Both the IASB and the UN are working on proposals to revamp small business reporting, and the early signs are not encouraging.

The IASB, according to Richard Murphy, the campaigner, wants to introduce fair value reporting for SMEs. This involves a continual reassessment of the value of assets and liabilities as they are at the date of the accounts, rather than at historical cost.

The standard being developed also require extensive notes, which small businesses will not like. Instead, Murphy prefers the simpler UN standard. The IASB, understandably perhaps, rejects the criticism.

Vice-chairman, Tom Jones, told Accountancy Age criticism was levelled by ‘pontificators’. ‘If the standards are too weak, they won’t be accepted. If they are too tough, they won’t be applied. So we’ve been careful to choose the middle ground,’ he said.

The board this week had a preliminary vote of confidence in its draft proposal, which has support across the board, Jones said. Certainly it is far shorter than full IFRS standards, but criticisms have not yet abated.

European Union commissioner for internal markets Charlie McCreevy has warned that the board’s proposed standards must be in keeping with EU guidelines. He said that only ‘simple, easy-to-apply standards will be acceptable’.

Those who did make submissions on the standards, wanted standards that were short and manageable to read; worded simply; based on IFRS framework; and which could be broadly adapted across a spectrum of companies - all of which Jones claims have been fulfilled. The only request, which he said cannot be included, is to provide standards which would also be tax-compliant.

The response, the IASB says, is an indication that many are looking forward to the final proposal so they can already begin to plan and move towards it practically. In the next few months, the final draft will come before the board for its final vote. The real test will be whether the final proposal is accepted in the industry.