The IFRS for SMEs Standard Update is a staff summary of news, events and other information about the IFRS for SMEs Standard and related SME activities. The staff summary has not been reviewed by the International Accounting Standards Board (Board).
The summary includes:
Status of the 2019 Comprehensive Review
Publication of the Request for Information
The Board plans to publish a Request for Information (RFI) at the end of January 2020. The RFI completes the first phase of the 2019 Comprehensive Review of the IFRS for SMEs Standard. In the RFI, the Board invites its stakeholders to answer a series of questions on aligning the IFRS for SMEs Standard with full IFRS Standards. Respondents are also encouraged to comment on additional issues, including whether there are topics not currently covered by the IFRS for SMEs Standard that should be. Respondents may opt to use the Board’s optional response document to answer all (or some) of the questions set out in the RFI. Comments must be received by 27 July 2020. The RFI will be available on the IFRS Foundation’s website.
The Board’s outreach during this review is aimed at gathering a broad range of views on aligning the IFRS for SMEs Standard with full IFRS Standards, and on other issues affecting entities that are required or that choose to apply the IFRS for SMEs Standard.
Tadeu Cendon joined the Board in 2019 after working for PwC Brazil’s Accounting and Consulting Services. He advised audit teams and multinational companies whose financial reports are prepared in accordance with IFRS Standards. He has nearly three decades of experience in auditing and consulting. He has also served as the Director for Professional Development at the Brazilian Institute of Independent Auditors (IBRACON).
I have worked on the review of the IFRS for SMEs Standard since joining the Board in July 2019. The review poses different challenges from those the Board faces when reviewing a full IFRS Standard, not least because the IFRS for SMEs Standard is a stand-alone document. The IFRS for SMEs Standard is based on full IFRS Standards, with modifications to reflect the needs of users of SMEs’ financial statements and cost-benefit considerations. The Standard was developed before my time on the Board, but I can easily imagine how difficult it must have been to simplify each full IFRS Standard and combine them into a single, high-quality Standard.
The Board is conducting its second comprehensive review of the Standard, and, as the word ‘comprehensive’ suggests, we must consider each section of the IFRS for SMEs Standard, any improvements made to the corresponding full IFRS Standards since the first review and whether and how to align them.
The first comprehensive review, finalised in 2015, was limited in scope because the IFRS for SMEs Standard was still relatively new and the feedback from stakeholders was that the Board should not make major changes. This second review is different—it has special importance because, as noted above, the Board must decide whether and, if so, how the IFRS for SMEs Standard should remain aligned with full IFRS Standards.
To make fully informed decisions, the Board relies on its stakeholders for feedback of the kind sought by the Request for Information the Board will publish at the end of January 2020. We look forward to hearing your views—they will inform our approach to the remainder of the second comprehensive review.
The SMEIG will meet members of the Board and staff of the IFRS Foundation in the second half of 2020. At that meeting SMEIG members will be provided with a summary of feedback on the Board’s Request for Information (RFI) to enable the SMEIG to advise on the next stage of the 2019 comprehensive review. The meeting date will be published on the IFRS Foundation’s website once it has been confirmed.
Call for nominations
SMEIG membership is governed by the SMEIG Terms of Reference and Operating Procedures. The SMEIG comprises at least 12, and not more than 30, members appointed by the Trustees of the IFRS Foundation. Members are permitted to serve no more than two consecutive terms, with each term lasting for a maximum of three years. The SMEIG’s members are listed on the IFRS Foundation’s website.
Members of the SMEIG are selected for their knowledge of and experience in financial reporting by SMEs and, preferably, their knowledge of and direct experience with the IFRS for SMEs Standard. They normally include accountants working in SMEs, auditors in public practice, and bank lenders and other users of SMEs’ financial statements, with reasonably broad geographical representation.
The second term of 15 SMEIG members is due to end in June 2020. At the February 2020 Trustees’ meeting, the staff plans to request that the Trustees approve the call for nominations of 15 new members. The call for nominations will be published on the IFRS Foundation’s website.
The Board and the IFRS Interpretations Committee (Committee) provide educational materials to support the implementation and consistent application of IFRS Standards. These materials are available on the IFRS Foundation’s website. In addition to summaries of the Transition Resource Group’s meetings, supporting educational materials include:
The IFRS Foundation has also made available a package of 35 supporting modules to help those applying the IFRS for SMEs Standard. These modules should also help students learning about the Standard.