Please note that GAPSE was superceded by GAPSME for financial statements whose financial period commenced on or after 1 January 2016.  By reading this document, readers acknowledge that they understand the limitation of applicability of the GAPSE accounting framework.


This pocket guide provides a summary of the recognition and measurement requirements in the Accountancy Profession (General Accounting Principles for Smaller Entities) Regulations, 2009 (“GAPSE”), that was enacted through Legal Notice 51 of 2009, and subsequently amended through Legal Notice 58 of 2010.

GAPSE has clear benefits for shareholders, lenders and other stakeholders through the application of a framework that provides an alternative standard for smaller entities that are not of the size, nor have the resources, to warrant adoption of IFRSs as adopted by the EU.

Another aim of GAPSE is to provide financial information that is more relevant to smaller entities, and that will be recognised and understood by the different stakeholders.

The volume of accounting guidance has been reduced significantly when compared to IFRSs as adopted by the EU, which had been the only alternative available to entities registered in Malta until the publication of GAPSE. In fact, GAPSE does not contain an equivalent to much of the implementation guidance contained within IFRSs as adopted by the EU; it also omits detailed explanations and requirements relating to the more complex circumstances not usually applicable to smaller entities. GAPSE does not just reduce disclosure requirements; it also simplifies the recognition and measurement requirements – for example, in connection with financial instruments. Specifically, in areas where IFRSs as adopted by the EU allow a policy choice, GAPSE generally adopts, or allows as one of its accounting policy choices, the simpler option. In fact, with the exception of derivate financial instruments, entities generally have the requirement, or the option, to measure other assets and liabilities using the cost model. GAPSE is written in such a manner that it is complete in itself and contains all the mandatory requirements for smaller entities’ financial statements.

Where a transaction is not addressed by GAPSE, management is expected to use judgement to determine its accounting policy. If such a transaction is covered in IFRSs as adopted by the EU, management should refer to the appropriate international standard.

This pocket book looks at the key areas covered by GAPSE and explains the basic requirements. It includes all amendments to GAPSE that were published up to May 2012, and is written primarily for those who have a reasonable understanding of basic accounting concepts and terminology.

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