Exposure Draft: Amendments to IFRS 19

Timeline

The IASB issued the Exposure Draft ‘Amendments to IFRS 19 Subsidiaries without Public Accountability: Disclosures’ on 30 July 2024.

The IASB will consider all comments received in writing by 27 November 2024.

Background

IFRS 19, issued on 9 May 2024, is a voluntary IFRS Accounting Standard for use by subsidiaries without public accountability that prepare financial statements applying IFRS Accounting Standards. Details of the UKEB’s response to this project can be found on our project webpage here and information on the forthcoming endorsement assessment of IFRS 19 can be found here.

When IFRS 19 was issued in May 2024 it included reduced disclosures in respect of IFRS Accounting Standards issued before 28 February 2021. Disclosure requirements in new or amended IFRS Accounting Standards issued between 28 February 2021 and May 2024 were included in IFRS 19 without reductions because the IASB did not consult on reducing these requirements.

The ED proposes reductions to these disclosure requirements applying the principles for reducing disclosures that the IASB used in developing IFRS 19 and agreed to follow in maintaining the standard. These principles identify information users of financial statements of companies without public accountability are particularly interested in and include:

Liquidity and solvency;
Short-term cash flows, obligations, commitments and contingencies;
Measurement uncertainty;
Disaggregation of amounts; and
Accounting policy choices.

IFRS 19 is expected to be effective for annual reporting periods beginning on or after 1 January 2027, with early application permitted. The IASB has tentatively decided that the amendments resulting from the ED will have the same effective date as IFRS 19.

Scope of the project

The ED proposes amendments to IFRS 19 in relation to:

IAS 7 Statement of Cash flows, as amended by Supplier Finance Arrangements;
IAS 12 Income Taxes, as amended by International Tax Reform—Pillar Two Model Rules;
IAS 21The Effects of Changes in Foreign Exchange Rates, as amended by Lack of Exchangeability; and
IFRS 18 Presentation and Disclosure in Financial Statements, including amendments introduced by Non-current Liabilities with Covenants (Amendments to IAS 1) which was carried forward to IFRS 18.

The ED is consulting on the disclosure requirements in the Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7) issued on 30 May 2024 that included consequential amendments to IFRS 19.

In addition, the ED is consulting on the disclosure requirements for eligible subsidiaries in the forthcoming IFRS Accounting Standard Regulatory Assets and Regulatory Liabilities (RARL standard). The IASB is expected to issue the RARL standard in 2025.

UKEB Outreach

The UKEB outreach on this project has included discussions with targeted preparers and users including UKEB advisory groups and public consultation on the UKEB’s Draft Comment Letter.

UKEB Draft Comment Letter

The UKEB published its Draft Comment Letter (DCL) on 25 September 2024 for public consultation. The comment period from 25 September 2024 to 11 November 2024 is now closed. Thank you for responding.

The final comment letter will be presented at the UKEB’s 28 November 2024 meeting.

UKEB Meetings

Meeting(s) related to the project are as follows:

October 2023 IASB General Update: Introduction to the ED (para G6-G10)
December 2023 IASB General Update: Scope of the ED (para F7-F8)
February 2024 IASB General Update: ED proposals—Supplier Finance Arrangements, International Tax Reform—Pillar Two Model Rules and Lack of Exchangeability (para G8-G12)
March 2024 IASB General Update: ED proposals—Amendments to IFRS 9 and IFRS 7 (para F2-F13)
April 2024 IASB General Update: ED proposals—IFRS 18 (para B6-B23) and RARL standard (para B24 – B32)
May 2024 IASB General Update: Effective date, transition and Due process (para G1-G13)
June 2024: Project Initiation Plan (see below)
September 2024: Draft Comment Letter (see version published for public consultation below)