The General Accounting Principles for Smaller Entities (GAPSE) were launched on Friday morning by Finance Minister Tonio Fenech in an attempt to reduce the regulatory burden for Small and Medium Sized Enterprises.

These principles are meant to reduce the audit and financial statement reporting requirements of smaller and medium-sized companies to a more realistic requirement. Minister Fenech explained that the accountancy profession in Malta was amongst the first to adopt International Financial Reporting Standards (IFRS). However the aim of IFRS has moved on since it was first adopted locally in 1995, becoming more market-oriented and targeted towards multinational companies listed on the world’s capital markets. Measurement, presentation, disclosure have thus become more complex.

Tonio Fenech explained that Government understood that such requirements go beyond financial reporting understandable needs and can impose a compliance cost, which in today’s realities, could outweigh the benefits or needs of the financial statement users. Consequently, these new standards reduce some of previously onerous burdens. The legal notice came into force from 1st January 2009 and may be applied in the preparation of financial statement covering financial periods ending on or after 1st January 2009.

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