PracticeAuditShowdown over standards for SMEs

Showdown over standards for SMEs

New standards for SMEs rejected earlier this month by EU commissioner Charlie McCreevy

Complex new standards for SMEs have become a game of political football for
the big accounting watchdogs.

The international wrangling means small businesses still don’t know how the
standards will look.

EU internal markets commissioner Charlie McCreevy effectively rejected the
IASB’s proposed standards for SMEs earlier this month.

Speaking at a public event in Lisbon on the simplification of the business
environment, McCreevy said that, despite the European Commission emphasising the
need for simplicity in small businesses standards, the proposals put forward by
the IASB did not meet this requirement.

‘The feedback we have received from member states, the European Parliament
and stakeholders is that the current IASB draft is not simple enough to be
applicable for the bulk of SMEs in the EU. At this stage, I do not intend to
propose that the IASB draft be endorsed for application in the EU,’ McCreevy
said.

Despite McCreevy’s open dissatisfaction with the standard, ASB chairman Ian
Mackintosh has given his full support for the IFRS standard.

In a letter to McCreevy following the Lisbon speech, Mackintosh said his
organisation had consulted widely on the standard for SMEs and believed the IASB
had put together a good standard.

‘On the evidence of the feedback the ASB has received, it is disappointing
that the commission appears to be taking such a negative stance on the IASB’s
proposed IFRS for SMEs and seeming to rule out the possibility of member states
applying the standard,’ Mackintosh said in the letter.

It will be interesting to see McCreevy’s response to the comments from the
ASB. The UK standard setter has already shown how influential it can be through
its backing of IFRS8, the standard for country-by-country reporting.

Activists and groups of investors made a good shot of scuppering the adoption
of IFRS 8 by raising an objection with the European Parliament.

Mackintosh stepped in, however, and wrote to the EU encouraging support for
the standard, which has since received the full backing of the European
Commission.

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