An overview of IFRS 19
Key aspects
On 9 May 2024, the IASB released IFRS 19, titled “Subsidiaries without Public Accountability: Disclosures.” This new standard aims to simplify financial reporting by reducing disclosure requirements for eligible subsidiaries.
What’s the issue?
The standard was created based on stakeholder feedback to let subsidiaries of IFRS-reporting parent companies use IFRS standards with fewer disclosure requirements.
IFRS 19 is a voluntary standard that eligible subsidiaries can choose for their own financial statements, whether consolidated, separate, or individual. While they must still follow the recognition, measurement, and presentation rules of other IFRS standards, they can use simplified disclosure requirements instead.
Forvis Mazars point of view
For groups that apply IFRS standards at both the consolidated and subsidiary levels, IFRS 19 is expected to offer operational relief and cost savings. Subsidiaries can now maintain a single set of accounting records that satisfy both their parent company's requirements and the needs of their financial statement users.
Who can take advantage?
IFRS 19 applies to subsidiaries that choose to adopt the standard for their financial statements—whether consolidated, separate, or individual. To qualify, subsidiaries must not be publicly accountable and must be part of a group where the parent company prepares IFRS-compliant consolidated financial statements available to the public. When does it become effective? Eligible entities can choose to apply the new standard for reporting periods starting on or after 1 January 2027. Unless otherwise allowed or exempted, comparative information must be reported under IFRS 19. Early application is also allowed, but specific rules apply if IFRS 19 is used before IFRS 18.
How Forvis Mazars can help for new IFRS standards
Transition to new financial reporting standards provides a real opportunity to refresh, renew and enhance your processes through adopting the standard. We can help you grasp the opportunity to improve as well as comply. With our wide local and network experience, we can help you:
- Get organized: Provide insights of the impacts across your industry along with tools and techniques to help you get started with implementation
- Understand the impact: An initial high level impact review, followed by a detailed diagnostic to determine how the standard affects your financial picture, your investors, and the way you do business
- Transition and sustain: Develop an approach and action plan that covers all aspects of your project from inception to transition, and establish a robust governance structure with agreed project and change management protocol
Where do I get more details?
Watch this space for more detailed guidance on the new standard. In the meantime, contact us for more information about IFRS 19.