Section

Summary of potential alignment issue

S1—Section 2 Concepts and Pervasive Principles;

Whether to align to the updated Conceptual Framework

S2—Section 9 Consolidated and Separate Financial Statements;

·         Whether to align the definition of control, which is used as the basis for deciding which entities are included within consolidated accounts

·         Not to align with the requirement to measure an investment entity at fair value, rather than consolidate, as this is not likely to be relevant for SMEs.

S3—Section 11 Basic Financial Instruments and Section 12 Other Financial Instrument Issues;

·         Whether to supplement the list of basic financial instruments in the IFRS for SMEs with a principle, based on the requirements in IFRS 9 for classifying a financial instrument based on its contractual cash flows and the business model for managing the financial asset.

·         Whether the simplified approach (recognition of lifetime expected losses) for the recognition of impairment losses in IFRS 9 should be adopted in the IFRS for SMEs.

·         Whether Section 12 needs to include hedge accounting rules and if so whether they should remain unchanged, rather than align with IFRS 9.

·         Whether an option to apply the recognition and measurement requirements of IFRS 9 and the disclosures of IFRS for SMEs is needed based on whether entities use the current option.

·         Whether to align the treatment of financial guarantee contracts with the IFRS 9.

S4—Section 15 Investments in Joint Ventures;

Whether to align the definition of joint control with IFRS 11 but retain the current accounting requirements.

S5—Section 19 Business Combinations and Goodwill;

·         Whether to align Section 19 with IFRS 3 by introducing requirements for step acquisitions; recognising acquisition-related costs as an expense at acquisition; and requiring contingent consideration to be recognised at fair value unless undue cost or effort were involved.

·         Whether to align the definition of a business with IFRS 3 to improve clarity and consistency.

S6—Section 20 Leases;

Whether to apply a simplified version of the requirements of IFRS 16, to Section 20.

S7—Section 23 Revenue;

Which alternative to follow out of:

·         Alternative 1 – to modify Section 23 only to remove clear differences in outcome with IFRS 15.

·         Alternative 2 – fully rewrite Section 23 to reflect the principles and languages used in IFRS 15.

·         Alternative 3 – not to make amendments to Section 23 as part of this review.

And if changes are to be made how the transition should work.

S8—Section 28 Employee Benefits;

Whether to align with IAS 19 changes regarding the requirements for presenting actuarial gains and losses for defined benefit plans and to clarify the treatment of termination benefits.

S9—Multiple sections: fair value; and

Whether to align the definition of fair value and the related guidance, including illustrative examples, with that in IFRS 13 and to move the guidance into Section 2.

S10—Multiple sections: amendments to IFRS Standards and IFRIC Interpretations.

More minor suggested alignments.