The responses we had [to the ASB's invitation to comment on the IASB's SME Exposure Draft] expressed a large degree of support for the ED. While most respondents did not see the proposed IFRS for SMEs as being suitable for small, and in particular micro, entities, there was a strong majority in favour of the standard being available for application by middle tier and larger companies that – in line with the IASB's definition – do not have public accountability and publish general purpose financial statements for external users. This view is consistent with the discussions that were held in the four public meetings in which the ASB participated with the major accountancy bodies in the UK and Ireland.

On the evidence of the feedback the ASB has received, it is disappointing that the Commission appears to be taking such a negative stance on the IASB's proposed IFRS for SMEs and seeming to rule out the possibility of Member States applying the standard.

As a result, the ASRB and FRSB have decided to delay, until further notice, the mandatory adoption of NZ IFRSs for certain small entities, defined as follows:

• Companies that are not issuers as defined by the FRA, in either the current or preceding accounting period and that:
  • are not required by section 19 of the FRA to file their financial statements; and
  • are not large, as defined by section 19A(b) of the FRA. A company is large if at least two of the following apply:
    • total assets of the company and its subsidiaries (if any) exceed NZ$10,000,000;
    • turnover or the company and its subsidiaries (if any) exceeds NZ$20,000,000; or
    • the company and its subsidiaries (if any) have 50 or more full-time equivalent employees.
• Other entities that:
  • are not subject to the FRA; and
  • are not publicly accountable or large as defined in the Framework for Differential Reporting. An entity is large if at least two of the following apply:
    • total assets exceed NZ$10,000,000;
    • total income exceeds NZ$20,000,000; or
    • 50 or more full-time equivalent employees.

Updates to existing IFRS e-Learning modules under development: We are working on updates to the following modules to reflect recent changes to the Standards and Interpretations. We expect to release them in early 2008:

• IASs 16, 17, 23, 28, 36, 32/39, and 37
• IFRSs 1 and 2

• IFRS 8
• IFRIC 12

The proposed FSP, titled Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement), would require 'split accounting' on initial recognition, that is, separation of the convertible security into two components:

• A debt component representing the issuer's contractual obligation to pay principal and interest.
• An equity component representing the holder's option to convert the debt security into equity of the issuer or an equivalent amount of cash.