Key changes in financial statements and notes according to the TFRS for NPAEs (Revised 2022) and new DBD notification

More recently, the Department of Business Development (DBD) issued a new notification on “The definition of abbreviated components required in the financial statements for 2023,” which will take effect for financial statements prepared for fiscal years beginning on or after 1 January 2024.

This article summarizes the important changes introduced by both the TFRS for NPAEs (Revised 2022) and the new DBD notification. These changes are crucial for accountants and management to understand and implement in their financial reporting practices. The article will cover updated terminology, new disclosure requirements, and guidance on handling changes in accounting policies.

Key changes

1.     Updated Thai terminology:

• “Statement of financial position” is now “งบฐานะการเงิน” (previously “งบแสดงฐานะการเงิน”)

• “Statement of changes in equity” is now “งบการเปลี่่ยนแปลงส่วนของเจ้าของ” (previously “งบแสดงการเปลี่่ยนแปลงส่วนของเจ้าของ”)

• “Expense by nature” is now “ค่าใช้จ่ายตามธรรมชาติ” (previously “ค่าใช้จ่ายตามลักษณะ”)

2.     Updated Thai and English terminology:

• “Trade and other receivables” is now “Trade and other current receivables” (“ลูกหนี้การค้าและ ลูกหนี้หมุนเวียนอื่น”)

• “Trade and other payables” is now “Trade and other current payables” (“เจ้าหนี้การค้าและเจ้าหนี้หมุนเวียนอื่น”)

• “Financial lease liabilities” is now “Capital lease agreement liabilities” (“หนี้สินตามสัญญาเช่าเงินทุุน”)

• “Employee benefit obligations” is now “Provisions for current/non-current liabilities for employee benefits” (“ประมาณการหนี้สินหมุนเวียน/ไม่หมุนเวียนสำหรับผลประโยชน์พนักงาน”)

This updated terminology is more precise and reflects current financial reporting language.

1.     Adoption of the TFRS for PAEs:  

If an entity chooses to comply with certain TFRS for Publicly Accountable Entities (PAEs) as permitted by the TFRS for NPAEs (Revised 2022), this should be disclosed in the notes to the financial statements under the section, “Basis of preparation of the financial statements.” The disclosure should list the specific standards adopted, such as TAS 7, TAS 12, TAS 19, etc.

Allowing entities to adopt certain TFRS for PAEs gives them greater flexibility and enables more comprehensive reporting when beneficial.

2.     Changes in accounting policy:

When there is a material change in accounting policy, entities must provide:

• the name of the new TFRS being adopted

• confirmation that the change complies with the applicable transitional provisions

• information regarding the nature of the change

• a description of the applicable transitional provisions

• a description of the potential future effects of the applicable transitional provisions

• information on the quantitative impact on line items in the financial statements (if practicable)

For voluntary changes in accounting policy, entities must provide:

• information on the nature of the change

• the reasons for adopting the new policy

• information on the quantitative impact on line items in the financial statements (if practicable)

• adjustments to the current financial statements (if practicable)

These requirements regarding changes in accounting policy promote transparency and comparability.

Conclusion

The revisions to the TFRS for NPAEs and the new DBD notification bring significant changes to financial reporting for non-publicly accountable entities in Thailand. These changes aim to enhance the clarity and consistency of financial statements, aligning them more closely with international standards while maintaining relevance for the Thai business environment.

Accountants and management should familiarize themselves with these changes to ensure compliance and to implement the new standards for improved financial reporting. As these changes took effect from 1 January 2024, entities should start preparing now to transition smoothly to the new requirements.

By embracing these updates, the entity can enhance the quality and usefulness of their financial statements, resulting in better decision-making and increased stakeholder confidence.

References (in Thai):

• Announcement of the Department of Business Development: The definition of abbreviated

components required in the financial statements for 2023 (Full Version). Retrieved from

Department of Business Development.

• Thai Financial Reporting Standards for NonPublicly Accountable Entities (TFRS for NPAEs) (Revised 2022). Retrieved from Federation of Accounting Professions (TFAC).