Section 6 of the IFRS for SMEs gives you two options—and choosing the right one can save time, cut costs, and keep your clients out of SARS trouble. In this article, we break down when to use the full Statement of Changes in Equity and when you can simplify with a Statement of Income and Retained Earnings. It’s not just about compliance—it’s about working smarter, billing better, and proving your value.

The Companies Act of South Africa outlines specific requirements for financial reporting, determining when a company must be audited, undergo an independent review, or simply compile financial statements. These requirements are primarily based on a company’s Public Interest Score, its classification, and whether its financials are prepared internally or independently. Public companies, state-owned entities, and large private companies typically require audits, while mid-sized companies may only need an independent review. Small, owner-managed businesses often qualify for a basic financial compilation. Understanding these thresholds helps companies comply with regulatory requirements while ensuring appropriate levels of financial oversight.

Investment property under IFRS for SMEs refers to land or buildings held for rental income or capital appreciation. The standard outlines how to recognise, measure, and disclose investment property in financial statements. Properties can be measured at fair value if reliably measurable or at cost if not. Mixed-use properties require classification based on usage. Leased properties can be treated as investment property under specific conditions. Proper accounting ensures transparency and accurate financial reporting for SMEs.