(This article was published on 9 May 2024 and updated on 14 January 2025†)
Highlights
Subsidiaries of companies using IFRS® Accounting Standards can substantially reduce their disclosures and focus more on users’ needs following the release of IFRS 19 Subsidiaries without Public Accountability: Disclosures, from the International Accounting Standards Board (IASB).
A subsidiary that does not have public accountability, and has a parent that produces consolidated accounts1 under IFRS Accounting Standards, is permitted to apply IFRS 19.
Subsidiaries that currently apply the IFRS for SMEs® Accounting Standard or local GAAP in their statutory financial statements will no longer need to prepare two sets of accounts for group reporting purposes if IFRS 19 is applied.
The requirements in brief
IFRS 19 allows eligible subsidiaries to apply IFRS Accounting Standards with the reduced disclosure requirements of IFRS 19.
A subsidiary may choose to apply the new standard in its consolidated, separate or individual financial statements provided that, at the reporting date:
- it does not have public accountability2; and
- its parent produces consolidated financial statements3 under IFRS Accounting Standards.
A subsidiary applying IFRS 19 is required to clearly state in its explicit and unreserved statement of compliance with IFRS Accounting Standards that IFRS 19 has been adopted (see FAQs below).
Updating IFRS 19
The IASB intends to update IFRS 19 on an ongoing basis as new or amended disclosure requirements in IFRS Accounting Standards are issued.
Because of the timing of IFRS 19’s publication, disclosure requirements in new or amended IFRS Accounting Standards issued between 28 February 2021 and May 2024 were included in IFRS 19 without reductions. The IASB issued a ‘catch-up’ exposure draft in July 2024 to consult on reducing the disclosure requirements for the relevant standards issued in this period, most notably IFRS 18 Presentation and Disclosure in Financial Statements: read our comment letter (PDF 196 KB).
Effective date and transition
Eligible subsidiaries can choose to apply the standard for reporting periods beginning on or after 1 January 2027. Earlier application is permitted.
Consider whether your subsidiaries are eligible to apply this new IFRS Accounting Standard. Speak to your local KPMG contact for further guidance.
Frequently asked questions (FAQs)
1 That are available for public use.
2 A subsidiary generally has public accountability if it is listed on a public market or holds assets in a fiduciary capacity as one of its primary businesses (e.g. banks, mutual funds etc.). Refer to the standard for the full definition.
3 That are available for public use.
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