The IFRS Foundation has today published Q&A 35.1 providing guidance on the application of the IFRS for SMEs® Standard. Developed by the SME Implementation Group (SMEIG), it responds to a question on the application of the undue cost or effort exemption when measuring an investment property at fair value on transition to the IFRS for SMEs Standard.
In response to feedback on the draft Q&A published in August 2019, the Q&A addresses assets and liabilities for which the IFRS for SMEs Standard permits the application of the undue cost or effort exemption when estimating fair value on transition.
The Q&A concludes that the assessment of whether there is undue cost or effort is based on information about the costs and benefits at the date of transition. Additional cost or effort due to the elapse of time between the date of transition and the date of the first financial statements prepared applying the IFRS for SMEs Standard is not included in the assessment.
During the second Comprehensive Review of the IFRS for SMEs Standard, the International Accounting Standards Board (Board) will consider the Q&As developed by the SMEIG since the issue of the 2015 amendments to the IFRS for SMEs Standard and decide whether to incorporate the responses in the Standard.
The SMEIG assists the Board in supporting the application of the IFRS for SMEs Standard. Developing non-mandatory and timely guidance on applying the IFRS for SMEs Standard is one of the two main responsibilities of the SMEIG. The SMEIG also advises the Board on amendments to the IFRS for SMEs Standard.