Deloitte comment letter on the Third Edition of the IFRS for SMEs Accounting Standard

Published on: 28 Feb 2023

We support the proposed alignment of the IFRS for SMEs Accounting Standard with full IFRS Accounting Standards as we believe that the credibility of all Standards developed by the IASB is enhanced if they are based on the same underlying framework and follow the same underlying principles. However, we believe that ideally this alignment should only happen once a new IFRS Accounting Standard has been subjected to a post-implementation review (“PIR”) and any changes arising from that review are implemented.

Accordingly, we disagree with the proposed amendments to Section 11 Basic Financial Instruments and Section 23 Revenue at this stage. We have provided further comments on the amendments proposed to these sections should the IASB decide to go ahead with their alignment of IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers, respectively.

We support the IASB’s decision to not align Section 20 Leases with IFRS 16 Leases in this comprehensive review.

As noted in our response to the IASB’s exposure draft Subsidiaries without Public Accountability: Disclosures, we believe that the definition of public accountability used in the IFRS for SMEs Accounting Standard appears well understood. Nevertheless, if the IASB has identified specific aspects of the definition that may benefit from clarification, we would not object to such clarifications. However, we are concerned that the current proposal will not achieve such an objective.

Finally, we are of the view that entities applying the IFRS for SMEs Accounting Standard should continue to recognise development costs as expenses as the outcome from this approach achieves the IASB’s principle of simplification in a greater manner than if an accounting policy choice were to be introduced.

Download the full comment letter below.


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