Very small companies are expected to receive IFRS financial reporting guidance tailored to their needs, as the staff of the International Accounting Standards Board (IASB) will develop guidance to help so-called “micro-sized entities” apply IFRS for Small and Medium-sized Entities (IFRS for SMEs) in their financial reporting.
The IASB staff will extract from IFRS for SMEs only those requirements that clearly are necessary for most micro-size entities. The principles for recognizing and measuring assets, liabilities, income, and expenses will not be altered, but the guidance will include only the main principles relating to those requirements.
Although there is no current official IASB definition of “micro-sized entity,” the term usually refers to entities with fewer than 10 employees.
The micro guidance will contain cross-references to IFRS for SMEs for issues that are not contained in the guidance booklet. A company that applies the guidance will be able to include notes to financial statements and auditor’s reports that refer to conformity with IFRS for SMEs because there is no modification of principles.
The SME Implementation Group will work with the IASB staff in developing the guidance, and will approve a final draft to be sent to the IASB for review.
The IFRS Foundation is changing its constitution to reflect the separation of the roles of the foundation’s CEO and the chairman of the IASB.
This move formalizes a separation that previously was implemented following an internal structure reorganization at the end of 2011.
The chair of the IASB, currently Hans Hoogervorst, no longer serves as CEO of the IFRS Foundation. The CEO position is included in the new role of executive director of the foundation.
Yael Almog, who directed the International Affairs department of the Israel Securities Authority, was appointed to the executive director position in January 2012.
A drafting review of the change in the constitution is available at ifrs.org (registration required); comments can be made through Oct. 23.
The IASB chair retains full responsibility for all standard-setting matters, including resources. The separation was made to ensure segregation of responsibilities for IASB operations to prevent an actual or perceived conflict of interest in standard setting.