Draft Guidance on IFRS for SMEs Issued for Public Comment
A draft guidance on IFRS for SMEs published today by the SME Implementation Group (SMEIG) raises the issue of whether a parent entity may present separate financial statements if it does not have public accountability and if a group is ordered to present consolidated financial statements in accordance with full IFRS.
The draft guidance aims to provide a “timely guidance on specific accounting questions that are being raised with the SMEIG by users implementing the IFRS for SMEs.”
Being a question and answer draft guidance, it included responses affirming the questions raised above.
Furthermore, the draft guidance provides that a parent entity can be publicly accountable if its own debt or equity instruments are traded in a public market, or still in the process of issuing such instruments, or if it holds assets in a fiduciary capacity for a broad group of outsiders as one of its businesses.
Either way, a parent entity can present a separate financial statements in addition to consolidated financial statements. However, the draft guidance is not mandatory.
The draft guidance on IFRS for SMEs has been opened for public comment until April 4, 2011 by the SMEIG which assists the International Accounting Standards Board (IASB) in implementing the IFRS for SMEs.
The SMEIG helps the IASB regarding the amendments made to the IFRS for SMEs.