ACCA welcomes the opportunity to provide views in response to the IASB’s exposure draft (ED) for Amendments to IFRS 19 Subsidiaries without Public Accountability: Disclosures. Our response has been developed with the assistance of ACCA’s Global Forum for Corporate Reporting.
Our general comments on the proposed amendments are as follows:
We are supportive of using a consistent approach to reduce disclosure requirements in IFRS 19 and to ensure these requirements remain proportionate for eligible subsidiaries, are clear and sufficient to meet the needs of users of eligible subsidiaries’ financial statements.
Nevertheless, a departure from this approach may sometimes be necessary. In this situation, removing the disclosure objective relating to non-current liabilities with covenants may hinder preparers’ understanding of the specific information required. We agree with removing the disclosure requirements relating to management-defined performance measures (MPM) in IFRS 19. Furthermore, we suggest the IASB reconsider the granularity of certain reconciling items when eligible subsidiaries use MPM and are required to provide the relevant information in accordance with IFRS 18. Details are included in our response to question 1.
We are supportive of reducing the disclosure requirements relating to supplier finance arrangements, pillar two model rules and lack of exchangeability. Details are included in our response to questions 2 – 4.
The disclosure requirements added to IFRS 19 due to Amendments to the Classification and Measurement of Financial Instruments issued in May 2024 may be disproportionate to eligible subsidiaries and the scope requires further clarification. Details are included in our response to question 5.
We believe stakeholders need to familiarise themselves with the new disclosure requirements in the prospective RARL Standard before evaluating the implications of reduced disclosures as reducing disclosure requirements is seldom a straightforward exercise. Further detail can be found in our response to question 6.
Lastly, the IASB should also evaluate, at a suitable time in the future, the granularity of disclosures and whether the disclosure requirements in IFRS 19 can be further reduced to remove disclosures that go beyond the information needs of users of those subsidiaries’ financial statements. For that, we suggest the IASB continue monitoring the market’s reception of IFRS 19 through the number of eligible subsidiaries that adopt this standard. We would like to reiterate a comment in our January 2022 letter to consider extending the scope of IFRS 19 to other entities without public accountability in helping to reduce the effort of gathering, publishing and auditing the full disclosures required by the IFRS Accounting Standards*. This may encourage further adoption of IFRS Accounting Standards where this is an option.
*This refers to ACCA’s response to question 2 in the IASB’s ED: Subsidiaries without public accountability: disclosures.
To read the response in full, please download the consultation response document found on this page.