The aim of this paper is to examine the practical application of SME accounting within the institutional framework and regulatory context in (KKRF/KCFR), the IFRS for SMEs Accounting Standard, as well as in state tax reporting requirements. Based on a 2-year financial reporting case (2024-2025), the paper prepares the set of general purpose financial statements: statement of financial position, statement of comprehensive income, statement of changes in equity and cash flow statement. The focus of the analysis is on reconciliation of accounting-based measures of income with taxable income, emphasizing the distinction between traceability and numerical identity in accounting–tax conformity. With respect to the methodology, an important contribution lies in the handling of partial accounting data, more particularly missing opening cash balances. Through the classification of the balancing item as owner withdrawals, with statement that this treatment is made for purposes of faithful representation, comprehensibility and adherence to IFRS for SMEs principles without compromising reported profitability, the research shows how these objectives – faithful representation and internal consistency, in particular - do not have to be sacrificed. The results suggest that disclosure-oriented reporting and formal reconciliation processes considerably improve the reliability, comparability, and inspection desirability of SME financial statements. The paper provides pragmatic implications for transition economies, in which institutional barriers and lack of documentation often impede the quality of financial reporting.
Arjeta Rexhepi (Sat,) studied this question.