Abstract
The progressive country like India, now days Small and Medium Scale Enterprises (SMSEs) are contributing a remarkable share to country’s economy. SMSEs now considered as backing up to different economic prospective such as unemployment, GDP, FDI, etc. The globalization era witness of significant growth in integration of economy and capital market of countries and every organization of these countries want to expansion internationally and to raise capital for expansion organizations are not limiting themselves only to domestic capital market and to lead in the market, there is obliged fairness in accounting angle to check, study and examine the genuine financial position of the organization itself and outsiders like investor, authorized body and so on. On this regards International Financial Reporting Standards (IFRS) playing significant part to make standardized financial statements which can acceptable both national and international. In view of objective of this study a comparative approach adopted. Date collected from annual reports of SMSEs which are enlisted in BSE for the period of 4 year. The financial ratios like current ratio, returns on asset and earnings per share ratio taken as measure of profitability, liquidity and market of company for this study. Keywords: IFRS, SMSEs, Financial position, financial reporting. DOI : 10.7176/RJFA/10-24-08 Publication date: December 31 st 2019
Highlights
We are living in global economy at the same time our business setups are operating internationally
International Financial Reporting Standards (IFRS) have been considered as language for global business which make possible for stakeholders to understand and compare global business affairs
In this study examine the comparison between financial ratios of SMSEs prepared under GAAP and IFRS
Summary
We are living in global economy at the same time our business setups are operating internationally. For this purpose this study current ratio to check liquidity, operating profit ratio to check profitability, and EPS to check performance growth of SMSEs. 2. Small and Medium Scale Enterprises (SMSEs) According to Section-7 of MSMED Act, 2006, “In India, the manufacturing enterprises grouped into SMSEs which enterprises are having investment in plant and machinery or equipments is ranging from Rs. 25Lakhs ($ 0.04 million) to Rs. 10 crores ($1.6 million) where as investment ranging from Rs. 10 Lakhs ($ 0.02 million) to Rs. 5 Crores ($ 0.8 million) will be grouped into Small medium scale service sector enterprise.” This Act classified enterprises of India on the basis of size of investment and nature of business activities of an enterprise. In order to fulfill this objective, SMSEs need to disclose more but genuine information to investors to aware them about company’s financial performance and financial position
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