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The International Accounting Standards Board (IASB) is proposing amendments to the IFRS for SMEs Accounting Standard to introduce an exception from presenting consolidated financial statements for an SME with an ultimate (or intermediary) parent that is an investment entity and that does not present consolidated financial statements. Instead, the investment entity parent presents financial statements in which its subsidiaries are measured at fair value through profit or loss in accordance with IFRS 10.

In May 2026, the International Accounting Standards Board (IASB) published the Exposure Draft Consolidation Exception.

The Exposure Draft will be open for comment for 120 days, with the comment period closing on 9 September 2026. The IASB plans to issue any resulting amendments by the end of 2026.

IASB® Update October 2026

The IASB met on 28 October 2026 to discuss:

  • feedback on the Exposure Draft Consolidation Exception and potential additional disclosure requirements (Agenda Papers 30A–30B); and
  • the due process steps to issue an amendment to the IFRS for SMEs Accounting Standard based on the proposals in the Exposure Draft (Agenda Paper 30C).

Disclosure requirements and summary of feedback on the Exposure Draft (Agenda Papers 30A–30B)

The IASB discussed its proposal to introduce a consolidation exception for an entity applying the IFRS for SMEs Accounting Standard whose ultimate or intermediate parent prepares financial statements in which the investment in the entity is measured at fair value through profit or loss in accordance with IFRS 10 Consolidated Financial Statements.

The IASB also discussed a summary of the feedback on the Exposure Draft presented to members of the SME Implementation Group (SMEIG) and their comments.

The IASB tentatively decided to proceed with the proposals in the Exposure Draft.

Twelve of 13 IASB members agreed with this decision.

The IASB confirmed that the amendment will be effective for periods beginning on or after 1 January 2027, with early adoption permitted for entities that adopt early the third edition of the IFRS for SMEs Accounting Standard.

The IASB also tentatively decided:

  1. to add requirements for an entity to disclose its use of the exception and the name and principal place of business (and country of incorporation, if different) of the parent in whose financial statements the entity is measured at fair value.

    All 13 IASB members agreed with this decision.

  2. not to add a requirement that the parent’s financial statements be ‘publicly available’.

    All 13 IASB members agreed with this decision.

  3. not to add a requirement for an entity using the exception to obtain approval from its owners.

    All 13 IASB members agreed with this decision.

  4. not to add requirements for an entity to disclose where the parent’s financial statements can be obtained or a list of its subsidiaries.

    Nine of 13 IASB members agreed with this decision.

Due process (Agenda Paper 30C)

The IASB decided not to re-expose the proposals in the Exposure Draft.

All 13 IASB members agreed with this decision.

All 13 IASB members confirmed they were satisfied the IASB has complied with the applicable due process requirements and has undertaken sufficient consultation and analysis to begin the process for balloting the amendment.

One IASB member indicated an intention to dissent from the proposals in the amendment.

Next milestone

Final Amendments