Workshop Overview

The CFRR convened 48 participants for a workshop: “Adapting Accounting Frameworks for SMEs and the International Financial Reporting Standards (IFRS) for SMEs Accounting Standard Update - Training of Trainers” on December 3-4, 2025.

The workshop was delivered with the direct participation of staff of key technical partners, the European Commission Directorate-General for Financial Stability (DG FISMA), EFRAG, and a board member and several staff of the International Accounting Standards Board (IASB). They contributed to the policy discussions with professional accounting organization (PAO) executives and the trainers they nominated from 11 countries: Albania, Armenia, Azerbaijan, Bosnia and Herzegovina, Georgia, Kosovo, Moldova, Montenegro, North Macedonia, Serbia, and Ukraine.  Key topics included current and future financial reporting standards and adapting accounting frameworks for SMEs. The IASB also provided intensive training for the trainers nominated by the PAOs to give them the skills and materials to deliver country-level training on the third edition of the IFRS for SMEs Accounting Standard.

The workshop was organized under two flagship regional programs managed by the CFRR in Vienna: Road to Europe Program for Accounting Reform and Institutional Strengthening (REPARIS for SMEs) and  Enhancing Accounting, Auditing, and Sustainability Reporting (EAASURE) Program. REPARIS for SMEs is financed by the EU and EAASURE by the Austrian Federal Ministry of Finance, the Austrian Development Agency, and the Swiss Secretariat for Economic Affairs.

The workshop contributed to strengthening the capacity of PAOs Executives and trainers with current reporting standards and future development of reporting, as part of reforms and capacity building efforts that help create conditions for SMEs to grow.

Key Policy Messages and Takeaways from the Workshop

1. Transparency is key for SME access to finance

During the opening remarks, participants were reminded by the CFRR that quality financial reporting matters:  "Access to finance is a key challenge for European enterprises, especially SMEs and innovative companies. Investors seeking cross-border opportunities in Europe, rely on comparable financial information."    The need for easily accessible, reliable, understandable, and comparable public information was a central theme throughout the discussions.

2. SMEs face reporting challenges 

The over-application of IFRS Accounting Standards for all enterprises, and especially for micro- and small enterprises that are below EU thresholds, contributes to low quality financial statements observed in several Reports on Observance of Standards and Codes Accounting and Auditing in Eastern Europe performed by CFRR. Competing incentives also impede the quality of financial reporting for SMEs: the different objectives of various reporting requirements—reporting to investors, to tax authorities, to access bank lending, etc.—create financial statements for SMEs that lack quality and may not be compliant with the Accounting Directive or the IFRS for SMEs.

3. Simplifications are needed for micro-enterprises and in some countries for small enterprises too. 

Countries in Eastern Europe have not all adopted the EU thresholds and, in a few instances, have significantly lower ones to define small and micro enterprises. Those   enterprises are overburdened by general purpose financial regimes in several countries, while being too small for banks to consider their financial statements for accessing finance. Countries should utilize the simplification options available under the EU Accounting Directive to create an appropriate micro-regime for the smaller enterprises. This distinction proved critical for participants.

4. EU Initiatives: SME voluntary reporting of performance indicators project and harmonization of accounting practices

The European Commission and EFRAG presented an initiative for SMEs to voluntarily report harmonized performance indicators that will be published on the European Single Access Point (ESAP) as a centralized platform to help SMEs access financial markets and investors.

Differences in accounting practices co-exist inside the EU because the EU Accounting Directive requires minimum harmonization. EU Member States rely on their national standards except for public interest entities (PIEs),  that is listed companies, banks, insurance undertakings. This leads to financial statements that are not always comparable. However, these differences may diminish with time as all EU Member States are required to use IFRS Accounting Standards for PIEs and Member States are increasingly modernizing their national standards using international accounting standards as a benchmark. 
 

5. There is significant adoption of IFRS for SMEs in the Western Balkans

The CFRR and IASB recognized that several jurisdictions in the Western Balkans used full IFRS Accounting Standards for all entities before the IFRS for SMEs Accounting Standard became available; IFRS for SMEs was a first step for simplification. The IFRS for SMEs is now either adopted or adapted in national standards across Western Balkans countries, including Bosnia and Herzegovina, Georgia, Kosovo, North Macedonia, and Serbia, demonstrating significant regional momentum toward harmonized reporting standards. CFRR and IASB reminded participants that micro-enterprises should not report using the standard, but should be subject to simplified reporting requirements as proposed in the EU Directive.

6. Compatibility of IFRS for SMEs and the EU Accounting Directive is possible. 

EFRAG and IASB confirmed that IFRS for SMEs and the EU Accounting Directive are largely compatible when appropriate options are selected. They addressed concerns about potential conflicts between standards. EFRAG's analysis demonstrated that the IFRS for SMEs and the EU Accounting Directive are largely compatible when appropriate options are selected. It was explained that after amendments to both frameworks over the years, only rare circumstances would result in differences between the two. EU Member States can permit IFRS for SMEs while still meeting EU Directive requirements through careful selection of available options. This could provide a path for countries seeking both harmonization and EU alignment.

7. Empowering Trainers for Sustainable Impact

The workshop's train-the-trainers approach was designed to create lasting impact in improved accounting practices and enhanced access to finance for SMEs.   The trainers return to their countries ready to deliver national training to accountants and SME practitioners and equipped with:

• Good understanding of the third edition of the IFRS for SMEs Accounting Standard.
• Good understanding of the relationship between IFRS for SMEs and EU requirements.
• An updated view on company size and which company should prepare a general-purpose financial statement and why it is important to update company size thresholds.
• Clear guidance on implementing simplification measures for micro-enterprises.
• Training materials that will be translated into local languages.

The way forward

The workshop is one of the CFRR’s critical investments to build regional capacity for quality financial reporting through its donor-supported programs, REPARIS for SMEs and EAASURE. The updated IFRS for SMEs Accounting Standard provides a timely opportunity for reform.   The workshop is an opportunity to restart a path to further accounting reform. CFRR encouraged participants to advocate further for the “think small first” approach of the EU Commission. Revised definitions of SMEs and appropriate reporting options for micro enterprises will result in further regional transformation of SME financial reporting regimes that enhance the quality of financial reporting and build trust, conducive to greater access to finance. Countries should allow micro enterprises to report under the simplified reporting option offered by the EU Accounting Directive, which still provides third parties with essential financial information. The CFRR will continue to work with stakeholders to implement these changes.

Companies in the Western Balkans and the South Caucasus are looking for information and tools to implement better financial and sustainability reporting to maintain or integrate EU companies value chains.  The CFRR will be working with other parts of the World Bank, including the IFC, and the EU towards assisting SMEs, or mid-size growth firms, that are expanding and therefore need to start building the systems necessary to enable sustainable growth and manage increasing risks.

Participating PAOs have committed to organizing at least two country-level rolled-out   training sessions before end-October 2026. PAOs will report back to the CFRR on the results of the training, including the number of accountants trained, SMEs reached, and quality improvements achieved. This emphasis on feedback and reporting mechanisms demonstrates the program’s commitment to measuring real impact.

Feedback on the Workshop

Participants praised the quality of the speakers and the organization of the workshop which was rated overall 4.8 out of 5. Examples of the feedback included, “thank you for the workshop, everything was very well organized … very knowledgeable speakers.  the training is very valuable to me as a trainer … the workshop was very insightful. We need more of the REPARIS for SMEs program.”