IASB proposes reduced disclosure requirements for subsidiaries

The International Accounting Standards Board has proposed a new IFRS Standard that would permit eligible subsidiaries to apply IFRS standards with a reduced set of disclosure requirements.
The proposals respond to feedback from stakeholders and are designed to ease financial reporting for eligible subsidiaries while meeting the needs of the users of their financial statements. The proposed standard would be available to subsidiaries without public accountability – companies that are not financial institutions or listed on a stock exchange – whose parent company prepares consolidated financial statements applying IFRS Standards.

These subsidiaries report to their parent company for consolidation purposes applying IFRS Standards. Electing to apply the proposed Standard would enable them to also use IFRS Standards when preparing their own financial statements but with reduced disclosures. The proposals would save subsidiaries time and money by: Eliminating the need to maintain an additional set of accounting records for reporting purposes—if the subsidiary currently does not apply IFRS Standards in its own financial statements; and Reducing the disclosures required to comply with IFRS Standards. The IASB has tailored the disclosure requirements in the proposed Standard to meet the needs of financial statement users of subsidiaries without public accountability.

Sue Lloyd, vice chair of the Board said: “Our proposed Standard aims to provide a solution that will simplify reporting and be cost-effective for subsidiaries while meeting the information needs of the users of their financial statements.”
Access the Exposure Draft Subsidiaries without Public Accountability: Disclosures.