pt-br

A Comprehensive Overview of IFRS 19

 

By Mohammed Hassan*

The International Financial Reporting Standards (IFRS) have played a pivotal role in harmonizing financial reporting worldwide. The most recent addition to this set of standards is IFRS 19, known as ‘Subsidiaries without Public Accountability: Disclosures’. This standard, introduced in May 2024, marks a new chapter in financial reporting, especially for subsidiaries.

The Purpose of IFRS 19

The main aim of IFRS 19 is to outline the disclosure requirements that an entity can apply as an alternative to the disclosure requirements in other IFRS Accounting Standards. This standard is designed to alleviate the issue of over-disclosure and reduce reporting costs, particularly for subsidiaries.

Key Aspects of IFRS 19

IFRS 19 permits an entity to apply the requirements in other IFRS Accounting Standards, except for the disclosure requirements. Instead of the disclosure requirements, the entity applies the requirements in IFRS 19. This implies that an entity applying IFRS 19 is not obligated to apply the disclosure requirements in other IFRS Accounting Standards or apply any statements about, or references to, those disclosure requirements.

However, there are certain exceptions:

  • Disclosure requirements in other IFRS Accounting Standards that remain applicable to an entity applying IFRS 19 are specified in IFRS 19.
  • If an entity applying IFRS 19 applies IFRS 8 Operating Segments, IFRS 17 Insurance Contracts, or IAS 33 Earnings per Share, it is required to apply all the disclosure requirements in those standards.
  • A new or amended IFRS Accounting Standard may include disclosure requirements about an entity’s transition to that standard.

The Impact of IFRS 19

IFRS 19 is anticipated to streamline the reporting process for subsidiaries by allowing the global financial reporting language to be applied throughout the group. It provides eligible subsidiaries with a practical solution to the problems of over-disclosure while reducing their reporting costs.

In Conclusion

IFRS 19 signifies a major advancement in financial reporting. By minimizing disclosure requirements and simplifying the reporting process, it is expected to make financial reporting more efficient and cost-effective, particularly for subsidiaries. As the standard applies to an annual reporting period beginning on or after 1 January 2027, entities have sufficient time to comprehend and implement the changes brought about by IFRS 19.

 

*Mohammed is an accountant at ROMA.

Leave a Reply