ASCG comments on IASB ED/2024/5 Amendments to IFRS 19

On 18 November 2024, the ASCG submitted their comment letter on the IASB ED/2024/5 Amendments to IFRS 19 to the IASB.

In this Exposure Draft, the IASB proposed amendments to the disclosure requirements for subsidiaries without public accountability in relation to new or amended IFRS Accounting Standards published by the IASB between 28 February 2021 and 1 May 2024 (we reported).

In our comment letter, we support the proposed amendments. In particular, the ASCG welcomes the fact that the IASB is proposing simplifications for subsidiaries shortly after the amendments to the IFRS Accounting Standards, so that eligible subsidiaries can benefit from the reduced disclosure requirements from the first-time application of IFRS 19. Accordingly, the ASCG generally agrees with the proposed amendments.

Notwithstanding our general support, we note that, as a result, a significant number of disclosure requirements were included in IFRS 19. Given that the objective of IFRS 19 is to save costs for preparers, however, a greater reduction in the disclosure requirements for subsidiaries would have been desirable. Therefore, the ASCG recommends the IASB reconsider its approach to the maintaining IFRS 19 and, when developing the reduced disclosure requirements, engage further with users of the financial statements of eligible subsidiaries (e.g. by establishing a dedicated consultative group).

Regarding the IASB’s decision not to propose reduced disclosure requirements relating to regulatory assets and regulatory liabilities, we do not agree with the IASB’s decision, nor its reasoning for that decision. In our view, it does not appear conceptually convincing that the full disclosures for subsidiaries should be necessary due to the introduction of a new accounting concept. Rather, we believe that from a preparer’s perspective it is more appropriate to provide reductions for subsidiaries from the outset so that subsidiaries do not incur high implementation costs for gathering data to comply with disclosure requirements that could be reduced in the future. In our comment letter, we therefore recommend the IASB revisit its decision not to propose reduced disclosure requirements for the prospective Standard on Regulatory Assets and Regulatory Liabilities and suggest the IASB reconsider reducing disclosure requirements on regulatory assets and regulatory liabilities once the final IFRS Accounting Standard has been published.