By NKIRUKA NNOROM

Small and Medium Scale Enterprises (SMEs) listed on the Nigerian Stock Exchange (NSE) should be exempted from International Financial Reporting Standard (IFRS) says the Managing Director,  Poly Products Nigeria Plc, Mr. Nasir Gwalani.

Gwalani who spoke to Vanguard on some of the challenges businesses face in Nigeria, especially quoted companies, opined that all over the world, small businesses are not mandated to adopt the reporting system.

He noted that going by very nature of the reporting system, it would be difficult for small companies to abide by the requirements of IFRS.

He maintained that though the system could be acceptable to multinational and other blue chip companies, SMEs that post insignificant revenues should be allowed to continue with Generally Accepted Accounting Principles, GAAP.

“All over the world, small and medium industries are not subjected to all those things. Here we are bringing everybody under IFRS. It is very difficult for small companies to abide by what they are saying.

Banks, yes; multinationals, yes, but small and medium scale industries whose turnover is few million naira per year should be excluded from the IFRS. In England, you don’t even require audited balance sheet if your turnover is not in excess of five Pounds. What you need is only certified accountant report,” he stated.

Gwalani stated that adopting the new system will not resolve the laxity and regulatory lapses that the regulatory agencies in Nigeria are known for; adding that monitory and thoroughly reading the reports will yet constitute another problem.

Speaking on some of the challenges businesses face, Gwalani stated that insecurity and infrastructural decay have continued to pose grave danger to survival of business entities in Nigeria.

Vanguard recalls that all quoted companies have been directed to adopt the IFRS reporting standard effective December, 2012.

Already, a couple of companies have announced their readiness to tag along, while others said they have since migrated to the new reporting standard ahead of December deadline.

However, some financial experts have said that the new system of reporting requires a lot of disclosure which some companies might not be comfortable with.