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The International Accounting Standards Board (IASB) on 1 June proposed amendments to the IFRS for SMEs Accounting Standard to help small- and medium-sized entities (SMEs) respond to international tax reform. It is the first time that the IASB has proposed urgent amendments to the Standard outside its periodic review.

The proposed amendments to the income tax section of the Standard would provide the same relief as the amendments to IAS 12 Income Taxes issued in May 2023, and come in response to the Organisation for Economic Co-operation and Development’s (OECD) Pillar Two model rules.

The proposed amendments would:

  • introduce a temporary exception to accounting for deferred taxes arising from the implementation of the Pillar Two model rules;
  • introduce targeted disclosure requirements in periods when Pillar Two legislation is in effect; and
  • clarify that ‘other events’ in the disclosure objective for income tax include enacted or substantively enacted Pillar Two legislation.

IASB Chair Andreas Barckow said:

The proposed amendments would provide timely relief for affected SMEs, while ensuring their users get the best information they can out of the financial statements.

The OECD published the Pillar Two model rules in December 2021 to ensure that large multinational companies would be subject to a minimum 15% tax rate. More than 135 countries and jurisdictions representing more than 90% of global GDP have agreed to the Pillar Two model rules.

The Exposure Draft International Tax Reform—Pillar Two Model Rules—Proposed Amendments to the IFRS for SMEs Standard is open for comment until 17 July 2023.

An online survey has also been provided to make it easier for stakeholders to submit comments.

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IFRS Accounting consultative documents
IFRS Accounting Standards development
The IFRS for SMEs Accounting Standard