IFRS 19: Reduced Disclosure Requirements For Subsidiaries

While no new major International Financial Reporting Standards (IFRS®) have been issued so far in 2025, it is important, as the year draws to a close, to reflect on the standards issued in previous years that will become effective in the imminent future.

IFRS 19 Subsidiaries without Public Accountability: Disclosures

IFRS 19 was issued in May 2024, with an effective date of 01 January 2027. It is also part of the IFRS's Disclosure Initiative projects, and its particular purpose is to reduce the disclosure burden faced by entities that do not have public accountability.

IFRS 19 is a voluntary standard that is available for application by eligible subsidiary companies. A subsidiary is eligible to apply the standard if:

• It does not have public accountability. An entity has public accountability if its debt or equity instruments are traded in a public market, or it is in the process of issuing such instruments for trading in a public market, or if it holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses; and
• It has an ultimate or intermediate parent that produces consolidated financial statements available for public use that comply with IFRS Accounting Standards.

IFRS 19 is applied together with other existing IFRS Accounting Standards, meaning that all recognition, measurement, and presentation requirements of applicable standards are retained. It is on the disclosure requirements that eligible subsidiaries will apply the reduced disclosure requirements. 

IFRS 19 is a disclosure-only standard. The intention behind it is to simplify reporting systems and processes for companies, and reduce the costs of preparing eligible subsidiaries' financial statements, while maintaining the usefulness of those financial statements for their users. Thus, to achieve fair presentation, a subsidiary applying IFRS 19 must consider whether it should provide additional disclosures if its compliance with the requirements in IFRS 19 would not be sufficient for users of its financial statements to understand its financial position, financial performance, and cash flows.

The disclosure requirements in IFRS 19 were determined by applying the set of principles that the International Accounting Standards Board (IASB) developed for the IFRS for SMEs Accounting® Standard, the principles of which assist to identify information important to users of financial statements of small to medium-sized entities without public accountability. 

Where an entity elects to apply IFRS 19, it will assert its compliance with IFRS Accounting Standards and state that it has applied IFRS 19. The application of the standard will be on a retrospective basis. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.