5 IFRS 19 Subsidiaries without Public Accountability Disclosures

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15 July 2025 Agenda Paper 5 OFFICIAL - PUBLIC

Executive Summary

Project Stage	Research / Pipeline	Discussion paper	Redeliberation	Exposure Draft	Redeliberation	Final standard	Post Implementation Review
IASB
UKEB	Research / Influencing	Research / Influencing	Monitoring	Influencing	Monitoring	Endorsement	Influencing

Project Type: Endorsement Project Scope: Moderate

Purpose of the paper

The purpose of this paper is to:

Provide the Board with a proposed Project Initiation Plan (PIP) for the project to assess whether to adopt, for use in the UK, the Amended Standard IFRS 19 Subsidiaries without Public Accountability Disclosures.
Request the Board's approval to publish the PIP on the UKEB website.
Present 'An overview of the UK Accounting Framework and overarching differences between IFRS 19 and FRS 101'(Annex 1 of the PIP) and obtain Board approval to publish the overview on the project webpage.

Summary of the Issue

The International Accounting Standards Board (IASB) issued IFRS 19 in May 2024. The Amendments to IFRS 19 are expected to be published in August 2025. IFRS 19, including the Amendments (the Amended Standard), is effective for reporting periods commencing on or after 1 January 2027, with early adoption permitted. The UKEB's statutory functions mean that it must assess the Amended Standard against the statutory adoption criteria before deciding whether to adopt it for use in the UK. The UKEB's process aims to ensure the assessment of the Amended Standard is completed ahead of the effective date of 1 January 2027, to provide clarity to stakeholders.

Decision for the Board

Does the UKEB agree with the nature and extent of activities in the proposed proportionate project plan?
Subject to any changes identified at this meeting, does the UKEB approve the Project Initiation Plan for the project to assess the Amended Standard for adoption for use in the UK?
Does the UKEB approve the publication of Annex 1 of the Project Initiation Plan 'An overview of the UK Accounting Framework and overarching differences between IFRS 19 and FRS 101'on the project webpage?

Recommendation

We recommend the Board approves the PIP and publication of Annex 1 on the project webpage.

Appendix

Appendix A Draft Project Initiation Plan including Annex 1

Appendix A: Draft Project Initiation Plan—IFRS 19 Subsidiaries without Public Accountability: Disclosures

Purpose

A1This paper sets out the plan to assess whether to adopt, for use in the UK[^1], as a single package (together 'the Amended Standard'):

IFRS 19 Subsidiaries without Public Accountability: Disclosures (paragraphs A5-A9);
the forthcoming amendments to IFRS 19 ('the Amendments') (paragraphs A10-A12); and
issued consequential amendments to IFRS 19[^2] (paragraph A13).

A2IFRS 19 was issued by the International Accounting Standards Board (IASB) in May 2024. The IASB is expected to issue the Amendments in August 2025. The Amended Standard will be effective for annual reporting periods beginning on or after 1 January 2027, with early application permitted.

A3The UKEB's statutory functions mean that the Board must assess the requirements in the Amended Standard against the statutory adoption criteria before deciding whether to adopt it for use in the UK.

A4This Project Initiation Plan (PIP) is presented to the UKEB ahead of the publication of the Amendments by the IASB. The UKEB has been considering the IASB's tentative decisions in relation to the Amendments and the assessment will incorporate those decisions[^3]. This PIP proposes publication of the Draft Endorsement Criteria Assessment (DECA) for consultation, after the Amendments are issued.

Background

Development of IFRS 19

A5IFRS 19 is a result of the IASB's Disclosure Initiative, a set of projects aiming to improve the effectiveness of financial statement disclosures.

A6The Subsidiaries without Public Accountability: Disclosures project was added to the IASB's research agenda in May 2016, following its 2015 Agenda Consultation[^4]. Stakeholders had requested that eligible subsidiaries, in particular, be permitted to apply IFRS Accounting Standards with reduced disclosure requirements. In January 2020, the project was added to the IASB's active standard-setting projects.

