SME Implementation Group publishes two final Q&As

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07 Dec 2011

The SME Implementation Group (SMEIG) has published two final questions and answers (Q&As) on the IFRS for SMEs. Q&As are non-mandatory guidance.

Q&A 2011/02 Entities that typically have public accountability addresses whether an entity has public accountability. It states that, "an entity has public accountability if its debt or equity instruments are traded in a public market, or if it is in the issuing such instruments for trading in a public market, or if it holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses." The Q&A also noted that under certain circumstances, such entities may not have public accountablity, such as captive insurance subsidiaries and investment funds with only a few participants.

Q&A 2011/03 Interpretation of 'traded in a public market' in applying the IFRS for SMEs addresses how to interpret 'traded in a public market' in the definition of public accountability. It defines a public market as "a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets," however, if exchanges only occur between parties involved in the management of the entity, it is not considered 'traded in a public market.'

SMEIG has stated that an entity that does not have public accountantability is eligible to use the IFRS for SMEs.

SMEIG has two principal responsibilities:

  1. to develop non-mandatory guidance for implementing the IFRS for SMEs in the form of questions and answers (Q&As) that will be made publicly available to interested parties on a timely basis, and
  2. to make recommendations to the International Accounting Standards Board (IASB) if and when needed regarding the need to amend the IFRS for SMEs.

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