This study, which was undertaken with the Ministry of Finance in China, examines several aspects of the financial reporting by small companies.
The report looks at how a small company is defined, who the users of small company financial reports are, and the differences in China and in the UK between big-GAAP and little-GAAP.
The report finds key differences between China and the UK and considers what lessons can be learnt. The IASB distinguishes between listed and unlisted companies, rather than big and small, when setting accounting standards. In China, the distinguishing criteria for "differential reporting" is more complex and there are much larger differences between the two types of Chinese GAAP than there are in the UK between listed and unlisted GAAPs.
Importantly, the great mass of companies (in any country) are not listed. Although unlisted companies in both countries are allowed to follow IFRS, they mostly choose to follow the national accounting systems designed for them.