In IFRS-compliant consolidated financial statements, parent companies require subsidiaries to use IFRS Accounting Standards for reporting. However, subsidiaries can opt for IFRS, IFRS for SMEs, or national standards for their records. This often leads to maintaining two accounting record sets due to differing requirements. Subsidiaries using IFRS for their own financial statements may provide disclosures disproportionate to user needs.

IFRS 19 will:

• Enable subsidiaries to keep only one set of accounting records―to meet the needs of both their parent company and the users of their financial statements and
• Reduce disclosure requirements―IFRS 19 permits reduced disclosures that are better suited to the needs of the users of their financial statements.

Subsidiaries can apply for IFRS 19 if they do not have public accountability and their parent company applies IFRS Accounting Standards in their consolidated financial statements. A subsidiary does not have public accountability if it does not have equities or debt listed on a stock exchange and does not hold assets in a fiduciary capacity for a broad group of outsiders.

Access the press release on the IASB’s website.