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IASB publishes "Request for Information: Comprehensive Review of the IFRS for SMEs"

  • IASB (International Accounting Standards Board) Image

Jun 26, 2012

The IASB, in cooperation with the SME Implementation Group (SMEIG), has developed and issued a request for information seeking comments on specific sections of the "IFRS for SMEs" as well as soliciting general feedback from respondents on their experiences with it. Respondents are encouraged to discuss potential amendments they would like to see made to the "IFRS for SMEs" and raise any other issues they would like to put forward. The document does not contain any preliminary views of the IASB or the SMEIG. Responses are due by November 30, 2012.

IFRS for SMEs was first issued in July 2009. At that time, the IASB announced that after two years, it would assess entities' experiences with implementing IFRS for SMEs. The IASB also said that after an initial review, it would consider amendments to the IFRS for SMEs approximately once every three years.

The request for information is divided into two parts:

  • Part A contains specific questions on particular sections of the IFRS for SMEs for respondents. These issues have been frequently raised by interested parties. Respondents are also invited to raise any other specific issues they may have relating to possible changes to particular sections of the IFRS for SMEs.
  • Part B contains general questions about the IFRS for SMEs. Respondents are invited to raise any other general issues they may have relating to possible changes to the IFRS for SMEs.

A summary of the questions asked in each part is set out in the table below.

During the first half of 2013, the SMEIG is expected review comments on the request for information and make recommendations to the IASB on possible amendments. The IASB will convene to develop and approve an exposure draft of proposals. The IASB does not expect to publish final revisions to the IFRS for SMEs until the second half of 2013 or first half of 2014, with an estimated effective date of 2015.

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Summary of Questions Asked in the Request for Information

Part A — Specific issues.

S1. Use by publicly traded entities — Are the scope requirements of the IFRS for SMEs currently too restrictive for publicly traded entities?

S2. Use by financial institutions — Are the scope requirements of the IFRS for SMEs currently too restrictive for financial institutions and similar entities?

S3. Clarification of use by not-for-profit (NFP) entities — Should the IFRS for SMEs be revised to clarify whether an NFP entity is eligible to use it?

S4. Consideration of recent changes to the consolidation guidance in full IFRSs — Should the changes introduced by IFRS 10, Consolidated Financial Statements (including agency relationships, "de facto control" and potential voting rights), be considered for incorporation into the IFRS for SMEs but modified as appropriate to reflect the needs of users of SME financial statements and cost-benefit considerations?

S5. Use of recognition and measurement provisions in full IFRSs for financial instruments — How should the current option to use IAS 39, Financial Instruments: Recognition and Measurement, in the IFRS for SMEs be updated once IFRS 9, Financial Instruments, has become effective?

S6. Guidance on fair value measurement for financial and nonfinancial items — Should the fair value guidance be expanded to reflect the principles in IFRS 13, Fair Value Measurement, modified as appropriate to reflect the needs of users of SME financial statements and the specific circumstances of SMEs (for example, it would take into account their often more limited access to markets, valuation expertise, and other cost-benefit considerations)?

S7. Positioning of fair value guidance in the standard — Should the guidance be moved into a separate section?

S8. Consideration of recent changes to accounting for joint ventures in full IFRSs — Should the changes to joint venture accounting introduced by IFRS 11, Joint Arrangements, be reflected in the IFRS for SMEs, modified as appropriate to reflect the needs of users of SME financial statements and cost-benefit considerations?

S9. Revaluation of property, plant, and equipment (PPE) — Should an option to use the revaluation model for PPE be added to the IFRS for SMEs?

S10. Capitalization of development costs — Should the IFRS for SMEs be changed to require capitalization of development costs meeting criteria for capitalization (on the basis of the criteria in IAS 38, Intangible Assets)?

S11. Amortization period for goodwill and other intangible assets — Should the amortization requirements be modified to state when the entity is unable to make a reliable estimate of the useful life of an intangible asset, the life shall be presumed to be 10 years unless a shorter period can be justified?

S12. Consideration of changes to accounting for business combinations in full IFRSs — Should the business combination accounting requirements be amended to incorporate changes introduced by IFRS 3, Business Combinations (2008) (including expensing of acquisition costs, measurement of contingent consideration at fair value, and determination of goodwill that is based on a remeasurement of previously held interests and noncontrolling interests), modified as appropriate to reflect the needs of users of SME financial statements and cost-benefit considerations?

S13. Presentation of share subscriptions receivable — Should the requirements be amended either to permit or require the presentation of the receivable as an asset?

S14. Capitalization of borrowing costs on qualifying assets — Should the IFRS for SMEs be changed so that SMEs are required to capitalize borrowing costs that are directly attributable to the acquisition, construction, or production of a qualifying asset, with all other borrowing costs recognized as an expense when incurred?

S15. Presentation of actuarial gains or losses — Should the option to recognize actuarial gains and losses in profit or loss be removed, to be consistent with IAS 19, Employee Benefits (revised 2011)?

S16. Approach for accounting for deferred income taxes — Should SMEs recognize deferred income taxes and, if so, how should they be recognized?

S17. Consideration of IAS 12 exemptions from recognizing deferred taxes and other differences under IAS 12 — Should the IFRS for SMEs be revised to conform it to IAS 12, Income Taxes, modified as appropriate to reflect the needs of the users of SME financial statements?

S18. Rebuttable presumption that investment property at fair value is recovered through sale — Should the IFRS for SMEs incorporate a exemption similar to that introduced into IAS 12 for investment property at fair value?

S19. Inclusion of additional topics in the IFRS for SMEs — Are there any topics that are not specifically addressed in the IFRS for SMEs that should be covered?

S20. Other specific issues — Are there any additional issues to bring to the IASB’s attention on specific requirements in the sections of the IFRS for SMEs?

Part B — General issues.

G1. Consideration of minor improvements to full IFRSs — How should the IASB address minor improvements when the IFRS for SMEs is based on old wording from full IFRSs?

G2. Further need for Q&As — Should the current, limited program for developing Q&As continue after this comprehensive review is completed?

G3. Treatment of existing Q&As — Should the Q&As be incorporated into the IFRS for SMEs?

G4. Training material — Any comments on the IFRS Foundation’s IFRS for SMEs training material?

G5. Any further general issues — Any additional issues to bring to the IASB’s attention relating to the IFRS for SMEs?

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