IASB amends the IFRS for SMEs Accounting Standard related to international tax reform

The International Accounting Standards Board (IASB) has today issued amendments to the IFRS for SMEs Accounting Standard—the Standard for companies that do not have public accountability.

The amendments to the IFRS for SMEs Accounting Standard are based on the amendments to IAS 12 Income Taxes issued in May 2023. These amendments have resulted from the introduction of the Organisation for Economic Co-operation and Development’s (OECD) Pillar Two model rules. This out-of-cycle amendment follows urgent calls from affected stakeholders.

The amendments:

• provide a temporary relief from accounting for deferred taxes arising from the implementation of the Pillar Two model rules; and
• clarify that the Standard requires companies that apply the Standard to disclose information that enables users of their financial statements to evaluate the nature and financial effect of income tax consequences of the Pillar Two legislation.  

Companies can benefit from the temporary exception in this amendment immediately. They are required to provide the disclosures set out in the amendments for annual reporting periods beginning on or after 1 January 2023.

Andreas Barckow, Chair of the IASB, said:

This amendment aims to provide SMEs that may be subject to Pillar Two model rules with the same temporary relief that is granted to companies applying full IFRS Accounting Standards, while ensuing that users of SMEs' financial reports receive the information they need.

Access the amendment

An IFRS Digital or IFRS Digital and Print subscribription is required to download the document: International Tax Reform—Pillar Two Model Rules—Amendments to the IFRS for SMEs Standard.

Subscribers can also download the amendment from:

• the 'amendments and new standards' tab of the IFRS Accounting Standards Navigator; and
• the Amendments to the IFRS for SMEs Accounting Standard—International Tax Reform—Pillar Two Model Rules project page.