Currently, the Federation of Accounting Professions (“FAP”) is in the process of translating and publishing new accounting standards for small and medium-sized entities which are based on IFRS for SMES, as amended in 2015.

Keywords: Mazars, Thailand, Accounting, TFRS for SMEs, FAP, IFRS for SMEs, TFRS for NPAEs, PAEs, Thai GAAP

06 July 2016

These standards are also called “TFRS for SMEs”, and most of these standards will become effective on 1 January 2017, while the remainder will be applied in 2019 and 2022.

In June 2016, the FAP published a newsletter on this subject, which contained information on the TFRS for SMES:

A. TFRS for SMEs consists of 35 chapters, as follows:

Chapter Topics
1 Small- and Medium-sized Entities
2 Concepts and Pervasive Principles
3 Financial Statement Presentation
4 Statement of Financial Position
5 Statement of Comprehensive Income and Income Statement
6 Statement of Changes in Equity and Statement of Income and Retained Earnings
7 Statement of Cash Flows
8 Notes to the Financial Statements
9 Consolidated and Separate Financial Statements
10 Accounting Policies, Estimates and Errors
11 Basic Financial Instruments
12 Other Financial Instruments Issues
13 Inventories
14 Investments in Associates
15 Investments in Joint Ventures
16 Investment Property
17 Property, Plant and Equipment
18 Intangible Assets other than Goodwill
19 Business Combinations and Goodwill
20 Leases
21 Provisions and Contingencies
22 Liabilities and Equity
23 Revenue
24 Government Grants
25 Borrowing Costs
26 Share-based Payment
27 Impairment of Assets
28 Employee Benefits
29 Income Tax
30 Foreign Currency Translation
31 Hyperinflation
32 Events after the End of the Reporting Period
33 Related Party Disclosures
34 Specialized Activities
35 Transition to the IFRS for SMEs

B. A committee of the FAP has classified Non-Publicly Accountable Entities (“NPAEs”) into two types:

1. Complex NPAEs:

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

These entities have to adopt and apply the full set of TFRS for SMEs, except for some complex chapters, in which case FAP will give the entity 2 to 5 years to adopt them fully. Extensions will be given as set out below for full adoption of TFRS for SMES for the following groups of chapters:

Group Chapter/Topic Extension period
1 Statement of Cash Flows Two years – these standards will be effective in 2019
Consolidated and Separate Financial Statements
Investments in Associates
Investments in Joint Ventures
Business Combinations and Goodwill
Related Party Disclosures
2 Basic Financial Instruments Two years – these standards will be effective in 2022
Other Financial Instruments Issues
Liabilities and Equity
Foreign Currency Translation
3 Leases Two years – these standards will be effective in 2019
4 Income Tax Two years – these standards will be effective in 2019
Specialized Activities

2. Non-complex NPAEs –these entities will adopt only part of TFRS for SMEs.

We understand that a committee of FAP is aware of additional costs that SMEs might incur upon first adoption of TFRS for SMEs and the preparation of financial statements in accordance with these standards. This is why the extension period for some complex standards has been given, as noted above.

However, SMEs and Thai accountants should be aware of and recognize the GAAP differences between TFRS for NPAEs and TFRS for SMEs, and be ready to prepare financial statements accordingly on 1 January 2017.