The IASB published in 2009 the “International Financial Reporting Standard for Small and Medium-Sized Entities” (IFRS for SMEs). Private entities, however, have no or little separation of ownership and control, and the extension of a “strong equity” accounting system to such entities could produce financial statements that are not consistent with the needs of the users of financial information. In this paper we argue that a common framework for financial reporting for public and private entities is in the best interest of the users of financial information. In fact, the coexistence of a two or even three-tiered structure of accounting regulation could lead to confusion for the users and to an increase in the costs of financial reporting for the preparers.
