The Board discussed draft SME versions of the IASB Framework for the Preparation and Presentation of Financial Statements and of three standards:

• IAS 16 Property, Plant and Equipment
• IAS 18 Revenue
• IAS 23 Borrowing Costs

As was the case with the discussion at previous meetings of a number of other draft SME versions of IFRSs, the Board's discussion was preliminary, and no decisions were made. Decisions on the content of IASB Standards for SMEs will be made only after the Board has considered the responses to the Discussion Paper Preliminary Views on Accounting Standards for Small and Medium-sized Entities.

Draft SME version of the Framework. Staff presented to the Board an extraction of the principles from the Framework in the form of an IASB Framework for SMEs. Board Members expressed some concern that the extraction might be regarded as creating a different Framework for SMEs than the one looked to by entities following IFRSs. The Board concluded to wait to review the responses to the Discussion Paper before providing guidance to the staff on whether a special version of the Framework is appropriate for SMEs. Draft SME version of IAS 16. The SME version of IAS 16 includes no discussion of the revaluation model but has a reference back to IAS 16 if an SME wants to adopt the revaluation model rather than the historical cost-depreciation model. The Board did not disagree with this approach.

Board members generally felt that some of the grey-letter guidance in IAS 16 that was omitted in the draft SME version of that standard would be particularly useful to an SME. Examples include the initial costs to be included as part of the cost of an item of property, plant and equipment; accounting for costs subsequent to initial acquisition; inspection and overhaul cost; costs of self-constructed assets; component depreciation; and when depreciation should begin and should cease. Staff agreed to review the deleted guidance and, at a future meeting, present to the Board a revised standard with certain guidance reinstated, perhaps as an appendix of application guidance rather than in the body of the SME standard. The Board also suggested that the staff consider a similar approach (application guidance and examples in an appendix) for other SME standards.

Draft SME version of IAS 18. All of the principles in IAS 18 are included in the draft SME version of that standard except that the detailed guidance on exchanges of goods and services in paragraph 12 of IAS 18 is replaced with a reference back to IAS 18. Also, several disclosures are not included. Board members generally felt that revenue recognition is a pervasive issue for all SMEs, and most of the guidance in IAS 18 should be retained in the SME version of that standard.

Draft SME version of IAS 23. IAS 23 was not revised in the recent Improvements Project. It presents the two accounting policy choices (expensing and capitalisation) as the 'benchmark' and 'allowed alternative' respectively. The SME version of IAS 23 retains the two choices but does not include any discussion of the capitalisation model. Instead, there is a reference back to IAS 23 if an SME wishes to choose capitalisation. However, the SME version of IAS 23 does not describe the choices as 'benchmark' and 'allowed alternative'. Instead, it describes them as the 'expense model' and the 'capitalisation model'. The Board did not disagree with this approach.

Project Plan. The Board also discussed a project plan proposed by the staff and made some modifications to it. Under the plan tentatively agreed to by the Board:

• The Board will have reviewed the SME version of all IASs and IFRSs and the Framework by December 2004, in most cases at more than one Board meeting. However, the views expressed in the letters of comment on the Board's Discussion Paper may result in a change to this timetable.
• An SME version of IAS 26 Accounting and Reporting by Retirement Benefit Plans is not needed because such plans have a fiduciary responsibility to their participants and, therefore, have public accountability. They must use IFRSs, not SME standards.
• The Board will begin its consideration of the comments received on the Discussion Paper at the October 2004 meeting. Consideration would continue in November and December 2004.
• Assuming that the responses to the Discussion Paper do not result in major alterations to the Board's approach to the project, in January 2005 the staff will bring to the Board an initial combined document reflecting a proposed exposure draft of IASB Standards for SMEs. Deliberation of that document would continue during the first half of 2005, with a goal of approval of an exposure draft by 30 June 2005.
• The Board suggested that the staff organise one or more roundtable meetings with preparers, auditors, and users of SME financial statements to discuss their views about the IASB's exposure draft of IASB Standards for SMEs after it is published.