IASB Proposes to Simplify Disclosure to IFRS 19 for Subsidiaries without public accountability

by | Jul 31, 2024 | Accounting, Income Tax, Tech News

The International Accounting Standards Board (IASB) has published an Exposure Draft (ED) outlining targeted amendments to IFRS 19 Subsidiaries without Public Accountability: Disclosures, aiming to further simplify financial reporting for eligible entities. The proposed changes focus on reducing disclosure requirements stemming from new standards and amendments issued between February 2021 and May 2024.

Background and Rationale:

  • IFRS 19, issued in May 2024, provides a reduced disclosure framework for qualifying subsidiaries (those without public accountability whose parent prepares IFRS consolidated financial statements).
  • To ensure timely issuance of IFRS 19, the IASB initially included the full disclosure requirements for new standards/amendments published after the February 2021 cut-off date within IFRS 19 itself.
  • This new ED represents the IASB’s follow-through on its commitment to review and potentially reduce those specific disclosure requirements for eligible subsidiaries.

Objective of the Amendments:
The proposed amendments seek to reduce or simplify disclosure obligations within IFRS 19 for eligible subsidiaries applying the following standards:

  1. Lack of Exchangeability: Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates.
  2. International Tax Reform—Pillar Two Model Rules: Amendments to IAS 12 Income Taxes.
  3. Supplier Finance Arrangements: Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures.
  4. Primary Financial Statements: IFRS 18 Presentation and Disclosure in Financial Statements.
  5. Non-current Liabilities with Covenants: Amendments to IAS 1 Presentation of Financial Statements.

Future Standard Considered:
The ED also seeks stakeholder feedback on the feasibility of including potential disclosure requirements from the IASB’s upcoming standard on Regulatory Assets and Regulatory Liabilities within the IFRS 19 reduced disclosure framework.

Consultation and Next Steps:

  • The IASB invites comments on the Exposure Draft until 27 November 2024.
  • Feedback will inform the Board’s final decisions on the amendments.
  • The IASB aims to finalize these amendments to align their effective date with IFRS 19 itself, ensuring a coordinated implementation for eligible subsidiaries.

Source: IFRS, 30 July 2024.