16/07/2024 - Join the new EFRAG users of subsidiary financial statements community
EFRAG invites users of financial information of subsidiaries without public accountability to join EFRAG´s community, which will act as a sounding board to help EFRAG with the usefulness of the disclosures included in the financial statements of the eligible subsidiaries. Users may in particular be credit analysts, banks or minority shareholders. Input from this new EFRAG community will first be used to assess IFRS 19 Subsidiaries without Public Accountability: Disclosures against endorsement criteria within Europe, and thereafter to provide input to subsequent changes to IFRS 19.
EFRAG welcomes all users with an interest in the financial statements of subsidiaries with parents that apply IFRS Accounting Standards!
On 9 May 2024 the IASB published IFRS 19 Subsidiaries without Public Accountability: Disclosures to allow potential cost savings for eligible subsidiaries. A subsidiary with a parent that applies IFRS Accounting Standards when producing its consolidated financial statements can apply recognition and measurement requirements in IFRS Accounting Standards with reduced disclosure requirements in its financial reporting. The reasons for allowing this from 1 January 2027 (early application being permitted) were:
Subsidiaries applying IFRS Accounting Standards have extensive disclosure requirements - disproportionate for the user needs of the subsidiaries; and
Local GAAP has different recognition and measurement requirements, therefore requires the use of two sets of accounting records - for the parent's consolidation purposes and for the subsidiary's financial statements, respectively.
EFRAG invites users of financial statements of subsidiaries with parents that apply IFRS Accounting Standards to join the new EFRAG community. Users could in particular be credit analysts, banks or minority shareholders. EFRAG welcomes all users with an interest in the financial statements of subsidiaries without public accountability.
Input from this new EFRAG community will be used to assess IFRS 19 against the endorsement criteria within Europe and to provide feedback to the IASB on future changes to IFRS 19. The IASB will continue to discuss additional reductions to full disclosures in IFRS Accounting Standards, including further reductions that will be proposed in the forthcoming exposure draft to be issued in July 2024. As the new standard will require constant maintenance and updating, this new EFRAG users of subsidiary financial statements community will be invited to provide input for any upcoming Exposure Draft consultation which involves disclosure requirements.
The EFRAG Secretariat prepared a briefing to illustrate the application of IFRS 19 in the European landscape.
The EFRAG user of subsidiary financial statements community is open to all relevant users and operates in the form of closed online workshops and surveys. Results of workshops and surveys will only be communicated on an anonymous basis.
Those interested in joining this community are invited to contact EFRAG Senior Technical Manager, Aleksandra Sivash, and EFRAG Project Director, Kathrin Schoene.
