IFRS Foundation Consults on Q&A on Application of Its SMEs Standard
IFRS Foundation is requesting comments on its draft questions and answers (Q&A) on the application of the IFRS for SMEs [small and medium-sized entities] Standard. The draft Q&A respond to a question from stakeholders about the application of the undue cost or effort exemption for investment property on the date of transition to the IFRS for SMEs Standard. The draft Q&A concludes that additional cost or effort due to the elapse of time between the date of transition and the date of preparing the first IFRS for SMEs financial statements is not considered. The consultation is open for comment until October 07, 2019.
The draft Q&A has been developed by the SME Implementation Group (SMEIG), which assists IASB in supporting the application of the IFRS for SMEs Standard. The Q&A provide non-mandatory and timely guidance on specific accounting questions about applying the IFRS for SMEs Standard. The group also advises IASB on amendments to the IFRS for SMEs Standard. During the 2019 Comprehensive Review of the IFRS for SMEs Standard, IASB will consider the Q&A developed since the issue of the 2015 amendments to the IFRS for SMEs Standard and determine whether to incorporate the responses in the IFRS for SMEs Standard. The draft Q&A is the second to be published since the initial comprehensive review of the IFRS for SMEs Standard, completed in May 2015.
The IFRS for SMEs is a standard that is tailored for small companies. It focuses on the information needs of lenders, creditors, and other users of SME financial statements who are interested primarily in information about cash flows, liquidity, and solvency. The standard takes into account the costs to SMEs and the capabilities of SMEs to prepare financial information. The IFRS for SMEs Standard includes an option for entities to apply the recognition and measurement requirements of IAS 39 on financial instruments. For accounting periods beginning before January 01, 2018, an SME shall apply the version of IAS 39 that is in effect at its reporting date, by reference to the full IFRS publication titled IFRS® Standards Consolidated without early application (Blue Book). For accounting periods beginning on or after January 01, 2018, an SME shall apply the version of IAS 39 that applied immediately prior to the effective date of IFRS 9 Financial Instruments.
Comment Due Date: October 07, 2019
Keywords: International, Accounting, Q&A, IFRS 9, SME, IFRS for SMEs, IAS 39, IASB, IFRS
Featured Experts
Metin Epözdemir
Metin Epözdemir helps European and African banks with design and implementation of credit risk, stress testing, capital management, and credit loss accounting solutions.
Masha Muzyka
CECL, IFRS 9, and IFRS 17 expert; credit risk and insurance risk specialist; strategic planning and credit analytics solutions consultant
Jacob Grotta
Risk-measurement and structured-finance expert; experienced financial data analytics executive
Previous Article
HKMA and ACPR to Collaborate for Financial Technology InnovationRelated Articles
EU Amends CRD4 and CRD5 as Part of Capital Markets Recovery Package
EU published Directive 2021/338, which amends the Markets in Financial Instruments Directive (MiFID) II and the Capital Requirements Directives (CRD 4 and 5) to facilitate recovery from the COVID-19 crisis.
EU Committee Recommends Systemic Risk Buffer of 4.5% in Norway
The Standing Committee of the European Free Trade Association (EFTA) recommended that a systemic risk buffer level of 4.5% for domestic exposures can be considered appropriate for addressing the identified systemic risks to the stability of the financial system in Norway.
PRA Clarifies Approach to Onshoring of Credit Risk Rules for UK Banks
In a recent statement, PRA clarified its approach to the application of certain EU regulatory technical standards and EBA guidelines on standardized and internal ratings-based approaches to credit risk, following the end of the Brexit transition.
FSB Sets Out Work Priorities for 2021
In a recently published letter addressed to the G20 finance ministers and central bank governors, the FSB Chair Randal K. Quarles has set out the key FSB priorities for 2021.
EU Publishes Corrigendum to Revised Capital Requirements Regulation
EU published, in the Official Journal of the European Union, a corrigendum to the revised Capital Requirements Regulation (CRR2 or Regulation 2019/876).
ESAs Issue Statement on Application of Sustainability Disclosures Rule
ESAs published a joint supervisory statement on the effective and consistent application and on national supervision of the regulation on sustainability-related disclosures in the financial services sector (SFDR).
EC Consults on Crisis Management and Deposit Insurance Frameworks
EC published a public consultation on the review of crisis management and deposit insurance frameworks in EU.
HKMA Enhances Loan Guarantee Scheme to Alleviate Pressure on SMEs
HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.
EBA Proposes Standards for Supervisory Cooperation Under IFD
EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.
BoE Addresses Banks in Scope of First Resolvability Assessment
BoE issued a letter to the CEOs of eight major UK banks that are in scope of the first Resolvability Assessment Framework (RAF) reporting and disclosure cycle.
