TFRS for SMEs

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

Revenue

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.

Reference: www.fap.or.th

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