IFRS for SMEs / IFRS for SMEs third edition: what changes for small companies
IFRS for SMEs third edition: what changes for small companies
When it applies
The third edition was issued in February 2025 and applies to annual periods beginning on or after 1 January 2027. For a February year end that means the year ending 29 February 2028. Earlier application is permitted, and the basis of preparation must then say so (A1).
Changes that affect most compilations
- Revenue: a five-step model based on performance obligations (Section 23), with disaggregated revenue (23.82) and contract balances (23.83).
- Receivables: an ageing analysis by due date (11.43).
- Borrowings: a maturity analysis of undiscounted contractual cash flows (11.43A) and a reconciliation of liabilities arising from financing activities (7.19A).
- Accounting policies: material accounting policy information rather than significant accounting policies (3.17(e); 8.5).
- Dividends declared after the reporting date are disclosed (6.6).
- Fair value: a new Section 12 on fair value measurement.
- Tax: uncertainty over income tax treatments (29.34A–29.34D).
Preparing for the change
Capture the receivables ageing and the loan maturities during the year rather than at year end, review revenue contracts that contain more than one obligation, and confirm whether the company has supplier finance arrangements or uncertain tax treatments.
Section by section
- Section 2 in the third edition: concepts and pervasive principles
- Section 3 in the third edition: material accounting policy information
- Section 4 in the third edition: disaggregating line items
- Section 6 in the third edition: dividends declared after year end
- Section 7 in the third edition: financing liabilities and supplier finance
- Section 8 in the third edition: material policies and judgements
- Section 11 in the third edition: one section for financial instruments, ageing and maturity
- Section 12 in the third edition: the new fair value section
- Section 19 in the third edition: business combinations
- Section 23 in the third edition: the five-step revenue model
- Section 29 in the third edition: uncertain tax treatments
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