IASB completes technical decisions on three projects

The International Accounting Standards Board (IASB) has this week concluded its technical decision-making on three projects:

• the Second Comprehensive Review of the IFRS for SMEs Accounting Standard project;
• the Rate-regulated Activities project; and
• the Post-implementation Review (PIR) of IFRS 15 Revenue from Contracts with Customers project.

Second Comprehensive Review of the IFRS for SMEs Accounting Standard

The IASB maintains the IFRS for SMEs Accounting Standard through periodic reviews. The outcome of the second comprehensive review will improve information provided to users of SME financial statements while maintaining the simplicity of the Standard for SMEs. The IASB decided that the third edition of the IFRS for SMEs Accounting Standard will be effective for annual reporting periods beginning on or after 1 January 2027. The IASB plans to issue the third edition of the Standard in the first half of 2025.

Rate-regulated Activities project

The IASB has completed its redeliberations on the Rate-regulated Activities project and the focus will now move to drafting a new Accounting Standard. The proposed Standard aims to provide users of financial statements with better information about the effects of rate regulation on companies’ financial performance and financial position. The IASB expects to issue the Standard in the second half of 2025 with a recommended effective date of 1 January 2029, providing companies with sufficient time for implementation. Early application of the Standard will be permitted.

Both projects are now starting the balloting process, an approval process designed to ensure the new edition and the new Standard accurately reflect the IASB’s decisions.

Post-implementation Review of IFRS 15 Revenue from Contracts with Customers

The IASB has also concluded its PIR of IFRS 15 Revenue from Contracts with Customers. This review began in September 2022 and has shown that the Standard is working as intended, providing users with more useful information about a company’s revenue. The IASB intends to publish a project summary and feedback statement of the review in the third quarter of 2024.