EXHIBIT 2
CONSEJO MEXICANO PARA LA INVESTIGACIÓN Y DESARROLLO DE
NORMAS DE INFORMACIÓN FINANCIERA (CINIF)
COMMENTS FROM CINIF TO SECTIONS 1 – 38 IN IASB EXPOSURE DRAFT
OF IFRS FOR SMEs
1. We strongly believe that there should be just one set of accounting standards
applicable to all entities; the effort to reduce the accounting burden to Small and
Medium-size (SMEs) entities should be oriented and restricted to reduce as much as
possible the disclosure requirements included in IASs and IFRSs applicable to such
entities instead of creating a new set of accounting standards that may provoke
confusion and will certainly require of great efforts in accounting education and
training. These task and goal could be accomplished by amending the disclosure
requirements in every IFRS and IFRIC. Additionally, we are convinced that
whenever an SME does not have a situation that is contemplated by one or more
IASs, IFRSs and/or IFRICs then the accounting rules contained therein
automatically become not applicable by such SME.
2. If notwithstanding our opposition the Exposure Draft (ED) of the proposed IFRS
for Small and Medium-sized Entities (IFRS for SMEs) continues its process
towards adoption by IASB we present in the following paragraphs our comments
related to Sections 1 through 38 of such ED with the purpose that such comments be
considered when preparing the final IFRS for SMEs.
Sections 1 Scope and 2 Concepts and Pervasive Principles
1. Even and when there is a great clamour for less complicated accounting rules and
requirements for the presentation of the financial statements, mainly in countries
similar to Mexico were there is a very reduced number of publicly accountable
entities and in which a very large majority of entities are SMEs with a very limited
distribution of their financial statements, we consider that having different sets of
accounting standards may be justified only when the economic transactions and
events incurred by SMEs and larger entities are different. We suggest that this
condition be included in Section 1 Scope of the project.
2. A number of SMEs acquire assets and commitments that must be periodically valued
at their market values as it is the case of business acquisitions, financial instruments
and other obligations such as pension plans and retirement funds for employees which
must be analyzed and understood at the light of the market prices or actual value and
not only as it is the proposal in the project based on cost of acquisition or by means of
simplified and therefore less quality valuation methods and procedures.
1
3. Many transactions entered by SMEs are hedging operations and exempting or
simplifying the valuation processes to be followed by non-publicly accountable
entities would mean not a step forward but backwards.
4. It is necessary to point out that at least in Mexico there are publicly accountable
entities (entities that have public accountability and publish general purpose
financial statements for external users) with transactions much less complicated
than those being made by numerous entities that would be considered SMEs based on
the definition in paragraph 1.1 of IFRSs for SMEs. However, these circumstances
have not lead the Mexican accounting standards setting body to issue easier standards
for general application.
5. Two different sets of accounting standards require two different education and
training efforts and produce as a consequence two different sets of accounting
knowledge and expertise and as a result in the future different categories of
professionals could exist: one with knowledge and qualifications for applying the
accounting set for publicly accountable entities and another of less level qualified to
apply the accounting rules for SMEs.
6. If in despite of what is stated in the preceding paragraphs the project is approved and
issued we suggest to expand Section 1 in order to require that entities qualifying as
SMEs shall follow full IFRSs:
a) When the entity is of high interest for the country or economic community
in which she operates and there is a number of users of its financial
information;
b) Due to the nature of its operations the entity is deemed to have a high
social responsibility with its community; and
c) When the majority or a substantial portion of its owners depend on
financial information for external use which must be comparable with
similar information from publicly accountable entities.
Section 3 Financial Statement Presentation
1. The last paragraph of paragraph 3.1 states “The additional disclosures referred to
in (a) are necessary when compliance with the specific requirements in this
(draft) standard is insufficient to enable users to understand the effect of
particular transactions, other events and conditions on the entity’s financial
position and financial performance.” To avoid confusion a clear explanation
including examples of insufficient should be included in paragraph 3.1.
