The National Accounting Standards Board (NASB) has prepared and put for public comment a draft of comment letter on the Exposure Draft of a Proposed IFRS for Small and Medium-sized Entities. The National Accounting Standards Board (NASB) has prepared and put for public comment a draft of comment letter on the Exposure Draft of a Proposed IFRS for Small and Medium-sized Entities. The IASB proposes that the IFRS for SMEs should be a stand-alone document, with minimal cross-references to full IFRS. We believe that the IFRS for SMEs should be a completely self-contained set of standards for SMEs, and therefore, all cross-references to full IFRSs should be removed from them. The entities that are within the scope of the Paper, while representing in their financial statements transactions and other events for which there are no specific requirements in the IFRS for SMEs, shall use concepts and pervasive principles described in the relevant section of this Standard and may, but should not be obliged to, use full IFRSs as a reference. In order to achieve that aim, the appropriate sections providing detailed specific guidance from full IFRS (whether modified or not for SMEs) should be introduced into the Paper to replace the cross-references to full IFRSs that currently exist. Many small and medium entities, generally with the exception of subsidiaries of larger companies with public accountability, will use the IFRS for SMEs only, and should be pro-vided with the ability to use guidance only from the set of standards for SMEs. The necessity to simultaneously use guidance from two cross-referenced sets of accounting standards is likely to give rise to problems with understanding and practical implementation of these standards by SMEs. Providing SMEs with a possibility to use alternative accounting policies similar to those contained in full IFRSs will enable easy consolidation of financial reporting data of those SMEs that are subsidiaries of publicly accountable companies reporting under full IFRSs. We understand that one of the principles selected by the IASB in order to make decisions on simplifications of recognition and measurement requirements for SMEs was ‘benefit over cost’ principle’. However, in our view the proposed simplifications do not realize this principle in full. Some concepts and requirements of full IFRSs are extremely complex and expensive to apply and, therefore, may be cost efficient only when applied by large companies to significant volume of similar items or transactions. This applies, in particular, to such concepts as ‘fair value’, ‘revaluation model’ or ‘impairment of goodwill’. We believe that the IFRS for SMEs should preserve the option to apply alternative accounting treatments that are the same (of slightly modified to take into account specific circumstances of SMEs) as alternative accounting treatments contained in full IFRSs. However, we believe that in contrast to the approach proposed in the Paper that involves cross-references to specific full IFRSs or paragraphs from them, it would be more appropriate to directly incorporate relevant provisions and guidance to the IFRS for SMEs. The NASB invites experts and interested specialist to comment on drafts. Please send your comments before September 3, 2007 to This email address is being protected from spambots. You need JavaScript enabled to view it. or post them at the forum of the NOFA foundation website.