The IASB has, to date, received over 100 comment letters on the SME discussion paper, all of which are posted on the IASB website. The Board had before them an analysis of 41 of those comment letters. All of the comment letters will be included in an analysis to be presented at a future meeting. As the short time between the closure of the comment period and the meeting had not allowed a complete analysis to be prepared, the Board discussed some of the main concerns raised by constituents but deferred any decisions to a future meeting.

The Board noted that most respondents did not support a 'clean slate' approach to the development of an SME standard, rather advocating the development of an SME standard from the base provided by existing IFRS. However, a majority of respondents supported the Board being open to the possibility of differences in the framework and/or the recognition and measurement principles between SMEs and full IFRS.

The Board discussed what 'user needs' are in the context of SMEs. It was noted that while a majority of respondents supported differences from full IFRS when they can be justified by reference to 'user needs' no respondents had provided helpful comments describing what those 'user needs' are. A number of Board members expressed discomfort with proceeding with the project without doing more comprehensive research into user needs. However, it was suggested that rather than an academic study, the most appropriate way forward would be to create either an exposure draft or an invitation to comment on certain topics which would give constituents a model to comment on.

The Board noted that the intended application of the SME standard had been poorly understood. They clarified that any entities that are publicly listed or otherwise publicly accountable should be required to prepare accounts using full IFRSs. Other entities could use the SME standard. However, a jurisdiction might choose to push full IFRSs down to a wider group of preparers. Accordingly it was noted that there would be two groups of users of the SME standard - those without public accountability that are required to prepare financial reports in accordance with IFRSs by their jurisdiction, and those who voluntarily compile IFRS financial reports.

The Board noted that certain decisions regaqrding application of the SME standard were jurisdictional, rather than the choice of the IASB, and expressed a need for jurisdictions to be educated as to the decisions they must make in respect of the application of the SME standard, particularly the interpretation of when an entity is considered to be of 'economic significance' to a jurisdiction.

Board member Tom Jones, who has been appointed the chair of the SME sub-committee, noted the importance of the IASB completing this project on a timely basis. He noted that there are a number of jurisdictions out there that would develop their own SME regimes if the IASB did not. He also noted that there is a wide range of users in relation to SMEs, including but not limited to investors, creditors, banks,and governments. The Chairman of the IASB has appointed a sub-committee to assist the Board in completing this project considering both its significance and its urgency. It was noted that the sub-committee would maintain an open mind about recognition and measurement differences and will consider both the simplification approach and the reorganisation approach to completing the SME project.

The SME sub-committee, consisting of Tom Jones (chair), Gilbert Gelard, Jim Leisenring, Tricia O'Malley, Bob Garnett, Geoff Whittington, and Paul Pacter (IASB staff director for SMEs) will meet prior to the November Board meeting to consider the analysis of all comment letters, will present its preliminary thoughts at the November Board meeting, and will bring a proposal for the best way forward with this project to the December IASB meeting.