2
2. Materiality is mentioned in paragraphs 3.13 and 3.14. A cross reference to paragraph
2.4 of Section 2 Concepts and Pervasive Principles would be useful.
3. Paragraph 16 of IAS 1 states: “Inappropriate accounting policies are not rectified
either by disclosure of the accounting policies used or by notes or explanatory
material.” A similar paragraph should be included in Chapter Compliance with the
IFRS for SMEs.
Section 4 Balance Sheet – Information to be presented on the face of the balance sheet
1. Since the Implementation Guidance includes Illustrative Financial Statements,
paragraph 4.4 should be eliminated because it is contradicted by the examples.
2. The examples in the Implementation Guidance should be presented as similar as
possible to those in IAS 1.
3. It is important that all Sections, paragraphs and examples related to financial
statements be updated in accordance with the new IAS 1.
4. Paragraph 4.13 (iv) requires a reconciliation of the number of shares outstanding
both at the beginning and at the end of the period. The removal of this requirement
should be considered since paragraph 1.1 of Section 1 Scope establishes that IFRSs
for SMEs is to be applied by entities that do not have public accountability. Thus,
the preparation of the required reconciliation should not be required from SMEs.
5. Section 21 Equity of the Implementation Guidance states “No disclosures required
by this Section (but see paragraph 4.13)”. This paragraph should be removed from
the Implementation Guidance since it contradicts paragraph 4.13 or amended to
indicate that disclosures on equity are required in paragraph 4.13 of the
Implementation Guidance.
6. Paragraph 52 of IAS 1 states: “Whichever method of presentation is adopted, for
each asset and liability line item that combines amounts expected to be
recovered or settled (a) no more than twelve months after the balance sheet date
and (b) more than twelve months after the balance sheet date, an entity shall
disclose the amount expected to be recovered or settled after more than twelve
months.” This paragraph should be incorporated to the IFRSs for SMEs.
Section 5 Income Statement
This Section should be reviewed to conform it to the new IAS 1.
Section 6 Statement of Changes in Equity and Statement of Income and Retained
Earnings
This Section should be reviewed to conform it to the new IAS 1.
3
Section 7 Cash Flow Statement
This Section should be reviewed to conform it to the new IAS 1.
Section 8 Notes to the Financial Statements
This Section should be reviewed to conform it to the new IAS 1.
Section 9 Consolidated and Separate Financial Statements
1. Separate financial statements
a) Paragraph 9.18 states: “When separate financial statements of a parent
are prepared, the entity shall adopt a policy of accounting for all of its
investments in subsidiaries, jointly controlled entities and associates that
are not classified as held for sales either: (a) at cost, or (b) at fair value
through profit and loss.” Paragraph 32 of IAS 27 requires that such
investments should be accounted for “…either: (a) at cost, or (b) in
accordance with IAS 39.” The wording of paragraph 9.18 in IFRS for SMEs
should conform to the text in paragraph 32 in IAS 27. As paragraph 9.18 is
written it may be interpreted that it implies that the valuation methods in IAS
39 are similar to fair value which is not entirely correct.
b) We suggest that the same valuation method be adopted for all kinds of
investments made by SMEs and strongly recommend that the equity method
is adopted as the only method acceptable for valuing permanent investments.
2. Non consolidation of financial statements
All of subparagraph (a) of paragraph 10 of IAS 27 should replace subparagraph (a) of
paragraph 9.2 of the project of IFRS for SMEs. We consider that even in SMEs the not
presentation by the parent of consolidated financial statements requires approval from all
the owners or at least a legal majority of them.
3. Combined financial statements
IAS 27 does not refer to combined financial statements. However, we concur with
paragraphs 9.21 and 9.22 of the project IFRS for SMEs and specifically with the
statement indicating that the presentation of combined financial statements is not
required. Also, we recommend that paragraphs 9.21 and 9.22 of IFRS for SMEs be
included in IAS 27.
