LATEST UPDATE

Exposure Draft Consolidation Exception

In May 2026, the IASB published the Exposure Draft Consolidation Exception, which is available on:

https://www.ifrs.org/content/dam/ifrs/project/ifrs-for-smes-accounting-standard-consolidation-exception/ed-iasb-sme-2026-1-consolidation-exception.pdf

It addresses a question that was raised to the SMEIG and is open for comment until 9 September 2026, with more details on:

https://www.ifrs.org/projects/work-plan/ifrs-for-smes-accounting-standard-consolidation-exception/ed-cl-consolidation-exception/

The application question was about whether the exception in paragraph 9.3 of the IFRS for SMEs Accounting Standard (Standard), from preparing consolidated financial statements (the ‘consolidation exception’), applies to an intermediate parent, if its ultimate (or intermediate) parent is an investment entity that produces separate financial statements in which the subsidiary is measured at fair value through profit or loss.

It is important for the IASB to hear feedback from both preparers and users of SME financial statements, so that it can understand how widely the proposed exception would be used and how it would affect users of SMEs’ financial statements. All comments are valuable.

If the IASB does issue the amendments, depending on the feedback, they will be effective from 1 January 2027, the same effective date as the third edition of the Standard.