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5/14/2009 - GAPSE – General Accounting Principles for Smaller Entities
Malta has amended its Companies Act to allow for the adoption of an alternative accounting framework to IFRS’s. GAPSE is a stand alone set of accounting principles that presents major simplifications in measurement and disclosures included in the financial statements of pertinent entities.
The need to develop an alternative framework for small and less complex entities was felt as IFRS’s are now addressing complexities that go far beyond the accounting realities of such entities. GAPSE allows the adoption of historical cost for assets and liabilities (although it also allows alternative measurement bases in certain circumstances) and provides for significantly reduced disclosure requirements.
There are a number of qualitative and quantitative criteria to be met to enable entities to make use of GAPSE.
GAPSE may be applied by all entities except those that have their securities listed or are guarantors of listed companies, are public companies or possess a licence issued by MFSA (e.g. banks, Insurance Companies, Funds and others).
GAPSE shall not be applied by entities that exceed any one of the following criteria: a balance sheet total of €17.5 million; total annual turnover of €35 million and average number of employees of 250. There are specific criteria for state owned entities. The latter are not allowed to apply GAPSE if they exceed any two of the following criteria: a balance sheet total of € 4.4 million; total annual revenue of €8.8 million and average number of employees of 50.
GAPSE may be applied for financial statements ending on or after 1 January 2009.
For further details on this subject matter please contact Joe Ellul Falzon on
joseph.ellul.falzon@rsmmalta.com.mt