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In September 2022, the International Accounting Standards Board (IASB) published the Exposure Draft Third edition of the IFRS for SMEs Accounting Standard as part of its second comprehensive review of the Standard.

The Exposure Draft proposes amendments to the IFRS for SMEs Accounting Standard to reflect improvements that have been made in full IFRS Accounting Standards (in the scope of the second comprehensive review) while keeping the Standard simple.

IASB® Update July 2024

The IASB met on 22 July 2024 to redeliberate the proposals in the Exposure Draft Third edition of the IFRS for SMEs Accounting Standard.

Impairment of financial assets (Agenda Papers 30A–30C)

The IASB tentatively decided to withdraw its proposal to introduce an expected credit loss model for the impairment of some financial assets.

Twelve of 14 IASB members agreed with this decision.

The IASB tentatively decided to add a requirement for an SME to disclose its analysis of financial assets by due date (ageing analysis).

Thirteen of 14 IASB members agreed with this decision.

Issued financial guarantee contracts (Agenda Paper 30D)

The IASB tentatively decided:

  1. to include intragroup financial guarantee contracts issued at nil consideration in the scope of Section 21 Provisions and Contingencies;
  2. to keep other issued financial guarantee contracts in the scope of Part II of Section 11 Financial Instruments of the third edition of the Standard and to require an SME to measure such contracts at fair value through profit or loss; and
  3. to add to Section 21 requirements for an SME to disclose:
    1. the nature and business purpose of an issued intragroup financial guarantee contract;
    2. the maximum amount the SME would have to pay if that contract is called on; and
    3. an indication of the uncertainties relating to the amount or timing of any outflow of resources under the contract.

All 14 IASB members agreed with these decisions.

Sweep and other issues (Agenda Paper 30E)

The IASB tentatively decided:

  1. to require that, on initial recognition, an SME measure basic financial instruments that are trade receivables at an amount determined by applying the proposed revised Section 23 Revenue from Contracts with Customers if:
    1. the contract does not constitute a financing transaction; or
    2. the SME applies the exemption proposed in paragraph 23.59 of the Exposure Draft;
  2. to add a definition of ‘transaction price’ (for a contract with a customer) that matches the description of the term proposed in paragraph 23.41 of the Exposure Draft;
  3. to require that an SME use its expectation of the products that will be returned to account for sales with a right of return; and
  4. not to include guidance from the Q&As developed by the SME Implementation Group in the IFRS for SMEs Accounting Standard.

All 14 IASB members agreed with these decisions.

Due process (Agenda Paper 30F)

The IASB tentatively decided to set an effective date of 1 January 2027 for the third edition of the Standard.

Eleven of 14 IASB members agreed with this decision.

Subject to finalising its proposals and completing the due process steps for the Exposure Draft Addendum to the Exposure Draft Third edition of the IFRS for SMEs Accounting Standard, the IASB decided to begin the balloting process for the prospective amendments to the IFRS for SMEs Accounting Standard without re-exposing the IASB’s tentative revisions to these prospective amendments.

All 14 IASB members agreed with this decision.

One IASB member indicated an intent to dissent from issuing the Standard.

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IFRS for SMEs Accounting Standard