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June 28, 2017

Norway drops implementation of IFRS for SMEs as IFRS Foundation releases draft guidance on the standards

By Stephanie Wix

Norway has backed down from their plans to introduce IFRS for SMEs in the same week that the IFRS Foundation has published draft guidance on the standards.

The draft guidance is addresses the accounting treatment for a financial guarantee issued by a parent company in its financial statements. It is the first to be published since the initial comprehensive review of IFRS for SMEs was completed in May 2015.

The draft guidance is open for comment until 1 September 2017 and can be accessed here.

Norway on the other hand, has backed down from its 2015 commitments to implement IFRS for SMEs. In 2015, the Ministry of Finance for Norway circulated an exposure draft as part of a proposed reform to replace Norwegian accounting standards with IFRS for SMEs. Another exposure draft that has now been published has scaled back the changes which would not bring the Norwegian Accounting Act in line with the revised European Accounting Directive.

The minimal changes, with only some of the suggestions from the original, have been received with disappointment by both the Norwegian standard-setter (Norsk RegnskapsStiftelse) and the Norwegian national institute (Norsk Revisorforening). They see in the move as a conscious political choice ahead of the upcoming elections in Norway, as dropping implementation could save the government several hundred crowns. 

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