The International Accounting Standards Board (IASB) is to go ahead with plans to reform the IFRS for SMEs standard to provide updates reflecting the last IFRS standards
At the latest IASB meeting, the board discussed the next steps to be taken in its Second Comprehensive Review of the IFRS for SMEs standard. The board decided to develop amendments to the IFRS for SMEs standard using the approach which it had consulted on in its request for information.
This approach treats alignment with IFRS standards as the starting point and applies the principles of relevance to SMEs, simplicity, and faithful representation, including the assessment of costs and benefits, in determining whether and how that alignment should take place.
In the coming months, the IASB will discuss the specific sections of the IFRS for SMEs standard that could be amended to reflect new requirements in IFRS standards that are not currently incorporated in the standard.
One of the significant changes will take into account IFRS 16 Leases, in particular: (a) simplifying the recognition and measurement requirements in respect of matters such as variable lease payments, determining the discount rate and the term of the lease; (b) retaining the disclosure requirements of Section 20; and (c) simplifying the language.
Most SMEIG members agreed with the staff’s preliminary thoughts that the IASB should undertake additional work to understand the practical challenges entities faced or are facing in implementing or applying IFRS 16 before deciding whether to align the IFRS for SMEs standard with IFRS 16.
The meeting also discussed the best approach to aligning Section 23 Revenue of the IFRS for SMEs Standard with IFRS 15 Revenue from Contracts with Customers, while considering the cost benefit implications.
Once the proposals are finalised the IASB will issue an exposure draft for review although it has not confirmed the timing for the release.
IASB staff have been conducting virtual meetings with SME preparers to discuss their views on financial reporting requirements for small and medium-sized entities.
Online resources for SMEs
The board and the SMEIG provide educational materials to support the adoption and implementation of the IFRS for SMEs standard. These materials are available on the supporting materials for the IFRS for SMEs standard section of the site and include webcasts, podcasts and webinars; and articles and other publications.
The IFRS Foundation has also made available a package of 35 supporting modules to help anyone who wants to learn more about the IFRS for SMEs standard, particularly those who apply the standard or read financial statements that were prepared in accordance with it.