Road Map of TFRS for NPAEs

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Episode 1

· TFRS for NPAEs has been announced andexecuted for four years ago.

· TFRS for NPAEs was emerged from thethought of the head of FAP who recognized the importance of NPAEs (Non-PubliclyAccountable Enterprises) in that the paradigm of financial reportingpreparation should be different from PAEs.

· Prior 2011, the preparation ofaccounting and financial reporting of businesses in Thailand including limitedcompanies or partnerships was based on the principles most originated fromIFRS. Some accounting standards may be originated from US GAAP, and only oneaccounting standard is defined by FAP itself. To be lenientfor NPAEs, 8 accounting standards were allowed not to be effective for smalland medium businesses which are not publicly traded companies; suchcurtain accounting standards were such as the preparation of cash flowstatement, the preparation of consolidation financial statement, the disclosurerelating to affiliate entities and the review of asset impairment.

· Eventually, TFRS for NPAEs wasissued and enacted with the thought in that people who use financialstatements of NPAEs are most owners or management of companies only.Accordingly, preparation of financial reporting based on thesame accounting standards complied by publicly traded companies is toomuch requirement for NPAEs although allowed not to comply eight accountingstandards; the costs of preparation are still greater thanthe benefits. Thus, the FAP in that time defined and issued TFRSs forNPAEs for Non-Publicly Accountable Enterprises onwards.

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Episode 2

· The key differences of TFRSs for PAEs and TFRSs for NPAEs are as    follows:

o TFRS for NPAEs does not enforce companies to disclose operating segment.

o TFRS for NPAEs does not enforce companies to disclose related-party transactions including benefits of management.

o TFRS for NPAEs does not enforce companies to disclose expenses by the nature of expenses.

o TFRS for NPAEs is lenient not to use fair value concepts for many assets (required for TFRSs for PAEs), only trading investment and available for sale investment required to apply fair value method.

o For TFRS for NPAEs, using “consistently” instead of “every year” for the review of useful lives of assets, carrying value of assets and depreciation methods. “Consistently” is implied that companies should review such characteristics in the appropriate time based on management judgement.

o The provision which is greater than a year is not required to be estimated (only the best estimate as possible) and such provision is not required to apply discounted cash-flow method.

o TFRS for NPAEs does not enforce companies to prepare cash flow statement.

o TFRS for NPAEs does not require companies to prepare consolidation financial statements.

o TFRS for NPAEs does not require companies to prepare statement of comprehensive income, only statement of income.

o TFRS for NPAEs does not require companies to disclose regarding functional currency.

o For TFRS for NPAEs, the disclosure regarding employee benefits is not required to be determined by actuary.

o For a point accumulation program, TFRS for NPAEs does not specify that companies require to determine fair value for such transaction and separately recognize such revenue as unearned revenue. However, in this matter, companies should review the provision (liability) based on TFRS for NPAEs as well.

o For real estate businesses, there are three alternatives to recognize revenue for TFRS for NPAEs:

§ 100% completion

§ Percentage of completion

§ Installment

For TFRS for PAEs, revenue on sales of real estate is only recognized when companies already transferred material risk and rewards to their customers.

Create Date : 29 ตุลาคม 2559
Last Update : 20 พฤศจิกายน 2559 16:46:27 น.		0 comments
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