4
Section 10 Accounting Policies, Estimates and Errors
1. Paragraph 10.4 should be removed. Guidance in paragraph 10.2 is sufficient and
clear. The guidance in paragraph 10.4 will provoke confusion and lack of
comparability among SMEs and also with publicly accountable entities.
2. To strengthen the idea of having an independent and autonomous set of accounting
standards for SMEs, cross references to full IFRSs should not be made. To
accomplish this, subparagraph (b) of paragraph 10.9 should be entirely deleted.
3. Paragraph 4 of IAS 8 should be included in Section 10 of the IFRS for SMEs
requiring entities to recognize and disclose the tax effects of corrections of prior
period errors and of retrospective adjustments made to apply changes in accounting
policies; cross reference should be made to Section 28 Income Taxes.
4. The chapter Corrections of prior period errors should clearly state that the adoption
by an entity of an IFRS for SMEs that should have been adopted in prior periods is
the correction of an error and not a change in an accounting policy.
Section 11 Financial Assets and Financial Liabilities
1. Section 11 pretends to reduce for SMEs the complexity of the standards on financial
instruments but in fact it is just a summary of most of the rules included in IFRS 39.
It should be considered that entities operating with financial instruments are basically
those that usually have a sophisticated treasury advocated to obtain for the entity the
best possible benefit from any cash excess and to protect the entity’s results against
different risks by using derivative financial instruments and hedge accounting,
regardless of the volume of the entity’s operations and whether or not the entity has
public accountability.
2. All entities including SMEs operating with financial instruments and using hedge
accounting should have a complete and clear knowledge of such instruments and the
corresponding accounting standards. We consider that reducing the accounting
standards on financial instruments and hedge accounting for SMEs is not necessary
and will provoke confusion and lack of comparability among entities applying full
IFRSs and those using IFRS for SMEs.
3. SMEs should not be allowed to choose among application of the accounting rules in
Section 11 and IAS 39, thus paragraph 11.1 should be amended requiring SMEs the
application of IAS 39. However, if cross reference is made to IASs and IFRSs the
IFRS for SMEs cannot be considered to be an autonomous and independent
document from full IFRSs.
4. In order to have simpler accounting standards and disclosure requirements for SMEs
it would be necessary to clearly state in Section 11 of the IFRS for SMEs as a basic
principle that all financial instruments must be recognized at reasonable value and
5
that any and all fluctuations in this value must be recognized directly in the results
for the period, except when a reasonable value cannot be determined in which case a
valuation technique should be used.
5. If accounting standards on financial instruments and hedge accounting are
considered to be very complex consideration by IASB should be given to simplify
the IASs and IFRSs effective to date.(IFRS 7, IAS 32 and IAS 39).
Section 12 Inventories
We concur with this section and have no comments.
Section 13 Investments in Associates
1. Paragraph 13.3 permits investors to account for their investments in associates using
one of the cost model method, the equity method or the fair value through profit or
loss model. In addition paragraph 14.8 (c) of Section 14 Investments in Joint
Ventures permits the proportionate consolidation for valuing interests in all jointly
controlled entities. The acceptance of different methods will provoke a lack of
comparability among the financial information of different associates.
2. Section 13 does not prohibits to associates integrants of one consolidated group the
use of different methods of accounting. The use of the same accounting method by
associates integrants of one group of consolidated financial statements should be
required by Section 13.
3. The equity method should be considered as the only method accepted for the
accounting of investments in associates.
4. The rules for accounting for Investments in Associates using the equity method are
not included in this Section; for this purpose paragraph 13.5 indicates that the rules
in IAS 28 Investments in Associates must be applied. Making cross-references to
full IFRSs is contradictory if IFRS for SMEs are to be independent and
autonomous.
