The International Accounting Standards Board (IASB) has issued International Financial Reporting Standard (IFRS) 19 Subsidiaries without Public Accountability: Disclosures, which reduces the required disclosures for certain subsidiaries.
Subsidiaries are eligible for this election if their financial statements are not subject to public accountability but have a parent organization that prepares consolidated financial statements for public use under IFRS. Public accountability includes entities whose debt or equity instruments are traded in a public market, are in the process of having these instruments being traded publicly, or if the entity holds assets in a fiduciary capacity as one of its primary businesses.
Under IFRS 19, subsidiaries still must follow the same IFRS accounting standards as adopted by their consolidating group, but they could see a benefit from complying with a reduced version of the disclosure requirements. IFRS 19 provides disclosure relief for 32 specified standards. IFRS 8 Operating Segments, IFRS 17 Insurance Contracts and IAS 33 Earnings Per Share must still be fully disclosed. Entities who apply IAS 26 Accounting and Reporting by Requirement Benefit Plans, would meet the public accountability threshold and therefore are not eligible for the IFRS 19 election. Similar to the full IFRS standards, entities following IFRS 19 would not need to disclose information that is not material.
IFRS 19 is effective January 1, 2027 and is applied retrospectively with certain exceptions. Early adoption is permitted. Entities should also monitor for local reporting requirements. Entities that adopt IFRS 19 in one reporting period may revoke this election in a later period. Upon removing this election, comparative disclosure information would be required.
Schneider Downs provides assurance, tax, and advisory services for international entities and organizations following IFRS. For more information concerning international business matters and their impact to your organization, please visit the Schneider Downs Our Thoughts On blog or email us at [email protected].
About Schneider Downs International Services
The Schneider Downs International Services industry group is a dedicated team of professionals specializing in serving international companies. Schneider Downs helps clients take full advantage of all their international opportunities and can reach you and your business, no matter where you’re located around the globe.
To learn more, visit our International Services Industry Group page.