The IFRS for SMEs Accounting Standard Update is a staff summary of news, events and other information about the IFRS for SMEs® Accounting Standard (Standard) and related SME activities. The staff summary has not been reviewed by the International Accounting Standards Board (IASB).
This edition of the IFRS for SMEs Accounting Standard Update includes:
- an overview of Section 11 Financial Instruments in the third edition of the Standard;
- an update on the membership of the SME Implementation Group (SMEIG);
- resources published to support implementation of the Standard; and
- the upcoming World Standard-setters (WSS) Conference 2025.
Overview of the third edition of the Standard—Topic of the quarter—Spotlight on Section 11 Financial Instruments
The IASB issued the third edition of the Standard in February 2025. This edition of the Standard is updated to reflect improvements made in full IFRS Accounting Standards in the scope of the second comprehensive review of the IFRS for SMEs Accounting Standard.
The IASB developed the amendments to the Standard by applying the alignment approach. The alignment approach requires the IASB to use the principles of relevance to SMEs, simplicity and faithful representation, including costs and benefits to determine whether and, if so, how to align the Standard with full IFRS Accounting Standards.
Section 11 Financial Instruments sets out the recognition, measurement and disclosure requirements for financial instruments.
In applying the alignment principles to IFRS 9 Financial Instruments, the IASB retained in the third edition of the Standard:
- the incurred loss model for the impairment of financial assets measured at amortised cost; and
- the hedge accounting and derecognition requirements.
Table 1 summarises the main changes to Section 11 in the third edition of the Standard.
