As reported previously in Inside Track, the ASB is closely monitoring the initial reactions to the draft standard. Project Director Peter Godsall outlines the latest developments.

The IASB's eagerly awaited proposals for a simplified set of standards for smaller companies have provoked a good deal of reaction.

The draft standard raises many important issues, for example:

• could the proposed standard fulfil a useful role as part of UK GAAP - for Small and Medium-sized Entities (SMEs) or as a new UK GAAP for larger companies?
• is the level of simplification in measurement and disclosure sufficient?
• does the proposed standard address the needs of developing countries that have adopted IFRS, or are looking to do so?

The ASB has already welcomed the exposure draft as recognition that the full suite of international standards is too complex for SMEs. While the IASB has been much criticised - often unfairly - for ignoring the demands of its constituents around the world, on this occasion, the IASB deserves praise for developing the IFRS for SMEs.

As part of the consultation process, the ASB has participated in a number of public roundtable meetings to discuss the IASB's proposals and their implications. The first of these, organised with ICAS, took place in March in Edinburgh. After a lively debate, a view emerged from ICAS members that the proposed standard would be a useful basis for reporting unlisted entities, but not a replacement for the FRSSE. At a similar event in May, organised with the ICAEW, the attendees expressed more diverse views. At the final event in June in Dublin, organised with the Irish profession, almost all delegates voted for two tiers of reporting - full IFRS and IFRS or SMEs.

What is becoming very evident is that there will be many views on the way forward for UK reporting when all the responses to the UK consultation papers are reviewed and analysed. The closing date for these comments was 31 July 2007.

Future issues of Inside Track will provide an opportunity to give UK constituents an insight of these views and the ASB's developing thinking on the future of UK convergence.

In the meantime, the European Commission has issued a Communication setting out measures to simplify the business environment for EU SMEs in the areas of company law, accounting and auditing. The proposals are open for comment until mid-October 2007 and can be accessed at: http:// ec.europa.eu/internal_market/company/ simplification/index_en.htm.