Selecting a financial reporting framework determines how an entity recognises and measures transactions, presents its financial statements and makes disclosures. In Cambodia, the assessment depends on public accountability, independent-audit obligations and the type of financial statements being prepared.
Taxpayer classification alone does not determine the answer. A medium taxpayer is not automatically required to use CIFRS for SMEs, and a business described as “small” is not automatically eligible for the Cambodian Reduced Financial Reporting Framework (CRFRF).
1. Assess public accountability and audit status separately
An entity generally has public accountability if:
- Its debt or equity instruments are traded in a public market, or it is issuing instruments for public trading; or
- Holding assets in a fiduciary capacity for a broad group of outsiders is one of its primary businesses. Banks and insurers are typical examples.
Publicly accountable enterprises apply full Cambodian International Financial Reporting Standards (CIFRS), subject to sector-specific directions. A small revenue base does not make them eligible for CIFRS for SMEs.
For enterprises without public accountability, a statutory audit does not make CIFRS for SMEs the only permitted framework. ACAR’s guidance expressly permits CIFRS or CIFRS for SMEs. ACAR guidance, slide 10.
Audit obligations should be assessed under the applicable requirements, including Prakas 063 of 18 August 2026. Its revised audit criteria apply from the 2026 accounting period. Entity-specific requirements and continuing audit obligations must be considered, rather than relying only on current-year size. ACAR Prakas index.
2. Identify the appropriate framework
The table addresses enterprise financial statements. Not-for-profit entities and regulated sectors require the additional assessment below.
| Reporting circumstances | Framework assessment | Key point |
|---|---|---|
| Publicly accountable enterprise | Full CIFRS | Check sector-specific implementation requirements. |
| Enterprise without public accountability, subject to statutory audit | CIFRS for SMEs or full CIFRS | Mandatory audit does not remove the full-CIFRS option. |
| Enterprise without public accountability or a mandatory independent-audit obligation, preparing unaudited statements | Assess CRFRF eligibility and the applicable ACAR direction | Eligibility does not, by itself, settle whether application is compulsory for a particular reporting year. |
| Consolidated financial statements | Assess full CIFRS or CIFRS for SMEs | CRFRF expressly excludes consolidated statements. |
Full CIFRS may also be selected by eligible private enterprises to align with group reporting, investor requirements or capital-market plans. The decision should consider implementation costs and the information users need.
CIFRS for SMEs is a standalone standard for eligible entities without public accountability that prepare general-purpose financial statements for external users. It simplifies accounting and disclosure requirements compared with full CIFRS, but compliance requires applying the relevant requirements as a whole.
CRFRF provides further relief for qualifying unaudited statements. Its annex requires both the absence of public accountability and the absence of a mandatory independent-audit obligation. Its stated scope is unaudited statements, so eligibility should be reassessed where an audit is planned or required. Official CRFRF annex, paragraphs 3–4.
3. Understand what CRFRF changes
CRFRF is more than a reduced-disclosure framework. Its relief affects recognition and measurement as well as presentation. For example, it:
- Exempts qualifying entities from recognising deferred tax assets and liabilities.
- Exempts them from preparing cash-flow and changes-in-equity statements.
- Requires a statement of financial position, a statement of comprehensive income and retained earnings, and notes.
- Does not require comparative information in the first year of application.
Statements applying these departures must identify CRFRF as their preparation basis. They cannot also claim compliance with CIFRS for SMEs unless all requirements of that standard are satisfied. CRFRF annex, paragraphs 6–11.
4. Confirm the reporting-year implementation requirement
For 2025 annual financial statements, ACAR’s Notification 040/25 directs qualifying SMEs that are neither subject to independent audit nor publicly accountable to use CRFRF, the digital reporting platform and the enterprise chart of accounts. The notification uses mandatory wording. Notification 040/25.
For 2026 financial statements, entities should confirm the applicable ACAR direction before finalising their reporting framework. Eligibility under the CRFRF annex and the implementation requirements for a particular reporting year should be assessed separately.
5. Apply the assessment in practice
Example 1: An audited Cambodian subsidiary
A privately owned Cambodian manufacturer has no public accountability but must undergo a statutory audit. Its foreign parent reports under full IFRS.
The subsidiary may use CIFRS for SMEs or full CIFRS. The parent’s framework alone does not remove the subsidiary’s eligibility for CIFRS for SMEs. Management should compare the cost of adopting full CIFRS locally with maintaining adjustments between local statements and group reporting.
Example 2: An unaudited private enterprise
A Cambodian service company has no public accountability. After assessing the applicable audit rules, it concludes that it is not required to have an independent audit. It prepares financial statements that are neither audited nor consolidated.
The company meets the scope conditions in the CRFRF annex: it has no public accountability, is not required to undergo an independent audit, and prepares unaudited, non-consolidated statements. It should therefore assess CRFRF for those statements.
The next step is to determine whether ACAR requires the company to use CRFRF for the relevant reporting year. ACAR’s direction for 2025 used mandatory wording for qualifying SMEs. For 2026 financial statements, entities should confirm the applicable ACAR direction before finalising their reporting framework.
6. Consider special cases and effective dates
Not-for-profit entities require a separate assessment. ACAR’s Instruction 010 of 15 March 2022 addresses the Cambodian NFPE standard and requires written notification to ACAR where CIFRS or CIFRS for SMEs is applied. An NGO should not automatically be placed in the enterprise table because it falls below an audit threshold. Instruction 010.
Banks, insurers and other regulated entities must check sector-specific directions. Public bodies require a separate public-sector assessment.
The IASB’s Third Edition of IFRS for SMEs is effective for annual periods beginning on or after 1 January 2027, with early application permitted. Publication of the edition does not make it compulsory for 2026. Confirm the applicable Cambodian implementation requirements and transition provisions before changing accounting policies. IFRS for SMEs Third Edition.
This article provides general technical guidance. Entity-specific conclusions depend on the applicable Cambodian instruments, reporting period and regulatory directions.
