IFRS 19 — Subsidiaries without Public Accountability: Disclosures
Issued 2024 – Effective for periods beginning 1 January 2027
IFRS 19 allows subsidiaries that do not have public accountability (not listed, not financial institutions, not holding assets for a broad group of outsiders) to apply reduced disclosure requirements, while still using full IFRS recognition and measurement.
It is the IFRS equivalent of a “reduced disclosure framework”.
1. Objective
To reduce the disclosure burden for subsidiaries in groups that use full IFRS, but where the subsidiary itself has no public accountability.
The subsidiary:
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Measures and recognises items using full IFRS
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Presents fewer disclosures using IFRS 19
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Consolidation by parent still follows full IFRS
2. Which entities qualify?
A subsidiary qualifies if:
✔ It is a subsidiary
✔ It does not have public accountability
✔ Its parent produces consolidated financial statements that comply with full IFRS
Public accountability includes:
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A publicly listed entity
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A financial institution, bank, insurance company
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An entity holding assets in a fiduciary capacity for wide group of outsiders (e.g., mutual fund)
3. Main Features of IFRS 19
✔ Full IFRS recognition and measurement
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Use IFRS 9, IFRS 15, IFRS 16, IAS 12, etc., exactly as in full IFRS
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Only disclosures are reduced
✔ Reduced disclosure requirements
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Based on IFRS for SMEs, but adapted to full IFRS measurement
✔ Standalone financial statements only
IFRS 19 is applied only in the subsidiary’s own separate financial statements.
4. Reduced Disclosure Areas (Key Topics)
| IFRS Standard | Reduced Disclosures under IFRS 19 |
|---|---|
| IFRS 7 – Financial Instruments | Much fewer risk disclosures; only key credit/liquidity/market risks |
| IFRS 12 – Interests in other entities | Only summarised information, no extensive detail |
| IFRS 13 – Fair Value | High-level fair value hierarchy (no long reconciliations) |
| IFRS 15 – Revenue | No extensive contract liability tables |
| IFRS 16 – Leases | Simple maturity table instead of detailed breakdown |
| IAS 1 – Presentation | No requirement for third balance sheet |
| IAS 19 – Employee Benefits | Short-form actuarial disclosures |
5. Examples (very important)
Example 1 — Entity qualifies
Parent: Global Manufacturing Plc (listed in London), prepares full IFRS consolidated FS
Subsidiary: Cambodia Auto Parts Co., Ltd
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Manufactures spare parts
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Not listed
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Not a financial institution
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No fiduciary activities
➡ Subsidiary can use IFRS 19 with reduced disclosures.
Example 2 — Entity does NOT qualify
Subsidiary: Bright Finance Co.
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Provides loans to the public
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Has public accountability (financial institution)
➡ Cannot apply IFRS 19, must use full IFRS disclosures.
Example 3 — Reduced disclosure for IFRS 7
Full IFRS requires:
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Detailed analysis of credit risk
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Sensitivity analysis
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Liquidity table by month
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Hedge accounting detail
IFRS 19 only requires:
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Major categories of financial assets
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High-level credit risk description
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Maturity analysis (short format)
Illustration:
Under IFRS 19 disclosure:
“The company’s financial assets consist mainly of trade receivables. Credit risk is limited because customers are long-term contracts with the parent group. Trade receivables of $120,000 are due within 90 days.”
Example 4 — Reduced disclosure for IFRS 16
Full IFRS disclosure:
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Separate tables for lease liabilities
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Weighted average discount rate
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Interest charge
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Reconciliation of opening and closing balances
IFRS 19 disclosure:
Lease liability = $300,000
Maturity:
• Within 1 year: $80,000
• 1–5 years: $220,000
No other extensive disclosures required.
Example 5 — Revenue (IFRS 15)
Full IFRS requires:
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Disaggregation by product, geography, customer type
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Contract balances detail
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Performance obligations explanation
IFRS 19 requires only:
Revenue is $1,500,000 from sale of goods.
Revenue is recognized at a point in time when control is transferred to customers.
6. Transition to IFRS 19
The subsidiary can apply IFRS 19:
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Prospectively, or
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Retrospectively (with some simplifications)
Must disclose:
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That it applied IFRS 19
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Which exemptions were used
7. Benefits of IFRS 19
✔ Significant reduction of disclosures
✔ Cost-saving for group subsidiaries
✔ Consistency with parent’s recognition and measurement
✔ Simplifies auditing and reporting
✔ Useful for large international groups with many subsidiaries
8. Quick One-Page Summary (useful for revision)
IFRS 19 allows small subsidiaries in a large IFRS group to:
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measure things using full IFRS
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present reduced disclosures
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avoid heavy reporting requirements
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provided they have no public accountability