LONDON, Dec. 15, 2025 — In a significant move aimed at bolstering the global consistency and usability of financial reporting for small and medium-sized entities (SMEs), the IFRS Foundation has released its December 2025 IFRS for SMEs Accounting Standard Update. This comprehensive release outlines key changes, implementation aids, and outreach efforts designed to support a smoother transition to the third edition of the IFRS for SMEs® Accounting Standard.
This quarterly update provides a focused look at recent developments, with an emphasis on helping SMEs across jurisdictions better understand and apply the newly updated standards. The document also includes insights into technical revisions, stakeholder feedback, and a deep dive into the updated guidance on business combinations and goodwill accounting.
Revised Guidance on Business Combinations and Goodwill
A central highlight of the update is the restructured Section 19, which now brings the accounting for business combinations and goodwill more closely in line with full IFRS Standards. The newly adopted acquisition method replaces the previously used purchase method, establishing a more refined approach that enhances comparability and transparency across SME financial statements.
Key updates under Section 19 include the need to identify the acquirer, determine the acquisition date, and measure all acquired assets and liabilities at fair value. In cases where the consideration transferred exceeds the net assets acquired, the difference is now recognized as goodwill, further aligning SME practices with global norms.
The revisions also introduce new concepts such as step acquisitions, and mandate fair value measurement for contingent consideration when reliably measurable. The changes are intended to simplify complexity while ensuring that financial reports remain relevant and informative for stakeholders, such as lenders, investors, and regulators.
Expanded Implementation Support for Global Consistency
To ease the transition to the new Standard, the IFRS Foundation has released a suite of supporting materials, including a marked-up comparison with the previous version, updated educational modules, and practical examples. These resources are specifically tailored to bridge knowledge gaps and guide preparers through the nuances of the revisions.
Among the most helpful additions are the updated training modules covering core accounting areas such as financial instruments, fair value measurement, the statement of cash flows, and of course, business combinations. These modules are freely available and structured for both new learners and seasoned professionals seeking a refresher.
In addition, interactive webcasts and podcasts are being rolled out, offering insights directly from the IFRS team and subject matter experts. These digital tools are designed to meet SMEs where they are — with accessible content that addresses real-world scenarios and frequent implementation challenges.
Outreach Across Continents to Engage Stakeholders
The Foundation has continued its proactive outreach strategy, engaging with stakeholders across various regions including Latin America, Southeast Asia, and Europe. By hosting workshops, roundtables, and technical training sessions, the IFRS Foundation aims to ensure that jurisdictions adopting or aligning with the IFRS for SMEs Standard are fully equipped for the transition.
These global events have offered valuable feedback loops, allowing the IFRS staff to respond to regional concerns, clarify areas of ambiguity, and collect real-time insights into adoption challenges. This bidirectional communication is a cornerstone of the Foundation’s inclusive and consultative approach to standard-setting.
Enhanced Digital Access Through ePubs
In a nod to modern dissemination practices and sustainability efforts, the IFRS Foundation now offers ePub versions of its updated Standards. These digital documents are optimized for mobile devices and allow for seamless navigation, note-taking, and keyword searching — all features designed to improve user experience and broaden access, particularly in emerging economies.
The ePub format also supports offline viewing, making it ideal for practitioners in remote or low-connectivity regions. By embracing this format, the Foundation not only modernizes content delivery but also underscores its commitment to inclusivity and environmental responsibility.
Why This Matters to SMEs and Financial Professionals
The IFRS for SMEs Accounting Standard serves as a critical framework for millions of companies worldwide that are not publicly accountable but still require high-quality, comparable financial information. The December 2025 update reflects the need for a simplified yet robust standard that aligns with full IFRS where appropriate while remaining accessible and practical for SMEs.
These updates will likely have far-reaching impacts on how SMEs handle complex transactions, particularly those involving mergers, acquisitions, and goodwill. By offering clearer, more relevant guidance, the new Standard seeks to build greater trust in SME financial statements and support improved access to finance and investment.
Ultimately, the changes reinforce the IFRS Foundation’s mission to develop a single set of high-quality, understandable, enforceable, and globally accepted financial reporting standards. For SMEs — and those who rely on their financial disclosures — this update marks a positive and progressive step forward in the ongoing evolution of international accounting standards.