Exposure Draft Third edition of the IFRS for SMEs Accounting Standard


The International Accounting Standards Board (IASB) published the Exposure Draft Third edition of the IFRS for SMEs Accounting Standard (Exposure Draft) as part of its second comprehensive review of the IFRS for SMEs Accounting Standard (Standard).

  • In 2009, the IASB issued the first edition of the Standard and it was developed based on requirements in full IFRS Accounting Standards with simplifications to reflect the needs of small and medium-sized entities (SMEs) and users of their financial statements. 
  • In 2015, the IASB completed its first review of the Standard by issuing the second edition of the IFRS for SMEs Accounting Standard. There were limited amendments to the Standard resulting from the first review.
  • In 2019, the IASB commenced its second review of the IFRS for SMEs Accounting Standard, publishing a request for information in January 2020. In response to the feedback from stakeholders and the advice of the SME Implementation Group (SMEIG), the IASB has developed the Exposure Draft of proposed amendments.

The Exposure Draft proposes amendments to the Standard to reflect improvements that have been made in full IFRS Accounting Standards (in the scope of the second comprehensive review) while keeping the Standard simple to the SMEs. The IASB applies the principles of relevance, simplicity and faithful representation, including the assessment of costs and benefits and the Basis for Conclusions on this Exposure Draft explains how the IASB applied the principles for this review to decide whether and, if so, how to propose amending the Standard to align it with full IFRS Accounting Standards.

The Exposure Draft proposes to:
  • align the Standard with the Conceptual Framework for Financial Reporting issued by the IASB in 2018;
  • update the Standard for new requirements in IFRS 3 Business Combinations, IFRS 9 Financial Instruments, IFRS 10 Consolidated Financial Statements and IFRS 11 Joint Arrangements;
  • update the Standard for simplified requirements based on IFRS 13 Fair Value Measurement and IFRS 15 Revenue from Contracts with Customers; and
  • include other improvements made to full IFRS Accounting Standards since the second edition of IFRS for SMEs Accounting Standard was published in 2015.

This Exposure Draft proposes that the effective date of the amended Standard is at least two years from the date that the third edition of the IFRS for SMEs Accounting Standard is issued. Early adoption of the third edition of the IFRS for SMEs Accounting Standard in its entirety would be permitted. 

The IASB will consider feedback on the Exposure Draft in finalising the Third edition of the IFRS for SMEs Accounting Standard.

Click here to download the Exposure Draft and the following accompanying documents:

 Basis for Conclusions

 Snapshot

 Questions and Answers

Section 19 Business Combinations and Goodwill without mark-up

Invitation to comment

The MASB welcomes any interested party to submit comments on questions raised in the Exposure Draft by the closing date of 8 February 2023, via email to: technical@masb.org.my.

Click here to submit your comments.