Section 14 Investments in Joint Ventures
1. For purposes of accounting for Joint Ventures, paragraph 14.8 permits venturers to
select one method from the cost model, the equity method, the proportionate
consolidation method and the fair value through profit or loss method. The
acceptance of different methods will provoke a lack of comparability of the financial
information of different Joint Ventures.
2. Section 14 does not prohibit to joint ventures integrants of one consolidated group
the use of different methods of accounting. The use of the same accounting method
6
by integrants of the same consolidated financial statements should be required by
Section 14.
3. The rules for valuing and disclosing investments in Joint Ventures using the equity
method are not included in this Section; for this purpose paragraph 14.10 indicates
that the rules in IAS 28 Investments in Associates must be applied. Making crossreferences to full IFRSs is contradictory if IFRS for SMEs are to be independent
and autonomous.
4. The equity method should be the only method accepted for the accounting of Joint
Ventures.
Section 15 Investment Property
1. Paragraph 15.4 states that all Investment Property shall be measured using either the
fair value model or the cost model. The acceptance of different methods may
provoke a lack of comparability of the financial information of different entities
2. Section 15 does not prohibits to integrants of one consolidated group the use of
different methods of accounting. The use of the same accounting method by
associates integrants of one group of consolidated financial statements should be
required by Section 15.
3. An entity that elects to use the fair value model shall apply IAS 40 Investment
Property. Making cross-references to full IFRSs is contradictory if IFRS for SMEs
are to be independent and autonomous
Section 16 Property, Plant and Equipment
1. If an entity elects to use the revaluation model for a class of items of property, plant
and equipment paragraph 16.13 requires such entity to apply paragraphs 31-42 of
IAS 16 Property, Plant and Equipment and make the disclosures required by
paragraph 77 of IAS 16. Making cross-references to full IFRSs is contradictory if
IFRS for SMEs are to be independent and autonomous.
Section 17 Intangible Assets other than Goodwill
1. Paragraph 17.5 should be amended to incorporate the valuation of future economic
benefits of intangible assets. This amendment will make Section 17 similar to
paragraph 25 of IAS 35 Intangible Assets.
2. Paragraph 17.14 requires entities to choose either the expense model or the
capitalization model. IFRS for SMEs should not contain alternatives. The standards
on intangible assets in Section 17 should be as those included in IAS 38.
7
Section 18 Business Combinations and Goodwill
Goodwill
1. We have no comments.
Section 19 Leases
1. Paragraph 2 of IAS 17, Leases states that it shall be applied in accounting for all
leases other than by biological assets held by lessees under finance leases and
biological assets provided by lessors under operating leases which are treated in
IAS 41, Agriculture. These exceptions are not included in Section 19 of the IFRS
for SMEs.
2. In Section 19 of IFRS for SMEs cross-reference should be made to Section 35
Specialised Industries in which, in general terms the requirements in IAS 17 for
agricultural activity are included.
3. Section 19 should be amended to incorporate paragraphs 14-18 of IAS 17 that
establish the treatment of leases of land and buildings as operating or finance leases
in the same way as leases of other assets; however, it requires than when title of land
is not expected to pass to the lessee by the end of the lease term, the lease of land be
considered as an operating lease. Section 19 of IFRS for SMEs does not cover this
subject.
4. Due to its nature financial leases imply a financial cost that may be determined only
by computing the present value of the minimum lease payments. This subject is
covered by paragraphs 20-24 of IAS 17 Leases; however, paragraph 19.8 of Section
19 of IFRS for SMEs only contemplates the determination of the fair value of the
leased property. Paragraphs 20-24 of IAS 17 Leases should be incorporated to
Section 19 of IFRS for SMEs.
Section 20 Provisions and Contingencies
1. Notwithstanding that insurance entities are considered to have public accountability
and as such are not intended to use IFRS for SMEs it will be beneficial to explicitly
exclude them.
