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Disclosure initiative — Subsidiaries that are SMEs

Date recorded:


The objective of the project is to develop an IFRS Standard (reduced disclosure IFRS Standard) that will permit subsidiaries that are small and medium-sized entities (SMEs) to apply IFRS Standards but with reduced disclosure requirements.

At this meeting, the Board discussed further matters identified from the staff analysis of adaptations to the reduced disclosure requirements under the following papers:

IFRS 17 Insurance Contracts (Agenda paper 31A)

This paper considered whether, if the Board decided to propose a reduced-disclosure IFRS Standard, the proposal should include disclosure requirements for insurance contracts within the scope of IFRS 17 Insurance Contracts

Board discussion

Due to the complex nature of IFRS 17, the Board recognised the need for expertise to identify which sections to include. Should the Board decide to propose a reduced-disclosure standard, consultation should be made with preparers and users to identify what types of entities will benefit from it.

The staff recommendation was support by 12 out of 13 Board members.

Transition to the reduced-disclosure IFRS Standard (Agenda paper 31B)

This paper discussed how a subsidiary would make the transition to a possible reduced-disclosure IFRS Standard.

Board discussion

The staff clarified that the recommendations are intended to clarify the application of the transitional provisions when an entity decides to adopt the reduced-disclosure standards. The Board also want to make it clear that an entity which decides to adopt the reduced-disclosure standards and subsequently decides to move back and adopt IFRS Standard, they will not be considered a ‘first-time’ adopter.

The staff recommendation was support by 12 out of 13 Board members.

Scope of the reduced-disclosure IFRS Standard (Agenda paper 31C)

This paper examined the scope of a possible reduced-disclosure IFRS Standard and whether the scope should remain subsidiaries that are small and medium-sized entities (SMEs) or should be expanded to a wider group of entities and, if so, which entities.

The Board have discussed the matters raised in the paper and have clarified that the purpose of the reduced-disclosure standard is not to create a third regime, but to create a standard that will cater to the need of entities that are SMEs which are based in IFRS.

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