December 2018 IFRS for SMEs Update
The IFRS for SMEs Update is a quarterly 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).
Board member Darrel Scott presented an overview of the plan for the next comprehensive review of the IFRS for SMEs Standard
to the Emerging Economies Group (EEG) at its October 2018 meeting held
in Seoul, South Korea. EEG members suggested the Board consider
the following topics in its review:
- the intended scope of the IFRS for SMEs Standard–members stressed that scope influences how the Board determines the requirements of the IFRS for SMEs Standard;
- application questions regarding â€˜over-the-counter markets' and
the meaning of â€˜traded in a public market' within the definition of
- whether the Board intends that the IFRS for SMEs Standard be a simplified accounting standard for small and medium-sized entities or a simplification of full IFRS Standards; and
- the application of the IFRS for SMEs Standard to small banks and financial institutions.
EEG members suggested the Board also include the following issues and topics in its review:
- the undue cost or effort exemption——members reported that the application of the exemption can create tension with auditors;
- inclusion of recently issued IFRS Standards (including the revised Conceptual Framework) in the IFRS for SMEs
Standard—members suggested the Board consider users' needs when—
looking at recently issued Standards and their application to small and
- issues considered but not incorporated in the last review, such
as borrowing costs—members also suggested that in some circumstances,
such as in measuring biological assets, it is simpler to estimate fair
value than calculate costs; and
- the requirement to prepare consolidated financial
statements——members noted that in some jurisdictions, entities were not
required to prepare consolidated financial statements.
An EEG member noted that in some instances, the IFRS for SMEs Standard includes a fall back to IFRS Standards (ie IAS 39 Financial Instruments: Recognition and Measurement);
in other instances, the Standard provides an accounting policy option
(ie subsequent measurement of property, plant and equipment). EEG
members discussed the advantages and disadvantages of the two approaches
and highlighted the need to balance providing simplified accounting
principles with users' information needs.
The Board expects to start its review in early 2019.
The IFRS Foundation's Education Initiative is updating the complete
suite of 35 stand-alone modules designed to provide support to anyone
learning about, applying or reading financial statements prepared using
the IFRS for SMEs Standard. Each module covers one section of the IFRS for SMEs Standard.
Nineteen modules have been published on the IFRS Foundation website, on:
- Section 1—Small and Medium-sized Entities
- Section 3—Financial Statement Presentation
- Section 4—Statement of Financial Position
- Section 5—Statement of Comprehensive Income and Income Statement
- Section 6—Statement of Changes in Equity and Statement of Income and Retained Earnings
- Section 7—Statement of Cash Flows
- Section 8—Notes to the Financial Statements
- Section 11—Basic Financial Instruments
- Section 12—Other Financial Instrument Issues
- Section 13—Inventories
- Section 14—Investments in Associates
- Section 15—Investments in Joint Ventures*
- Section 17—Property, Plant and Equipment
- Section 24—Government Grants
- Section 25—Borrowing Costs
- Section 27—Impairment of Assets*
- Section 30—Foreign Currency Translation*
- Section 31—Hyperinflation*
- Section 32—Events after the End of the Reporting Period
* Four modules were published during the quarter ending 31 December 2018.
Each module includes:
- requirements—the full text of the section of the IFRS for SMEs Standard
reproduced with added notes and examples. The notes and examples are
designed to clarify and illustrate the requirements.
- significant estimates and other judgements—a discussion of the
significant estimates and other judgements likely to be made in
accounting for transactions and events when applying the section of the IFRS for SMEs Standard.
- comparison with full IFRS Standards—a summary of the main differences between the section of the IFRS for SMEs Standard and the corresponding Standard from full IFRS Standards.
- test your knowledge—multiple-choice questions with answers
designed to test the learner's knowledge of the requirements of the
section of the IFRS for SMEs Standard.
- apply your knowledge—case studies, with solutions, designed to
develop the learner's ability to account for transactions and events in
accordance with the section of the IFRS for SMEs Standard.
Other modules will be published when finalised.
The following translations of the 2015 IFRS for SMEs Standard are available and have been approved by the IFRS Foundation:
Albanian, Arabic, Armenian, Bosnian, Georgian, Japanese, Kazakh, Mongolian, Portuguese and Spanish.
The following translations of the 2009 IFRS for SMEs Standard are available and have been approved by the IFRS Foundation:
Albanian, Arabic, Armenian, Bosnian, Bulgarian, Chinese (simplified),
Croatian, Czech, Estonian, French, Georgian*, German*, Hebrew, Italian,
Japanese, Kazakh, Khmer, Lithuanian, Macedonian, Mongolian, Polish,
Portuguese, Romanian, Russian, Serbian*, Spanish, Turkish and Ukrainian.
The translations are available for free download here (for translations marked with an * please visit our IFRS Shop for details on how to purchase a print copy).