2. All provisions, contingent liabilities and contingent assets arising in insurance
entities from contracts with policy holders should be exempted from applying
Section 20, as it is done in paragraphs IN1 (c) and 1 (e) of IAS 37 Provisions,
Contingent Liabilities and Contingent Assets.
3. The disclosure rules about provisions included in Section 20 of IFRS for SMEs are
the same of IAS 37. If an objective of IFRS for SMEs is the simplification of the
accounting rules to be applied by SMEs the disclosure requirements for these
8
entities should be reduced. As an example, subparagraphs (b)-(e) of paragraph 20.14
could be eliminated.
Appendix to Section 20
1. Definitions of onerous contracts and restructuring are included in Examples 2 and
3, respectively. Such definitions should be included in the text of Section 20.
2. Basically the examples included in Appendix to Section 20 are the same as those
presented in Appendix C and Appendix D of IAS 37. However, not all of the
examples included in these appendixes are presented in Appendix to Section 20
notwithstanding that some of them present situations that may be found in SMEs
such as those in Example 9 A single guarantee and in Example 11 Repairs and
maintenance. We consider that such examples should be included in Appendix to
Section 20.
Section 21 Equity
1. We have no comment on Section 21. However, we believe that IASB should prepare
and issue an IFRS on Equity.
Section 22 Revenue
1. Paragraphs 18 and 19 of IAS 18 Revenue are also important to SMEs and should be
included in Section 22 of IFRS for SMEs.
2. Paragraphs 31, 32 and 33 of IAS 18 should be incorporated to Section 22 of IFRS
for SMEs because they are as important to SMEs as they are to entities with public
accountability and publish general purpose financial statements for external
users.
3. The contents of the paragraphs in the Section Construction Contracts of the IFRS
for SMEs is so summarized that SMEs engaged in the construction industry will
have to continuously consult the explanation paragraphs and examples included in
IAS 11 Construction Contracts.
4. If the incorporation of the paragraphs suggested above in 1. and 2.is made IFRS for
SMEs may not be claimed to be an independent an autonomous document.
Section 23 Government Grants
1. This Section is a summary of IAS 20 Accounting for Government Grants and
Disclosure of Government Assistance.
2. Paragraph 23.3 subparagraph (b) of Section 23 requires that and entity accounts for
its government grants using the IFRS for SMEs model in paragraph 23.4 for those
9
government grants related to assets measured at fair value through profit or loss and
IAS 20 Accounting for Government Grants and Disclosure of Government
Assistance for all other grants. This cross-reference is because Section 23 omits the
description of different methods of accounting for government grants, the transfers
of non monetary assets and their presentation. SMEs with this kind of transactions
will have to consult and apply IAS 20 in order to properly recognize and present
government grants. Due to this situation the IFRS for SMEs cannot be considered
as an independent and autonomous set of accounting rules.
Section 24 Borrowing Costs
1. Paragraph 24.2 of this Section requires an entity to account for all of its borrowing
costs using either the expense model in paragraph 24.3 or the capitalization model in
paragraph 24.4. Paragraph 11 of IAS 23 Borrowing Costs requires that borrowing
costs directly attributable to the acquisition, construction or production of a
qualifying asset be capitalized as part of the cost of that asset. We believe that the
rule in IAS 23 should be also applicable to SMEs.
2. Paragraph 24.4 requires that an entity that elects to use the capitalization model shall
apply IAS 23 which provokes a lack of comparability of the financial information
issued by SMEs and the entities that have public accountability and publish
general purpose financial statements for external users.
3. Due to the cross-reference to IAS 23 the IFRS for SMEs cannot be considered as an
independent and autonomous set of accounting rules.
Section 25 Share-based payment
1. To have an autonomous and independent set of accounting rules for SMEs all rules
in IFRS 2 Share-based Payment should be included in Section 25, instead of just
making reference to IFRS 2. (See our comment in Section 27)
Section 26 Impairment of Non-Financial Assets
1. Regarding the impairment of non-financial assets and inventories (paragraphs 26.526.24) Section 26 does not considers the concept of value in use for assessing
whether there is indication that an asset may be impaired. Value in use is considered
by IAS 36.
