The Zambia Institute of Chartered Accountants
has launched a three tier financial reporting framework.
The framework splits entities into three types
- Tier one is listed companies, public interest
entities and government owned enterprise. They are required to use
full IFRS and must have a full audit assurance engagement
- Tier two is non-public companies or those
listed on the stock exchange with turnover of ZMK20bn ($4.2m) or
more. They can use IFRS for SMEs or full IFRS if the company
chooses to and must have a full audit assurance engagement
- Tier three is Micro and Small Entities (MSE)
with turnover of less than ZMK20bn. They are required to use the
Zambian Financial Reporting Standard for Micro and Small Entities.
Full audits are not required but can be opted for though an
accountants report is acceptable.
The framework is effective for annual periods
beginning on or after 1 January 2011 and should be applied to
financial statements ending on or after 31 December 2011.
The effective date for full compliance with
the IFRS for SMEs and the financial reporting standard for MSEs is
1 January 2012.
The period from 1 January 2011 to 31 December
2011 will be to facilitate transitional arrangements for preparing
financial statements, the institute said.