International Financial Reporting Standard 19 – Subsidiaries without Public Accountability: Disclosures
What is the purpose of IFRS 19?
IFRS 19 provides significant relief from disclosure requirements for subsidiaries without public accountability that prepare their financial statements in accordance with IFRS Accounting Standards.
Effective from 2027 (with early application permitted), the standard allows such entities to apply a reduced disclosure framework, while still ensuring that users of financial statements receive useful and relevant information.
What is the objective of IFRS 19?
The objective of IFRS 19 is to simplify financial reporting for subsidiaries and reduce reporting costs, without compromising the quality, transparency or usefulness of the information presented to users of financial statements.
What are the eligibility criteria for IFRS 19?
An entity is eligible to apply IFRS 19 only if all of the following conditions are met:
The entity is a subsidiary.
The entity does not have public accountability, i.e., its debt or equity instruments are not traded in a public market, and it does not hold assets in a fiduciary capacity for a broad group of outsiders.
The parent entity (ultimate or intermediate) produces consolidated financial statements that are publicly available and prepared in accordance with IFRS Accounting Standards.
What are the disclosure requirements under IFRS 19?
The disclosure requirements in IFRS 19 represent a condensed version of the disclosure requirements found in other IFRS Accounting Standards. A subsidiary applying IFRS 19 must still comply with the recognition, measurement and presentation requirements of all other IFRS Accounting Standards. However, if the information resulting from specific disclosures is not material, the entity is not required to provide such disclosures.
Are additional disclosures sometimes required under IFRS 19?
At the same time, management shall consider whether to include additional disclosures, when necessary, to ensure a complete and transparent understanding of the subsidiary’s financial position and performance. In essence, IFRS 19 strikes a balance between cost-efficiency and transparency, providing a practical reporting solution for subsidiaries that apply IFRS accounting standards but do not have public accountability.