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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.

The IASB expects to issue an Exposure Draft in May 2026.

IASB® Update March 2026

The IASB met on 25 March 2026 to discuss:

  • an application issue related to paragraph 9.3 of the IFRS for SMEs Accounting Standard, about the preparation of consolidated financial statements by intermediate parents with an investment entity parent (or ultimate parent) (Agenda Paper 30A); and
  • due process steps to publish an exposure draft proposing an amendment to the IFRS for SMEs Accounting Standard to address the application issue (Agenda Paper 30B).

Application question on paragraph 9.3 of the IFRS for SMEs Accounting Standard (Agenda Paper 30A)

The IASB tentatively decided:

  • to add a standard-setting project to its work plan that would introduce a consolidation exemption for intermediate parents:
    • that have an investment entity parent (or ultimate parent); and
    • that do not produce consolidated financial statements; and
  • to start the project immediately by publishing an exposure draft.

Eleven of 13 IASB members agreed with this decision.

Due process and permission to begin the balloting process (Agenda Paper 30B)

The IASB tentatively decided to propose that the amendments be effective for periods beginning on or after 1 January 2027, with early adoption permitted for entities that early adopt the third edition of the IFRS for SMEs Accounting Standard.

All 13 IASB members agreed with this decision.

The IASB tentatively decided to set a comment period of 120 days for 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 exposure draft.

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

Next milestone

Exposure Draft