New Department of Business Development notification, ‘Definition of Abbreviated Components Required in Financial Statements 2023’

Keywords: Mazars, Thailand, Accounting, Financial Statements, TFRS, NPAEs 

Since the first version of this notification was issued 12 years ago, it has been updated periodically to match changes to financial reporting standards made by the Thai Federation of Accounting Professions. This latest version of the notification introduces additional abbreviated components required in financial statements to match the changes made in the latest Thai Financial Reporting Standards for Non-publicly Accountable Entities (TFRS for NPAEs) and the full TFRS. These include aspects such as inventory; the revaluation of land, buildings, and equipment; the measurement of the fair value of investment properties; provisions and contingent liabilities; leases; biological assets; and investments in subsidiaries. 

Key changes 

     1. Replacement of older versions 

This newest version replaces older versions issued in 2011, 2016, and 2019.

     2. Financial statement requirements for various entities 

• Registered partnerships, limited companies, legal entities established under foreign law, as well as joint ventures, which, under the Revenue Code, do not meet the conditions for being a non-publicly accountable entity under the TFRS for NPAEs, must prepare financial statements with abbreviated components using Form 3 (that for a public company limited). 
• Entities which meet the conditions for being a non-publicly accountable entity under TFRS for NPAEs must use Form 1, 2, 4, and 5, but those which intend to prepare financial reports in accordance with the full TFRS must also use Form 3 for abbreviated components. 
   

     3. Options for statement of comprehensive income 

Individuals responsible for preparing financial statements with abbreviated components using Form 3 can choose to present the statement of comprehensive income in one of the following ways: 

     a. by the nature of expenses in a single statement; 

     b. by the nature of expenses in a separate statement; 

     c. by the function of expenses in a single step in a single statement; 

     d. by the function of expenses in a single step in a separate statement; 

     e. by the function of expenses in multiple steps in a single statement; or 

     f. by the function of expenses in multiple steps in a separate statement. 

  4. Options for statement of income or comprehensive income 

Registered partnerships, limited companies, legal entities established under foreign law, as well as joint ventures, which meet the conditions for being a non-publicly accountable entity under the TFRS for NPAEs and are not responsible for preparing financial statements with abbreviated components using Form 3 can choose to present the statement of income or statement of comprehensive income in one of the following ways: 

     a. a statement of income by the nature of expenses; 

     b. a statement of comprehensive income by the nature of expenses in a single statement; 

     c. a statement of comprehensive income by the nature of expenses in a separate statement; 

     d. a statement of income by the function of expenses in a single step; 

     e. statement of comprehensive income by the function of expenses in a single step in a single statement; 

     f. a statement of comprehensive income by the function of expenses in a single step in a separate statement; 

     g. a statement of income by the function of expenses in multiple steps; 

     h. a statement of comprehensive income by the function of expenses in multiple steps in a single statement; or 

     i. a statement of comprehensive income by the function of expenses in multiple steps in a separate statement. 

  5. Omission of abbreviated components 

If the nature or conditions of the business do not require the need to report certain abbreviated components, those abbreviated components can be omitted from the financial reporting documents. 

  6. Adherence to financial reporting standards 

When financial reporting standards require that items be presented other than as specified in the notification, the financial standards must be followed. Alternatively, these items can be grouped as outlined in the notification, taking into account the appropriateness of the type and nature of the items. Any additional details should be provided in the notes to the financial statements. 
 

Reference (in Thai): https://ratchakitcha.soc.go.th/documents/11932.pdf