The discussion paper focuses on issues relating to the Board's approach to the project. It does not include proposals for specific financial reporting standards for SMEs. That will come later.

Printed copies of the discussion paper will be sent to subscribers or may be purchased for £10 from the IASB. An electronic version of the discussion paper may be downloaded from www.iasb.org without charge starting 5 July. Comment deadline is 24 September 2004.

Click for IASB Press Release (PDF 26k).

 

Issues raised in the IASB's Discussion Paper on Standards for SMEs

Should the IASB develop special financial reporting standards for SMEs? What should be the objectives of a set of financial reporting standards for SMEs? For which entities would IASB Standards for SMEs be intended? If IASB Standards for SMEs do not address a particular accounting recognition or measurement issue confronting an entity, how should that entity resolve the issue? May an entity using IASB Standards for SMEs elect to follow a treatment permitted in an IFRS that differs from the treatment in the related IASB Standard for SMEs? How should the Board approach the development of IASB Standards for SMEs? To what extent should the foundation of SME standards be the concepts and principles and related mandatory guidance in IFRSs? If IASB Standards for SMEs are built on the concepts and principles and related mandatory guidance in full IFRSs, what should be the basis for modifying those concepts and principles for SMEs? In what format should IASB Standards for SMEs be published?

We have combined the preliminary and unofficial notes taken by the Deloitte observers at the meeting on a Separate Page.

We have combined the preliminary and unofficial notes taken by the Deloitte observers at the meeting on a Separate Page.

The two boards are working to achieve that goal, both in their individual standards setting activities and in short-term and longer-term convergence projects. Deloitte has published a booklet highlighting Key Differences Between IFRSs and US GAAP as of June 2004, with a brief note on what, if anything, is being done about each difference. The differences (or non-inclusion of what, until recently, was a difference) reflect all IFRSs issued and revised through mid-June 2004, including those that do not become mandatory until 2005. The status notes reflect current IASB and FASB proposals. You can (PDF 258k). We are pleased to grant permission for accounting educators and students to make copies for educational purposes.

We have combined the preliminary and unofficial notes taken by the Deloitte observers at the meeting on a Separate Page.

The latest session, addressing business combinations and issues relating to group accounts, was run on Thursday 17 June 2004. It covered IFRS 3 Business Combinations, IAS 27 Consolidated and Separate Financial Statements, IAS 28 Investments in Associates and IAS 31 Interests in Joint Ventures. The link to the recording can be found on our UK Page. The recording is no longer available online.

The Board noted that it is providing these drafts for information and to assist organisations and individuals in preparing to comment on the Exposure Drafts when published. The IASB is not inviting comments on these preliminary drafts.

• Exposure Draft ED 7 Financial Instruments: Disclosures
• Exposure Draft Amendments to IAS 39 Financial Instruments: Recognition and Measurement - Cash Flow Hedge Accounting of Forecast Intragroup Transactions
• Exposure Draft Amendments to IAS 39 Financial Instruments: Recognition and Measurement and IFRS 4 Insurance Contracts - Financial Guarantee Contracts and Credit Insurance
• Exposure Draft Amendments to IAS 39 Financial Instruments: Recognition and Measurement - Transition and Initial Recognition of Financial Assets and Financial Liabilities

An explanation of the differences between results under IFRS and under Japanese GAAP would be required. Currently, around 30 foreign companies are listed on the Tokyo Stock Exchange, but only about 10 of those are from countries that require IFRSs. Most of the others are US and Canadian companies that do not prepare IFRS financial statements. Several news stories have also reported that the European Union may extend to 2007 the deadline for Japanese companies listed in Europe to switch to IFRSs. Around 250 Japanese companies list their shares or bonds on EU exchanges. Most prepare their financial statements under Japanese accounting rules. The Japanese government has already asked governments in Europe to allow these companies to continue to use Japanese GAAP indefinitely.

FASB's exposure draft is basically the same as IFRS 2. The US Congress is considering legislation that would restrict a FASB standard on expensing stock options to options granted to the top five officers of a company (see our news story of 16 June 2004). The FASB hearings will be webcast – see the FASB Website for details.

This review is being conducted alongside the IASC Foundation Trustees' Constitution Review now under way.