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The International Accounting Standard Board (IASB) has today issued a new IFRS Accounting Standard for subsidiaries. IFRS 19 Subsidiaries without Public Accountability: Disclosures permits eligible subsidiaries to use IFRS Accounting Standards with reduced disclosures. Applying IFRS 19 will reduce the costs of preparing subsidiaries’ financial statements while maintaining the usefulness of the information for users of their financial statements.

When a parent company prepares consolidated financial statements that comply with IFRS Accounting Standards, its subsidiaries are required to report to the parent using IFRS Accounting Standards. However, for their own financial statements, subsidiaries are permitted to use IFRS Accounting Standards, the IFRS for SMEs Accounting Standard or national accounting standards.

Subsidiaries using the IFRS for SMEs Accounting Standard or national accounting standards for their own financial statements often keep two sets of accounting records because the requirements in these Standards differ from those in IFRS Accounting Standards.

Subsidiaries using IFRS Accounting Standards for their own financial statements provide disclosures that maybe disproportionate to the information needs of their users.

IFRS 19 will resolve these challenges by:

  • enabling 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
  • reducing disclosure requirements―IFRS 19 permits reduced disclosures better suited to the needs of the users of their financial statements.

Andreas Barckow, IASB Chair, said:

IFRS 19 reduces costs in the financial reporting ecosystem, especially for companies, while meeting users’ information needs. It simplifies the reporting for subsidiaries by permitting the global financial reporting language to be applied throughout the group.

Subsidiaries are eligible to apply IFRS 19i 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 Standard

IFRS 19 and the Basis for Conclusions are available to IFRS Digital subscribers. You can purchase an IFRS Digital Subscription or a PDF version of the Standard from our web shop.

Access the supporting materials

Support to implement IFRS 19 will be available via the IFRS 19 implementation webpage.

The following documents, along with IFRS 19, are available from the completed project page:

Watch IASB Vice-Chair Linda Mezon-Hutter and Chair of Global Preparers Forum and Head of Accounting, Consolidation and External Reporting at Roche Ian Bishop discuss the benefits of IFRS 19.

iIFRS 19 is available to use immediately, subject to jurisdictional endorsement.

Followable tags

IFRS Accounting Standards development
IFRS Accounting Standards, Amendments and Interpretations
IFRS 19 Subsidiaries without Public Accountability Disclosures
National standard-setter