IFRS 19-REDUCED DISCLOSURE REQUIREMENT FOR SUBSIDIARIES WITHOUT PUBLIC ACCOUNTABILITY

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IFRS 19 — titled “Subsidiaries without Public Accountability: Disclosures” — is a new accounting-standard issued in May 2024 by the International Accounting Standards Board (IASB).

Its purpose is to allow certain subsidiaries to apply full IFRS recognition, measurement and presentation rules while benefiting from reduced disclosure requirements.

Who can use it

A subsidiary can elect to apply IFRS 19 only if at the reporting date:

• It does not have “public accountability” (i.e. its equity/debt is not publicly traded and it doesn’t hold assets in a fiduciary capacity for a broad group of outsiders)
• Its ultimate or intermediate parent prepares consolidated financial statements under IFRS that are publicly available.

What stays — what changes

• Recognition, measurement and presentation requirements remain exactly as under existing IFRS standards.
• What changes is the level of required disclosures: subsidiaries using IFRS 19 only need to provide a limited (reduced) set of disclosures instead of the full suite under IFRS.

Why IFRS 19 was introduced

• Some subsidiaries previously faced a trade-off: use full IFRS (heavy disclosures) or local GAAP / IFRS for SMEs (which may not align with group-level accounting).
• IFRS 19 helps remove the need for dual accounting records, reduces complexity and cost of preparing statutory financial statements, and still ensures consistency with parent-level accounting.

Effective date & optional nature

• IFRS 19 becomes effective for annual periods beginning 1 January 2027.
• Early adoption is permitted (if endorsed locally).
• Its use is optional and applies only for eligible subsidiaries.