IASB proposes ED/2021/7: Subsidiaries without Public Accountability: Disclosures

On 26 July 2021, the IASB has published for public comment the Exposure Draft ED/2021/7 Subsidiaries without Public Accountability: Disclosures (further information).

In this Exposure Draft, the IASB proposes a new IFRS Standard that would permit companies without public accountability (i.e. companies that are not financial institutions or listed on a stock exchange) to apply IFRS Standards with a reduced set of disclosure requirements. The proposed IFRS Standard would be available to companies that are included as subsidiaries in consolidated financial statements applying IFRS Standards.

The proposed IFRS Standard aims to simplify the reporting of these subsidiaries while at the same time meeting the information needs of users of the financial statements.

“Even if the final IFRS Standard is endorsed into European Law, the scope of its application for German subsidiaries remains to be determined by the implementation of the IAS Regulation in the German Commercial Code. § 325 (2a) German Commercial Code currently only provides an exemption for the publication of separate financial statements prepared in accordance with IFRS, but does not exempt companies from preparing separate financial statements in accordance with German Commercial Code (HGB). With regard to foreign subsidiaries of a German groups, the legal requirements would have to be examined individually for each jurisdiction”, commented ASCG Vice President Prof Dr Sven Morich on the publication of the Exposure Draft.

The draft is available on the IASB website.

Comments can be submitted to the IASB until 31 January 2021.