2. By not considering value in use in the computation of impairment this calculation is
simplified. However, in our view this approach is not the most proper since the
greatest difficult in computing impairment of a non-financial asset or an inventory is
the determination of the market value (selling prices) of used assets or specifically
manufactured to the entity.
10
3. The exclusion of value in use in the computation of impairment and the hierarchy
list of reliability of evidence in paragraph 26.10 will exempt many SMEs of
recognising impairment as it is required by IFRS 36 from entities that have public
accountability and publish general purpose financial statements for external users.
4. Paragraph 26.6 of IFRS for SMEs is a copy of paragraph 12 of IAS 36.
Subparagraph (c) of paragraph 26.6 must be amended to eliminate from it the
reference to value in use which we believe is an error since as mentioned in
paragraph 1. above, it is not considered in Section 26
Section 27 Employee Benefits
1. Paragraph 27.2 states that employee benefits include share-based payments and
also that an entity shall apply Section 25 Share-based Payments in accounting for
share based payments. As mentioned in our comment in Section 25 to have an
autonomous and independent set of accounting rules for SMEs all rules in IFRS 2
Share-based Payment should be included in Section 25. If this incorporation is not
made IFRS for SMEs could not be claimed to be an independent an autonomous
document since it will be necessary to consult the rules in IFRS 2 .
2. Section 27 is oriented to discuss the rules related to the actuarial computations
necessary to determine the liabilities and costs of employees’ benefits. However,
Section 27 does not include accounting rules sufficient to recognize the effects of
such liabilities and costs making it necessary for SMEs to use IAS 19 Employee
Benefits which impedes considering IFRS for SMEs as an independent and
autonomous document.
Section 28 Income Taxes
1. Paragraph 28.16 (c) subparagraphs (i) and (ii) require than an entity shall recognize
a deferred tax asset for differences between amounts that an entity initially
recognizes as the cost or other carrying amounts of an asset or liability and the
amounts relating to that asset or liability that are expected to be deductible or
includible in taxable income in future periods. This requirement is contrary to the
rules in paragraphs 15 (b) (ii), 22 (c), 24 (b) and 33 of IAS 12. These paragraphs
permit but do not require the recognition of deferred assets and liabilities when the
initial recognition of assets or liabilities has no effect on accounting nor on taxable
profit (tax loss), and even if temporary differences are generated.
2. The difference between paragraph 28.16 of IFRS for SMEs and the paragraphs of
IAS 12 mentioned in 1. above seems to have been solved in the last sentence of
paragraph 28.17 of IFRS for SMEs that states: “Outside a business combination, an
entity shall recognize, as an adjustment to the deferred tax balance, any difference
between (a) the sum of the carrying amount of the asset or liability and the resulting
deferred tax balance and (b) the amount paid or received.” Notwithstanding this
11
solution, we believe that the text in IAS 12 is clearer and easier to understand than
the text in Section 28.
3. The word “probable” is used in paragraph 28.18 and is defined in the Glossary of
the IFRS for SMEs as “More likely than not.” Considering that estimating the
probability that sufficient taxable profit will be available to allow recovery of the
deferred assets is very complex we believe it is necessary that the IFRS for SMEs
includes paragraphs explaining with sufficient detail the concept of “probable” in
the same manner as it is done in paragraphs 28-37 of IAS 12 Income Taxes.
