Much of the debate about the IASB’s draft ‘IFRS for SMEs’ has been over its suitability – or unsuitability – for use by ‘micro’ companies around the world.

But could there be a place for the standard in the UK accounting framework, as part of the solution to the unresolved debate over the future of UK GAAP in the new international environment?

And, more controversially perhaps, might it in due course provide a replacement for the UK standard for smaller entities, the FRSSE?

Users of the FRSSE who read through the draft IFRS might note some familiar features. The IASB has gone a long way towards providing a ‘one stop shop’, a single standard similar in concept to the UK standard. The proposed international standard is structured by topic with a separate section on, for example, property, plant and equipment.

There is a considerable reduction in disclosure requirements, and some significant measurement simplifications. Overall, the IASB has reduced the volume of material in its full standards substantially whilst - crucially - not requiring a mandatory ‘fallback’ to full IFRS for transactions not dealt with in the SME version.

Many will, however, be unenthusiastic about the prospect of the SME IFRS replacing the FRSSE, at least without significant changes. Even the ‘typical’ 50 employee company alluded to in the draft standard found application of the requirements onerous, and may conclude that for the foreseeable future the FRSSE should be retained as part of a three tier solution to UK GAAP.

However, the ‘IFRS for SMEs’ – perhaps an unhelpful title if the standard is not suitable for most small companies – might still provide part of the solution to the ‘UK GAAP question’. It might provide a suitable replacement for GAAP for unlisted companies ineligible to use the FRSSE, either on a compulsory basis or perhaps as an option for private companies with an international outlook. The ASB could still keep the FRSSE simple – indeed, it should take the opportunity to review its current requirements with a view to turning back the tide of complexity that threatens to undermine its success.

This debate will rumble on for some time, but those wishing to influence it should get involved now.

Dr Nigel Sleigh-Johnson is head of financial reporting at the ICAEW