31/01/2012 | EFRAG's comment letter in response to the 4th batch of IFRS for SMEs draft Q&As

EFRAG has issued its comment letter in response to the fourth batch of draft Q&As related to the IFRS for SMEs. The comment letter can be downloaded here.
	The IFRS Foundation’s SME Implementation Group, which assists the IASB in supporting the implementation of the IFRS for SMEs, published on 21 November 2011 two draft Q&As for public comment. The first draft Q&A Fallback to IFRS 9 Financial Instruments considers whether an entity can apply the recognition and measurement provisions of IFRS 9 Financial Instruments. It is stated in the draft response that the IFRS for SMEs specifically allows an entity to apply the recognition and measurement criteria of IAS 39. As the standard does not allow entities to apply the recognition and measurement requirements of IFRS 9, entities are not permitted to apply the requirements of IFRS 9 instead of the requirements included in section 11 and 12 of the IFRS for SMEs. EFRAG agrees with the answer provided in this draft Q&A and thinks the Q&A should be issued. The second draft Q&A Recycling of cumulative exchange differences on disposal of a subsidiary includes a response to the question whether cumulative exchange differences that arise on translation into a presentation currency are prohibited from being recognised in profit or loss on disposal of the subsidiary. The paragraphs in the IFRS for SMEs dealing with translation to the presentation currency are silent on this issue. It is stated in the draft response that a paragraph in the section on consolidation and separate financial statements deals with the issue and prohibits recycling of the mentioned differences. EFRAG agrees with the answer provided in this draft Q&A, but does not think the Q&A should be issued.
Document : EFRAG_comment_letter_batch_4.pdf
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