Audit & assurance
Independence and rigour that provides confidence and transparency for stakeholders and society
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.
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.
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.
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.
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:
Watch this space for more detailed guidance on the new standard. In the meantime, for more information about IFRS 19, contact your local Forvis Mazars contact or Adil Khan.
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