The evolution of GAPSE in Malta : a qualitative approach to establish the basis for conclusions and beyond

Abstract

In 1995 the new Companies Act was introduced in Malta. This effectively meant that all companies in Malta had an obligation to prepare IFRS based financial statements. However, several people felt that these standards fail to cater for the needs of local SMEs. After years of research to find a solution to this situation, an accounting framework that is more focused on the needs of local SMEs has been developed. This means that for financial reporting periods ending in 2009, SMEs may opt to apply GAPSE in the preparation of financial statements. The purpose of this study is to document the decision making process in reaching the conclusions of GAPSE and to include the views and perspectives of the individuals involved in this process. This was mainly achieved through the interviews held with members of the SMERTF in order to find out the reasons behind the decisions taken. The study reveals the main thoughts on issues raised before the ED was published. It also delves into the comments received during the exposure period and the reasons why they have been transposed into GAPSE or why they were not. As regards the future of GAPSE, it is important that it is regularly updated and reviewed and that adequate education and training is provided.