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Accounting Standards Board
The Institute of Chartered Accountants of India
10th October, 2022

Third edition of the IFRS for SMEs Accounting Standard

IFRS for SMEs Accounting Standards are applied for general purpose financial statements of small companies, primarily; small and medium-sized entities (SMEs), private entities and non-publicly accountable entities, which is required or permitted in 86 jurisdictions across the globe. This Standard is based on full IFRS with modifications to reflect the needs of users of SMEs’ financial statements and cost-benefit considerations. It focuses on the information needs of lenders, creditors and other users of SME financial statements who are interested primarily in information about cash flows, liquidity and solvency.

In 2009, the International Accounting Standards Board (IASB) issued the first edition of International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs Accounting Standards). The IASB maintains the SMEs Standards through periodic review and proposes amendments by publishing an omnibus exposure draft. In developing these exposure drafts, it considers new and amended IFRS Accounting Standards as well as issues brought to its attention regarding the application of the Standard.

In 2015, the IASB completed its first comprehensive review of the Standard. It issued 2015 Amendments to the IFRS for SMEs and a second edition of the Standard, incorporating the 2015 amendments, which became effective in 2017.

In 2019, the IASB conducted its second comprehensive review of the SMEs Standard, in line with the objective of commencing a comprehensive review approximately two years after the effective date of the amendments to the SMEs Standard resulting from a previous comprehensive review. As part of this second comprehensive review, the IASB published Request for Information Comprehensive Review of the IFRS for SMEs Standard as a first step in its second comprehensive review and consulted with the SME Implementation Group (SMEIG), an advisory body to the IASB. The objective of the Request for Information was to seek views on whether and, if so, how aligning the SMEs Standard with new and amended full IFRS Accounting Standards in the scope of the review to better serve users of financial statements prepared applying the SMEs Standard without causing undue cost or effort for SMEs.

After considering the feedback on the Request for Information and the recommendations of the SMEIG, the IASB is proposing amendments to the IFRS for SMEs Accounting Standard set out in the following Exposure Draft:

  • Third edition of the IFRS for SMEs Accounting Standard

Though India will not be directly affected with changes happening in IFRS for SMEs Standards, however, with the view to contribute to standard setting at international level, the Exposure Draft of the third edition of the IFRS for SMEs Accounting Standard issued by the IASB.

Invitation to comment

The Accounting Standards Board (ASB) of ICAI with the aim to provide an opportunity to the various stakeholders in India to raise their concerns at the initial International Standard-setting stage itself, invites comments from public. The downloadable version is available at: https://resource.cdn.icai.org/71753asb57738.pdf

How to comment

Comments on the abovementioned ED may be submitted through any of the following modes, so as to be received not later than December 31, 2022:

1. Electronically: Click on http://www.icai.org/comments/asb/ to submit comment online (Preferred method)
2. Email: Comments can be sent to: [email protected]
3. Postal Secretary, Accounting Standards Board,
The Institute of Chartered Accountants of India,
ICAI Bhawan, Post Box No. 7100,
Indraprastha Marg, New Delhi 110 002

Further clarifications on this ED may be sought by e-mail to [email protected]

****************

Request for Information for comprehensive review of IFRS for SMEs Standard issued by the IASB for comments.

The Institute of Chartered Accountants of India

Introduction

International Accounting Standards Board (IASB) commences second comprehensive review of the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs). IFRS for SMEs Standard are applied for general purpose financial statements of small companies, primarily; small and medium-sized entities (SMEs), private entities and non-publicly accountable entities, which is required or permitted in 86 jurisdictions across the globe. This Standard is based on full IFRS with modifications to reflect the needs of users of SMEs’ financial statements and cost-benefit considerations. It focuses on the information needs of lenders, creditors and other users of SME financial statements who are interested primarily in information about cash flows, liquidity and solvency.

The first comprehensive review of the IFRS for SMEs Standard commenced in 2012, an amended Standard was issued in 2015 and became effective on 1 January 2017.

In the second comprehensive review, IASB is seeking views on its approach in updating the IFRS for SMEs Standard. The objective of the consultation (Request for Information) is to seek views on whether and how to align the IFRS for SMEs Standard with full IFRS Standards (Standards developed for publicly accountable entities) without causing undue cost for entities applying the Standard.

In view of criticality of the topic, the ASB of ICAI also proposes to organise Outreach programmes across different locations (further details to be announced in due course) to gather views on the above Request for Information.

Invitation to comment

ASB invites comments on the Request for Information from the public. The downloadable version is available at: https://resource.cdn.icai.org/58809asb47898.pdf

How to comment

Comments should be submitted using one of the following methods, so as to be received not later than May 30, 2020.

1. Electronically: Visit at the following link (Preferred method):
http://www.icai.org/comments/asb/
2. Email: Comments can be sent to: [email protected]
3. Postal: Secretary, Accounting Standards Board,
The Institute of Chartered Accountants of India,
ICAI Bhawan, Post Box No. 7100,
Indraprastha Marg, New Delhi 110 002

Further clarifications on this Request for Information may be sought by e-mail to [email protected]

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