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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