Most of the attention regarding International Financial Reporting Standards (IFRS) has focused on the possible implementation schedule for public companies. Sometimes overlooked is the potential use of IFRS within private companies.

However, work is proceeding on that front, as well. The International Accounting Standards Board, also known as the IASB, is the group charged with developing quality, understandable, and international financial reporting standards. The IASB has been working on a set of standards that it’s calling IFRS for Non-publicly Accountable Entities (here’s yet another acronym — NPAEs). About 120 small companies from 20 countries participated in a field test of the standards, restating their financial statements to comply with the draft IFRS for NPAEs. The IASB assessed the results last year, and plans to draft a final standard of IFRS for NPAEs later this year.

So, what do financial execs at private companies think about the proposed standards? Somewhat surprisingly, most are interested and seem to have a positive view of the potential change. That’s the conclusion of a recent Deloitte survey of 1,700 corporate financial types. In fact, 14 percent of respondents said they would consider adopting the IASB’s new standard in the near term, and another 26 percent said they would assess the costs and benefits.

“I was mildly surprised that there was that high of a percent of interest,” says Mike Becher, a Deloitte partner and manager of the midmarket audit practice. Although quite a few respondents indicated that they didn’t know as much as they needed to about the potential standards, a fair number thought IFRS for NPAEs would be simpler to prepare, yet still meet the needs of lenders and other stakeholders. “There’s an enthusiasm to adopt something that’s tailored to them,” Becher says.

To be sure, these feelings aren’t unanimous, as a quick tour of the blogosphere shows. “As far as I’m concerned, the IFRS is next thing to Client Requested Accounting Principles (CRAP),” wrote one poster. Another said, “IFRS is just another set of rules to learn that will increase the costs for small businesses.” One poster painted this doomsday scenario: “Global standards will lead to a global currency, which will lead to the end of the U.S. economy as we know it.”

Granted, any change in accounting standards is going to require a learning period. However, the benefits of IFRS –- namely, standards that are relatively simple (the exposure draft of IFRS for NPAEs runs about 250 pages; that compares with about 25,000 for GAAP) and would provide comparability between companies — makes giving it a chance worthwhile. In the long run, the costs and time required to comply with it could be far less than what companies currently are spending and provide higher-quality financial statements. ###