Sweep issues—approach to updating the Exposure Draft for the PFS Standard (Agenda Paper 31)

Background

The proposed disclosure requirements in the Exposure Draft Subsidiaries without Public Accountability: Disclosures (ED) were developed considering all IFRS Accounting Standards issued as at 28 February 2021 and exposure drafts published as at 1 January 2021 except for the Exposure Draft General Presentation and Disclosures. Therefore, the proposed disclosure requirements in the ED were based on IAS 1. IFRS 18 Presentation and Disclosure in Financial Statements will replace IAS 1 and make consequential amendments to other IFRS Accounting Standards.

The objective of the paper is to discuss how the proposed disclosure requirements set out in the ED should be updated for the future IFRS 18, which is expected to be issued before the IFRS Accounting Standard Subsidiaries without Public Accountability: Disclosures (the Subsidiaries Standard).

Staff analysis

Approach to updating the Exposure Draft for the disclosure requirements in IFRS 18

The disclosure requirements in the IFRS 18 have been analysed and categorised as follows:

• Disclosure requirements in IAS 1 that are retained in IFRS 18, which can be further categorised as changes to the nature of a requirement, editorial changes or unchanged requirements
• Disclosure requirements relocated from IAS 1 to IFRS 7 and IAS 8, which have undergone editorial changes
• New disclosure requirements in IFRS 18, such as those related to management-defined performance measures

General approach

Disclosure requirements from IAS 1 that were proposed in the ED should be included in the Subsidiaries Standard under the subheading ‘IFRS 18’.

Disclosure requirements in IAS 1 that are not proposed in the ED should not be included in the Subsidiaries Standard because they were assessed as not meeting the principles for reducing disclosure requirements.

Disclosure requirements in IFRS 18 that will be included in the Subsidiaries Standard are either added as disclosure requirements under the subheading ‘IFRS 18’ (for disclosure requirements that specify what information to disclose) or requirements that remain applicable in situ (for requirements that result in a disclosure when particular conditions are met).

Staff recommendation

The staff recommends that the IASB updates the ED for disclosure requirements in IFRS 18 using the approach described above.

In applying this approach to the prospective IFRS 18, the IASB should:

• Exclude from the Subsidiaries Standard guidance on applying disclosure requirements in paragraphs 78, 98, 114 and 117 of IAS 1 that will be retained in the IFRS 18
• Exclude from the Subsidiaries Standard IAS 1:106(d) that will become a presentation requirement in IFRS 18
• Include the relief in IAS 1:128 that will be retained in IFRS 18

IASB discussion

All 14 IASB members agreed with the staff recommendation but there was otherwise no significant discussion.