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Upcoming SMEIG meeting to analyse possible changes to IFRS for SMEs

  • IFRS for SMEs (mid blue) Image

22 Jan 2013

The IASB has published agenda papers for the upcoming meeting of the SME Implementation Group (SMEIG), which is to be held on 4-5 February 2013. The papers contain a summary of the responses received to the IASB's 'Request for Information: Comprehensive Review of the IFRS for SMEs' which was issued in June 2012, together with an analysis of those issues and the recommendations on how to progress proposed changes to the IFRS for SMEs.

The objective of the Request for Information was to seek public views on whether there is a need to make any amendments to the IFRS for SMEs , and, if so, what amendments should be made.  The papers note that the IASB received 89 comment letters on the Request for Information from a broad range of constituents across the globe (these submissions are available on the IASB website).

Feedback received

Agenda Paper 2 (link to IASB website) to be discussed at the meeting presents the issues in the Request for Information, summarises the main comments received from respondents to the RFI on those issues, sets out the questions that IASB staff would like the SMEIG to develop recommendations for, and provides the IASB staff recommendation for each question asked.

Highlights of the staff recommendations include:

  • It may be beneficial for entities with public accountability (as currently defined) to apply the IFRS for SMEs
  • Changes to full IFRS s should only be considered for incorporation in the IFRS for SMEs after they have become established under full IFRSs and implementation experience has been assessed, e.g. after the post-implementation review has been performed, where appropriate
  • The IFRS for SMEs should not be revised to permit the revaluation model for property, plant and equipment or introduce an option to allow the capitalisation of borrowing costs
  • The 'fall back' to IAS 39 Financial Instruments: Recognition and Measurement currently in the IFRS for SMEs should be retained until IFRS 9 is considered, with the possibility of removing the 'fall back' altogether
  • The IFRS for SMEs should be revised to conform it to IAS 12 Income Taxes, modified as appropriate to reflect the needs of users of SME financial statements

Agenda Paper 3 (link to IASB website) to be discussed at the meeting describes 16 additional issues raised by respondents, sets out the questions that IASB staff would like the SMEIG to provide recommendations for, and provides the IASB staff recommendation for each question asked.

This paper considers issues such as whether amendments should be made to conform the IFRS for SMEs with the Conceptual Framework, whether to eliminate the 'other comprehensive income' concept from the IFRS for SMEs, a broad range of specific topic issues (e.g. a recommendation to allow foreign currency loans to be measured on the amortised cost basis) and various other general issues.  Of interest is consideration of whether the IASB should consider a potential project, outside the IFRS for SMEs, to develop a international reduced disclosure framework for subsidiaries of listed groups.

Process for finalisation

The SMEIG will review the responses to the Request for Information at the February meeting and a report will be drafted of the SMEIG recommendations arising from those discussions.  The report will be circulated to SMEIG members for approval before the report is provided to the IASB for consideration in developing an exposure draft of proposed changes to the IFRS for SMEs.

The exposure draft is expected to be released in mid 2013, and the SMEIG is expected to consider responses to the ED later in 2013 before the IASB finalises amendments to the IFRS for SMEs in the first half of 2014.

The revisions to the IFRS for SMEs arising from this process are expected to be effective from 2015.

Click for access to the meeting papers (link to IASB website).

Update: The agenda for the SMEIG meeting was subsequently issued and is available on the IASB's website.

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