The Financial Reporting Technical Committee of Chartered Accountants Ireland has issued its response to the International Accounting Standards Board's (IASB’s) Exposure Draft IFRS for SMEs® Accounting Standard- Third edition of the IFRS for SMEs Accounting Standard. Some of the key changes proposed by the IASB are summarised here.
The standard is not adopted in Ireland or the UK, however, FRS 102 which is adopted in Ireland and the UK is based on the IFRS for SMEs, but with modifications.
In its response, the Institute made the following recommendations to the IASB;
- That the incurred loss model in section 11- Financial instruments is extended to intercompany balances between entities in the same group.
- That certain intergroup guarantees should be recognised only where an outflow of economic benefits is probable.
- That section 19- Business combinations is renumbered in its entirety to ensure ease of use for preparers.
- That the alignment of IFRS 16, whilst not being included in this periodic review, occurs once the post implementation review of IFRS 16 is complete.
- That there are potential concerns relating to two simplifications made to IFRS 15 principles in section 23- Revenue from contracts with customers.