SMEs to get own standard

The decision was made at last month’s board meeting, and will see the creation of a new set of standards that will be published separately.

Although the board is to set characteristics to describe the SMEs that could use the standards, they will not be based on a ‘size test’, but rather on qualitative factors. It will then be up to regulators and standard setters from individual nations to determine which companies would be entitled to use them. ‘This is a significant move for SMEs,’ said Kevin Stevenson, director of technical activities at the IASB. ‘It will give entities another alternative for standards.’

The board also defined the general principles on the concept of control for its standard on consolidation, including special purpose entities (SPEs). Although SPEs have yet to be discussed in details, many of the fundamental points of the standard were established, although an exposure draft is not expected until 2004.

The treatment of exploration and evaluation activities was also considered, with a view to issuing interim guidance. The board agreed that current GAAP should continue to be used, but an exposure draft should see the light of day in a month or so.

Final touches to financial instruments standards IAS32 & 39 were also being prepared in time for the publishing of the final standards by the end of the year, although Stevenson said that talks with the banks were scheduled to discuss amendments.


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