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 | - | 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.
Want to know more?
