IASB Consults on Approach to Update the IFRS for SMEs Standard
IASB is seeking views on its approach to updating the IFRS for SMEs Standard—the simplified accounting standard for small and medium-size entities. The Request for Information on the comprehensive review of the IFRS for SMEs Standard asks for views on different approaches to updating the IFRS for SMEs Standard as well as for views on how the standard could be aligned with the newer IFRS standards, such as IFRS 9 on Financial Instruments, IFRS 15 on Revenue from Contracts with Customers, and IFRS 16 on Leases. IASB will consider all comments received by July 27, 2020.
This Request for Information is the first step in the second comprehensive review of the IFRS for SMEs Standard. The review will not necessarily lead to amendments to the IFRS for SMEs Standard. IASB is seeking views on whether and how the IFRS for SMEs Standard should be amended to take account of IFRS Standards, amendments to IFRS Standards, and IFRIC Interpretations in the scope of this review. Additionally, IASB is seeking views on the framework since it defines the scope and structure of the comprehensive review and determines the approach to possible amendments. The objective of the Request for Information is to seek views on whether and how aligning the IFRS for SMEs Standard with the full IFRS standards could better serve users of financial statements prepared by applying the IFRS for SMEs Standard without causing undue cost and effort for SMEs. The Request for Information has three parts:
- Part A sets out the framework IASB developed for approaching the comprehensive review and requests feedback on the Board’s approach.
- Part B contains questions on sections of the IFRS for SMEs Standard that could be aligned with IFRS Standards, amendments to IFRS Standards, and IFRIC Interpretations in the scope of this review.
- Part C seeks views on topics that have not been addressed in the IFRS for SMEs Standard and on whether, in relation to these topics, the Standard could be aligned with the full IFRS standards. It also asks about topics on which IASB has received feedback.
Additionally, the January 2020 IFRS for SMEs Update has been published, which is a staff summary of news, events, and other information about the IFRS for SMEs Standard and related SME activities. The key topics covered in the Update are related to 2019 Comprehensive Review of the IFRS for SMEs Standard and a note from Board member Tadeu Cendon on the Request for Information; update on the SME Implementation Group; and links to online resources that support the implementation and consistent application of IFRS standards. The IFRS for SMEs Standard focuses on the needs of lenders, creditors, and other users of SMEs’ financial statements who are primarily interested in information about cash flows, liquidity, and solvency. In addition, the Standard takes into consideration the costs to SMEs and the capabilities of SMEs to provide financial information.
Comment Due Date: July 27, 2020
Keywords: International, Banking, Insurance, Accounting, Financial Instruments, Leases, IFRS 9, IFRS 16, IFRS for SMEs, SME, Comprehensive Review, IFRS, IASB
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