IASB Issues Proposed Amendments to Guidance for SMEs

The International Accounting Standards Board (IASB) has published for public comment an exposure draft of proposed amendments to the International Financial Reporting Standards for Small to Medium-sized Enterprises (IFRS for SMEs), which it developed based on its initial comprehensive review of the IFRS for SMEs.

When it issued the IFRS for SMEs in July 2009, the IASB stated its plans to undertake an initial comprehensive review of the guidance to enable it to assess the first two years’ experience that entities would have had in implementing it and to consider whether there is a need for any amendments. In many jurisdictions, companies started using the IFRS for SMEs in 2010 so the IASB commenced its initial comprehensive review in 2012.

To assist in the process of identifying which items to consider for amendment the IASB issued a request for information(RFI) in June 2012 to seek public views and consulted with the SME implementation group, an advisory body to the IASB. After considering the feedback received, and because the IFRS for SMEs is still a new standard, the IASB only proposes to make limited amendments to it

Most of the proposed amendments clarify existing requirements or add supporting guidance, rather than propose changes to the underlying requirements in the IFRS for SMEs.  Consequently, for most SMEs, the proposals are expected to improve understanding of the existing requirements, without having a significant effect on the entity’s financial reporting practices and financial statements.

The proposals are open for comment until 3 March 2014.

“The IFRS for SMEs has already been a remarkable success, having been adopted by more than 80 countries and used by millions of companies worldwide,” said Hans Hoogervorst, chairman of the IASB.

“The initial comprehensive review is an important step in our due process as it provides a mechanism to make sure the IFRS for SMEs is working as intended. Responses to the RFI identified few significant new issues. However they highlighted some areas where targeted improvements to the standard could be made.”


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