The EU Regulation 1606/2002 enhanced the financial statement comparability by requiring the International Financial Reporting Standards (IFRS) mandatory application. In Italy, the implementation of EU regulation stated that listed firms are required to prepare their financial statements in accordance with IFRS, then extended to private entities on a voluntary basis. The study examines the extent to which the change from Italian Generally Accepted Accounting Principles (GAAP) to IFRS has affected Italian small and medium-sized entities (SMEs). The results suggest that profit and equity reported under IFRS is higher than that reported under Italian GAAP and that the most relevant and frequent impacts are caused by the adoption of IAS 38, IAS 16, IAS 19, IAS 17, IAS 39, and IAS 18. This study can inform companies and policy makers of the consequences of IFRS adoption in those countries which intend to expand the application of IFRS more widely to smaller companies. Moreover, comparing the similarity and differences between full IFRS and IFRS for SMEs, this study supports the opinion that SMEs regulation cannot provide significant simplification especially designed for the needs of SMEs.
