EFRAG issues Final Comment Letter on the IASB ED Amendments to IFRS 19 Subsidiaries without Public Accountability: Disclosures

EFRAG has published its Final Comment Letter (‘FCL’) on the IASB's Exposure Draft IASB/ED/2024/5 Amendments to IFRS 19 Subsidiaries without Public Accountability: Disclosures (the 'ED').

EFRAG’s Support and Suggestions for Clarification on Disclosures

EFRAG supports the IASB’s approach to updating IFRS 19 Subsidiaries without Public Accountability: Disclosures, including the decisions taken on whether and how to reduce the new and amended disclosures proposed in the IFRS Accounting Standards issued between February 2021 and May 2024. At the same time, EFRAG suggests the IASB clarify the application of the principles for reducing disclosures. The changes addressed in the ED relate to the aspects of: Presentation and disclosure in financial statements, Supplier finance arrangements, International tax reform – Pillar Two model rules, Lack of exchangeability, Financial instruments classification and measurement, and potential reduction of disclosures for the prospective Regulatory Assets and Regulatory Liabilities standard.

EFRAG Calls for Consultative Group and Review Process

EFRAG recommends the IASB to establish a dedicated consultative group which will include users of the financial statements of subsidiaries without public accountability. EFRAG also considers that it could be helpful to establish a review process for recent IFRS 19 amendments, in cases where the IASB issues a new IFRS Accounting Standard and the complete set of the disclosure requirements of that Standard would apply to subsidiaries without public accountability.

Timing and Transition Considerations for IFRS 19 Amendments

In addition, EFRAG notes that the timing for the finalisation of the amendments to IFRS 19 is important. EFRAG suggests that the publication of the amendments would be most helpful if completed before the implementation process of IFRS 19 starts, so that preparers wishing to apply IFRS 19 would welcome the opportunity to implement updated IFRS 19 disclosure requirements without having to make further changes to their reporting processes and systems. EFRAG also observes that the ED does not include an effective date and transition requirements for the proposed amendments to IFRS 19 requirements.