Guidance for micro-sized entities
The staff of the International Accounting Standards Board (IASB) is to develop guidance to help micro-sized entities apply the IFRS for Small and Medium-sized Entities (SMEs).
The SME Implementation Group (SMEIG) will work with the staff in developing the guidance and will approve a final draft to be sent to the IASB for review.
Over 80 jurisdictions have either adopted the IFRS for SMEs or stated a plan to do so within the next few years. In some of these jurisdictions the IFRS for SMEs is being used by very small companies with just a few employees. The IASB was asked and has agreed to develop guidance suitable for micros currently applying the IFRS for SMEs and also those considering doing so in the future.
IASB staff will develop the guidance by extracting from the IFRS for SMEs only those requirements that are clearly necessary for most micro-sized entities, without modifying any of the principles for recognising and measuring assets, liabilities, income, and expenses. Only the main principles relating to those requirements would be included. The guidance for micros will be a ‘sub-set’ of the IFRS for SMEs. It will not be a separate standard.
The guidance will contain cross-references to the IFRS for SMEs for matters not dealt with in the guidance booklet. Subsequently, having applied the guidance, an entity’s notes to financial statements and auditor’s report could refer to conformity with the IFRS for SMEs because there is no modification.
We do not have a fixed timetable for completion of the guidance. However, staff is aiming for publication in early 2013.