TFRS for SMEs requirements reduced

The FAP is aware that SMEs might incur additional costs upon the first-time adoption of TFRS for SMEs and the preparation of financial statements in accordance with these standards.

Keywords: Mazars, Thailand, Accounting, FAP, SMEs, TFRS, NPAEs, PAEs

7 November 2016

Therefore, a committee of the FAP has classified Non-Publicly Accountable Entities (“NPAEs”) into two types:

1. Complex NPAEs: for entities

  • which are a subsidiary, associate, or joint venture of Publicly Accountable Entities (“PAEs”) or;
  • that have their equity in PAEs as a subsidiary, associate, or joint venture of NPAEs or;
  • that have their equity in NPAEs as a subsidiary, associate, or joint venture of NPAEs.   

2. Non-complex NPAEs

The committee passed a resolution to allow the reduction of some TFRS requirements for SMEs upon first-time adoption, as follows:

Year of adoption NPAEs Notes
Complex Non-complex
2017 21 chapters 18 chapters The chapters containing differences between Complex NPAEs and Non-complex NPAEs are Chapters 26, 27, and 31. In addition, the reduction of some part of Chapter 23 “Revenue” is allowed.
2019 10 chapters 3 chapters  
2022 4 chapters -  
Guidelines promulgated
 by the FAP
- 10 Chapters 11, 12, 20, 22, 26, 27, 29, 30, 33, and 34
No guidance - 4 Chapters 9, 14, 15, and 31

The table below summarizes the reduction allowed for the first-time adoption of TFRS for SMES by Complex NPAEs and Non-complex NPAEs:

Chapter Topics Year of adoption Notes
Complex Non-complex
1 Small and Medium Sized Entities 2017 2017  
2 Concepts and Pervasive Principles 2017 2017  
3 Financial Statement Presentation 2017 2017 To extend the period of the presentation of the Statement of Comprehensive Income and Statement of Cash Flows to these standards to 2019.
4 Statement of Financial Position 2017 2017

(a)   To extend the separate presentation of the initial recognition at cost or the fair value of investment property to 2019.  

     However, the separate disclosure of the initial recognition of investment property in the notes to the financial statements is still required.

(b)   The entity is able to present transactions, such as surplus on the revaluation of property, plant and equipment, or unrealized gains (losses) for available-for-sale investments, or gains (losses) on the revaluation of an actuarial loss on employee benefit obligations, and surplus on share-based payment included in other comprehensive income, and to disclose such transactions in the notes to the financial statements. 

5 Statement of Comprehensive Income and Income Statement 2017 2017 Please see the notes on Chapter 4 above.
6 Statement of Changes in Equity and Statement of Income and Retained Earnings 2017 2017

(a)  Please see the notes on Chapter 4 above.

(b)  To extend the presentation of the Statement of Income and Retained Earnings to 2019

7 Statement of Cash Flows 2019 2019  
8 Notes to the Financial Statements 2017 2017  
9 Consolidated and Separate Financial Statements 2019 Exceptions  
10 Accounting Policies, Estimates, and Errors 2017 2017  
11 Basic Financial Instruments 2022 Exceptions  
12 Other Financial Instruments Issues 2022 Exceptions  
13 Inventories 2017 2017  
14 Investments in Associates 2019 Exceptions  
15 Investments in Joint Ventures 2019 Exceptions  
16 Investment Property 2017 2017  
17 Property, Plant, and Equipment 2017 2017  
18 Intangible Assets other than Goodwill 2017 2017 Guidance on this will be issued, and options will be provided for development costs that are recognized as assets.
19 Business Combinations and Goodwill 2019 2019  
20 Leases 2019 Exceptions The only exception will be IFRIC 4 relating to determining whether an arrangement contains a lease for Non-complex NPAEs.
21 Provisions and Contingencies: Appendix to section 21 – guidance on recognizing and measuring provision 2017 2017  
21 Provisions and Contingencies: Appendix to section 21 – guidance on recognizing and measuring provision 2017 2017  
22 Liabilities and Equity: Appendix to section 22 – example of the issuers accounting for convertible debt 2022 Exceptions  
23 Revenue: Appendix to section 23 – examples of revenue recognition under the principals in section 23      
  Recognition of revenue from sales and services 2017 2017  
  Recognition revenue from the sale of real estate when transferring of property 2019 2019 To extend the recognition of revenue from the sale of real estate when transferring property to 2019
  IFRIC 13 “Customer loyalty programmes” 2019 Exceptions FAP will issue guidance on customer loyalty programmes for Non-complex NPAEs.
24 Government Grants 2017 2017  
25 Borrowing Costs 2017 2017 Guidance on this will be issued, and there will be option for borrowing costs that are directly attributable to the acquisition, construction, or production of a qualifying asset as part of the cost of that asset.
26 Share-based Payment 2017 Exceptions  
27 Impairment of Assets 2017 Exceptions For Non-complex NPAEs, an assessment of value in use is not required. 
28 Employee Benefits 2019 2019  
29 Income Tax 2019 Exceptions  
30 Foreign Currency Translation 2022 Exceptions For Non-complex NPAEs, the only exception is for a functional currency.
31 Hyperinflation 2017 Exceptions  
32 Events after the End of the Reporting Period 2017 2017  
33 Related Party Disclosures 2019 Exceptions  
34 Specialized Activities 2019 Exceptions

(a)  There is an exception only for biological assets for Non-complex NPAEs.  

(b)  To extend the exploration for and evaluation of mineral resources to 2019

35 Transition to IFRS for SMEs 2017 2017  

For more information, please visit the Fedration of Accounting Professions website.  

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