Nepal Accounting Standard for Micro Entities (NAS for MEs)


The Nepal Accounting Standard for Micro Entities (NAS for MEs) simplifies financial reporting for small businesses in Nepal, ensures compliance with the country’s accounting framework, and reduces the complexity and administrative burden. This standard aims to make financial reporting more accessible and practical for micro-entities, which often have limited resources and expertise for managing extensive accounting requirements.

Key Features of NAS for MEs:

  1. Simplicity:
  • Micro-entities typically define them based on criteria such as turnover, number of employees, and total assets, specifically for their design.
  • It eliminates complex requirements that are irrelevant to micro-entities.
  1. Financial Statements:
  • NAS for MEs requires preparing a simplified set of financial statements, typically including a balance sheet, an income statement, and notes to the financial statements.
  • These statements provide essential financial information without the extensive disclosures required by larger entities.
  1. Recognition and Measurement:
  • Simplified principles for recognizing and measuring assets, liabilities, income, and expenses.
  • Emphasis on straightforward valuation methods and practical approaches to common accounting issues micro-entities face.
  1. Compliance:
  • Aligns with the basic principles of the broader Nepal Accounting Standards, ensuring consistency within the national accounting framework.
  • Enables micro-entities to comply with legal and regulatory requirements in a manageable way.
  1. Scope and Applicability:
  • They are designed specifically for micro-entities, typically defined by criteria such as turnover, number of employees, and total assets.
  • Provides clarity on which entities qualify for the simplified reporting requirements.
  1. Cost-Effectiveness:
  • Reduces the costs associated with financial reporting by minimizing the need for professional accounting services.
  • Facilitates easier record-keeping and financial management for small business owners.

Benefits of NAS for MEs:

  • Reduced Complexity: Tailored for the capabilities and needs of micro-entities, making it easier for business owners to maintain accurate financial records.
  • Enhanced Compliance: Helps micro-entities meet statutory requirements without the burden of complex accounting standards.
  • Improved Financial Management: Provides clear financial information to assist decision-making and business planning.
  • Accessibility: Makes it feasible for small businesses to manage their accounting, fostering greater financial literacy among entrepreneurs.


  • NAS for MEs is implemented through guidelines provided by Nepal’s Accounting Standards Board (ASB).
  • Training and resources are made available to help micro-entities transition to this standard.
  • Ongoing support ensures businesses can maintain compliance and make the most of the simplified reporting framework.
Nepal Accounting Standards (NAS)
Nepal Accounting Standards (NAS)


The Nepal Accounting Standard for Micro Entities (NAS for MEs) represents a significant step towards making financial reporting more accessible and less burdensome for small businesses in Nepal. By simplifying the accounting requirements, NAS for MEs enables micro-entities to concentrate on their core business activities, thereby ensuring transparency and compliance with national standards.

For detailed information, refer to the full Nepal Accounting Standard for Micro Entities (NAS for MEs) 2018 document on the Accounting Standards Board, Nepal website

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Jayanti Shiwakoti

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