This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

Deloitte comment letter on SME Implementation Group draft Q&As

  • Deloitte Comment Letter Image

16 Jun 2011

Deloitte's IFRS Global Office has submitted a letter of comment on the following SME Implementation Group draft Q&As:

  • Draft Q&A 2011/02: IFRS for SMEs Section 1, Issue 2 Captive insurance subsidiaries
  • Draft Q&A 2011/03: Interpretation of 'traded in a public market'
  • Draft Q&A 2011/04: Investment funds with only a few participants

The comment letter expresses Deloitte's views on the above three draft Q&As on the interpretation of 'public accountability' in the context of the scope of the IFRS for SMEs, and addresses wider issues on the Q&A setting process. The following is an excerpt from the letter:

In general, we question the appropriateness of these draft Q&As for the following reasons:

  • as noted in paragraph BC75 of the IFRS for SMEs, local bodies, such as legislators and regulators, are best placed to judge how the concept of public accountability is viewed in their jurisdictions; and
  • in determining the scope of the IFRS for SMEs, the Board decided upon a conceptual criterion. These draft Q&As could be read as adding rules to the concept.

We also question whether the level of SME Implementation Group's due process applied to the Q&As is appropriate and consistent with other similar activities at the IFRS Foundation and IASB. The Group's Terms of Reference and Operating Procedures were not subject to public comment, a regrettable deficiency that may impact the legitimacy of the product of the Group's deliberations. As the Q&As are considered IFRS related documents and are associated with the IASB, we believe that the due process steps followed in the development of an IFRIC Interpretation which include discussion and voting in a public meeting, public consultation on agenda items and positive approval of an Interpretation by the Board should be followed for these and any future Q&As.

In addition, we note that Draft Q&A 2011/03 seeks to interpret a term ('traded in a public market') which exists in full IFRSs (IFRS 8, IAS 27 and IAS 33). We do not consider it appropriate for a Q&A on the IFRS for SMEs to address an issue which applies to other IFRSs as such guidance will, whether it is intended to or not, be interpreted as being applicable to those IFRSs. ...

Click to Download our Comment Letter on SME Implementation Group draft Q&As (PDF 71k).

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.