4. Subparagraph (b) of paragraph 28.18 of IFRS for SMEs states: “An entity shall not
recognize deferred tax expense (income) or a related deferred tax liability (asset)
for temporary differences associated with unremitted earnings from foreign
subsidiaries, branches and associates and joint ventures, unless it is probable that
the temporary difference will reverse in the foreseeable future.” The essence of
this rule is similar to the rules in paragraphs 39 and 44 of IAS 12; however,
paragraph 28.18 of IFRS for SMEs exempts from recognition as deferred tax
expense (income) or as deferred tax liability (asset) only the temporary differences
related to foreign investments or operations whereas the exemption in rules in
paragraphs 39 and 44 of IAS 12 does not discriminate between national and foreign
investments. Thus the rules in IAS 12 related to the recognition of deferred tax
assets and liabilities associated with investments in subsidiaries, branches and
associates and joint ventures are applicable to all entities whether nationals or
foreign. We consider that there is no justified reason to have in this case a rule for
SMEs different from the rules established in IAS 12.
5. Clause (ii) of subparagraph (c) of paragraph 81 of IAS 12 requires that it shall be
disclosed separately “ a numerical reconciliation between the average effective tax
rate and the applicable tax rate, disclosing also the basis on which the applicable
tax rate is computed.” We recommend that this clause be included as subparagraph
5. in Section 28 of IFRS for SMEs because the information required is valuable
information for the users of the financial information of non-publicly accountable
entities as it is for the users of financial information of publicly accountable entities.
Section 29 Financial Reporting in Hyperinflationary Economies
1. This Section includes a definition of hyperinflation and a brief summary of IAS 29
Financial Reporting in Hyperinflationary Economies. Section 29 requires that an
entity whose functional currency is the currency of a hyperinflationary economy
shall apply IAS 29 in preparing and presenting its financial statements. This
situation does not permit considering IFRS for SMEs as an independent and
autonomous document.
2. Paragraph BC.58 of Basis for Conclusions on Exposure Draft states: “…The draft
IFRS for SMEs does not include requirements on reporting in hyperinflationary
12
economies because it is uncommon for SMEs to have a hyperinflationary
functional currency.” This statement is an error and should be corrected: in
economies with hyperinflationary economies SMEs operate with hyperinflationary
currencies which are almost always the national currency of the country in which
they are located and operate.
Section 30 Foreign Currency Translation
1. We have no comments. We are in agreement with Section 30.
Section 31 Segment Reporting
1. We have no comments. We concur with paragraph 31.1
Section 32 Events after the End of the Reporting Period
1. Information on the entity’s going concern is fundamental for the users of the
financial statements. Section 32 does not cover this subject. For this reason we
believe that paragraphs 14-16 of IAS 10 should be included in Section 32.
Section 33 Related Party Disclosures
1. The required disclosures in paragraph 33.6 and subparagraph (f) of paragraph 33.9
of Section 33 seem to be excessive for an SME.
Section 34 Earnings per Share
1. We have no comments. We concur with paragraph 34.
Section 35 Specialised Industries
1. Regarding extractive Industries paragraph 35.2 requires that exploration
expenditure be recognised as an expense in the period in which it is incurred. We
believe it is important for SMEs that Section 35 of IFRS for SMEs be amended to
permit the capitalization of exploration expenditure by adopting the same treatment
permitted to publicly accountable entities in IFRS 6 Exploration for and
Evaluation of Mineral Resources.
Section 36 Discontinued Operations and Assets Held for Sale
1. In order to promote comparability of the financial information issued by entities
with and without public accountability and publishing general purpose financial
statements for external users the paragraphs 35 and 36 of IFRS 5 Non-current
Assets Held for Sale and Discontinued Operations should be incorporated in IFRS
for SMEs.
13
2. Notwithstanding that the incorporation to Section 36 of paragraphs 16-29 of IFRS 5
is not essential it would be helpful for SMEs.
Section 37 Interim Financial Reporting
1. We have no comments. We concur with paragraphs 37.1 and 37.2. However, the
references in these paragraphs to IAS 34 Interim Financial Reporting do not permit
considering IFRS for SMEs as an independent and autonomous document.
Section 38 Transition to the IFRS for SMEs
1. We have no comments. We concur with Section 38.
14