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Compatibility Analysis IFRS for SMEs and the Council Directives


In November 2009, the European Commission asked EFRAG to provide it with advice detailing on exactly which points the IFRS for SMEs (International Financial Reporting Standard for Small and Medium-sized Entities) is incompatible with the EU Accounting Directives (78/660/EC and 83/349/EEC).

On 1 March 2010, EFRAG issued its draft advice for comments. The deadline for comments was 19 April 2010.

On 28 May 2010, EFRAG finalised its advice and submitted it to the European Commission.

EFRAG's advice consisted of:     
  • A letter to the European Commission specifying the requirements of the IFRS for SMEs that were assessed to be incompatible with the EU Accounting Directives. This letter also includes a description of the scope and limitations of the assessment. 
  • A feedback statement explaining EFRAG's reasons for not considering requirements identified by EFRAG's constituents to be incompatible with the EU Accounting Directives. 
  • A working paper including EFRAG's assessment of all the requirements of the IFRS for SMEs.  
It should be emphasised that the conclusions of the analysis are to be understood in the context of the limitations described in the Letter and that the Working Paper is an integral part of the analysis.
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