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FRC issues draft response to the IASB's proposed changes to the IFRS for SMEs

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17 Dec 2013

The UK Financial Reporting Council (FRC) has issued for comment a draft response to the IASB's proposed changes to the IFRS for SMEs, issued in October 2013. The FRC has asked for comments on this proposed response by 24 January 2014.

In October 2013, the IASB issued an exposure draft proposing changes to the IFRS for SMEs. The FRC has drafted a response to the proposed changes. In its response, the FRC encourages the IASB to reconsider whether:

a) its interpretation of the scope of the IFRS for SMEs is appropriate for an international accounting standard that, if applied in economies with more advanced financial reporting and regulatory frameworks, such as the UK, would have within its scope some very large and complex entities; or

b) whether the stated scope of the IFRS for SMEs should be amended to reflect the IASB’s interpretation of that scope in developing a standard which is designed to be suitable for entities which typically have less complex transactions, limited resources to apply full IFRSs and operate in circumstances in which comparability with their listed peers is not an important consideration.

The FRC also does not agree that the list of principles developed by the IASB for dealing with new and revised IFRSs is appropriate, or that the principles are clear enough to indicate to constituents when amendments to the IFRS for SMEs could be expected as a result of changes to full IFRSs.

As well as responding to the IASB's detailed questions, the FRC also highlights some technical issues with the IFRS for SMEs that have come to their attention as part of the development of FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland.

The draft response can be found here on the FRC website and the invitation to comment here.

 

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