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IFRS for SMEs — Future reviews

Date recorded:

The Senior Technical Manager introduced the agenda paper and said that the IASB had originally planned that after the comprehensive review of the IFRS for SMEs it would propose amendments to the IFRS for SMEs by publishing an omnibus Exposure Draft approximately once every three years. The IASB had received feedback that this was too frequent. The staff recommended that instead a comprehensive review of the IFRS for SMEs should be performed on an approximately six year cycle, starting with a request for information (RFI) two years after the previous comprehensive review. In between those cycles, the staff recommended performing interim reviews, and where necessary develop amendments to the IFRS for SMEs with the objective of incorporating changes to full IFRSs which were not considered as part of the previous comprehensive review. This process would mean that changes to the IFRS for SMEs would not be more frequent than once every three years.

The Vice-Chairman said the agenda paper was confusing as regards to how often a review should be performed. He suggested clarifying this. One Board member asked why a RFI was necessary. He proposed issuing an Exposure Draft instead. The Senior Technical Manager replied that the RFI was in lieu of a post-implementation review. Another Board member agreed and said that there was not much contact with practitioners between the cycles. The former Board member agreed to an extent but said that, for example, IFRS 15 could be implemented into the IFRS for SMEs without a RFI. With the six year cycle it could be up to ten years until a new Standard was incorporated.

One Board member disagreed with the interim reviews. He said that the intention was to have a stable platform for constituents which could not be provided if there were interim reviews. Another Board member said that it would have to be decided whether constituents would get a clear statement on how long they could rely on a version of the IFRS for SMEs. She suggested having RFIs at least for the next few cycles and then reviewing whether they would still be needed. One Board member suggested putting the SMEIG in a stronger role with regards to advising the Board when an amendment to the IFRS for SMEs was due.

Another Board member also disagreed with the interim reviews but would like to have the possibility for urgent amendments. A fellow Board member pointed out that the interim review was only to consider amendments and that this did not mean that amendments needed to be processed. He also said that the SMEIG should be set up in a way that the need for amendments was channelled from the market to the IASB. If that would be ensured, the RFI could become unnecessary. Another Board member replied that the previous RFI had showed that there had been additional concerns by constituents that the SMEIG had been unaware of. The Chairman said that these points could be raised by constituents when amendments were exposed for public comment. The Board member replied that this might then require a second Exposure Draft.

The Chairman summarised that the wording of the staff proposal in the agenda paper should be amended to reassure constituents of the stability of the IFRS for SMEs. He asked which of the Board members would support the proposal with the amended wording. Twelve of the 14 Board members agreed.

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