hong Kong companies
		Companies applying section 141D of the Companies Ordinance
	Overseas companies
		No public accountability
		Meet size test (any two of the following: annual revenue <=HK$50 million, total assets <= HK$50 million, <= 50 employees)
		All owners agree to apply the SME-FRS

For an entity that qualifies for reporting under the SME-FRF, the appropriate application of the SME-FRS, with additional disclosure when necessary, would result in financial statements that achieve a proper presentation appropriate for SMEs.

For a company applying section 141D of the Companies Ordinance, compliance with the SME-FRF and SME-FRS is necessary in order for financial statements to give a true and correct view.

SME-FRF and SME-FRS should be read in the context of the Preface to Hong Kong Financial Reporting Standards. SME-FRS should also be read in the context of the SME-FRF.