Consultation on investment property under IFRS for SMEs

The IFRS Foundation has issued a draft Q&A for comment on the application of the IFRS for SMEs standard relating to investment property exemptions on first adoption of the accounting rules

The draft Q&A was issued in response to a question from stakeholders about the application of the undue cost or effort exemption for investment property on the date of transition under Section 35 Transition to the IFRS for SMEs.

The SME Implementation Group (SMEIG), which is responsible for developing non-mandatory guidance on applying International Financial Reporting Standards (IFRS), has reviewed the issue and has now agreed a way forward.

It has proposed that when preparing the first financial statements under IFRS for SMEs, in terms of timing, the date of transition to the standard should be the measurement point for the assessment of whether, at the date of transition, an investment property can be measured reliably at fair value without undue cost or effort on information about the costs and benefits.

It also confirmed 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 should not be considered when measuring the investment property at the date of transition.

The consultation closes for comment on 7 October 2019 and the draft Q&A is available here.

Sara White | 8 Aug 2019

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