The IASB has issued amendments to the IFRS for Small and Medium-sized Entities (IFRS for SMEs), after completing its first comprehensive review of the standard. The objective of the review was to consider implementation experience and developments in full IFRS since IFRS for SMEs was issued in 2009 and make amendments to the standard, if necessary, without adding complexity.
Key changes include:
- The alignment of accounting for income taxes and exploration assets with full IFRS;
- A new option to use the revaluation model for property, plant and equipment; and
- Some new exemptions, supporting guidance and clarification of existing requirements.
In line with the IASB’s objective of retaining simplicity, the new IFRS standards on consolidation, financial instruments, revenue, employee benefits and fair value measurement have not been incorporated into IFRS for SMEs.
The IFRS for SMEs is intended to facilitate financial reporting by small medium-sized entities that want to use international standards by providing an accounting standard suitable for them. It is a simplified and slimmed-down version of full IFRSs tailored for the needs and capabilities of small and medium-sized entities.
The IFRSs for SMEs is a separate stand-alone document organised by topic rather than corresponding to the numbering of full IFRSs. It does not contain cross references to full IFRSs; the only exception is that an entity applying the IFRS for SMEs can choose, for financial instruments, to apply either the provisions of the IFRS for SMEs or the recognition and measurement provisions of IAS 39 and the disclosure requirements of the IFRS for SMEs.
The IFRS for SMEs does not contain an effective date; instead, it will take effect from the date determined by the national regulator in each jurisdiction.
The amendments are effective for annual periods beginning on or after 1 January 2017. Early adoption is permitted, provided that all relevant amendments are applied at the same time.