Which topic is excluded from IFRS for SMEs?

The correct answer is earnings per share, which is excluded from the IFRS for SMEs (International Financial Reporting Standards for Small and Medium-sized Entities). This exclusion is significant as the IFRS for SMEs is designed to be simpler and more accessible for smaller entities that may not have the resources or need for complex financial reporting requirements imposed on larger public companies.

Earnings per share (EPS) is primarily relevant for publicly traded companies where shares are issued to investors. Smaller entities often do not have publicly traded equity, making the reporting of EPS unnecessary and irrelevant for their financial statements. As a result, the IFRS for SMEs focuses on essential aspects of financial reporting that provide a true and fair view while avoiding complexities that do not benefit smaller businesses.

The other topics, such as cash flow statements, consolidated financial statements, and intangible assets, are part of the IFRS for SMEs framework. Small and medium-sized entities are still required to present cash flow statements to show how cash is generated and used, which is crucial for understanding the entity's liquidity. Consolidated financial statements are necessary when a small entity has subsidiaries, as it reflects the economic reality of control over those entities. Intangible assets, including goodwill, may also represent an important resource for SMEs, thus are accounted