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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