A7The IASB's proposals were set out in Exposure Draft ED/2021/7 Subsidiaries without Public Accountability: Disclosures (ED), published in July 2021. The UKEB submitted its Final Comment Letter (FCL) on the ED to the IASB, on 23 February 2022, following public consultation. The UKEB's feedback statement summarises the outreach work undertaken, stakeholder views, and the final position on the ED proposals.

A8The IASB received 68 comment letters in response to the ED. It conducted additional stakeholder outreach during the finalisation of IFRS 19[^5]. Annex 2, of this paper, provides a summary of the main changes made by the IASB in its redeliberations on the ED proposals, which took place between April 2022 and June 2023.

A9Consistent with paragraphs 4.18–4.19 of the UKEB's Due Process Handbook, the Board has received regular progress reports on the Subsidiaries without Public Accountability: Disclosures project since the ED was published, including updates of tentative decisions made by the IASB, commentary on how those decisions changed the ED proposals, and also on consistency with the UKEB's comments[^6].

Forthcoming Amendments to IFRS 19

A10IFRS 19, as issued in May 2024, included reduced disclosure requirements for IFRS Accounting Standards issued before 28 February 2021[^7].

A11The IASB published the Exposure Draft Amendments to IFRS 19 (ED) on 30 July 2024. The Amendments proposed reductions to disclosure requirements for new or amended IFRS Accounting Standards issued between 28 February 2021 and May 2024. The UKEB submitted its Final Comment Letter (FCL) on the ED to the IASB, on 28 November 2024, following public consultation. The UKEB's feedback statement (published in November 2024) summarises the outreach work undertaken, stakeholder views, and the final position on the ED proposals.

A12The IASB received 33 comment letters in response to the ED. The IASB redeliberated the ED proposals in the ED in January and February 2025 and indicated its intention to publish the final Amendments in Q3 2025.

Consequential amendments to IFRS 19

A13In addition to the forthcoming Amendments, the IASB has issued consequential amendments to IFRS 19, in the following amendments to IFRS Accounting Standards:

Amendments to IFRS 9 and IFRS 7 – Amendments to the Classification and Measurement of Financial Instruments, issued in May 2024; and
Amendments to IFRS 9 and IFRS 7 – Contracts Referencing Nature-dependent Electricity, issued in December 2024.

Description of the main requirements in IFRS 19

A14A description of the main requirements in IFRS 19 and of their expected effects is presented in the table below.

Requirements in IFRS 19	Expected effects
Scope	IFRS 19 is a voluntary standard, restricted to subsidiaries that do not have public accountability.
	IFRS 19 will:
	- Provide a reduced disclosure framework under IFRS Accounting Standards.
	- Permit UK eligible subsidiaries to prepare IAS accounts with reduced disclosures.

Requirements in IFRS 19		Expected effects
Definition of public accountability	An entity has public accountability if:	The IFRS 19 definition of public accountability:
	- its debt or equity instruments are traded in a public market; or	- Is different from the definition of Public Interest Entity (PIE) in the Companies Act 2006. UK Government is also considering expanding the current definition.
	- it holds assets entrusted to it by its customers (i.e. in a fiduciary capacity).	- Might lead to a UK PIE being eligible to apply IFRS 19.
Disclosure requirements	IFRS 19 is a disclosure-only standard. An eligible subsidiary that applies the Standard does so by applying the recognition, measurement and presentation requirements in other IFRS Accounting Standards and the reduced disclosure requirements in IFRS 19.	The reduced disclosures will:
		- Reduce costs for eligible subsidiaries in preparing general purpose financial statements.
		- Eliminate those disclosures that go beyond the needs of users of eligible subsidiaries' financial statements, by removing "clutter”.
Statement of compliance	IFRS 19 is part of IFRS Accounting Standards. An eligible subsidiary applying IFRS 19 asserts its compliance with IFRS Accounting Standards and states that it has applied IFRS 19.	The statement of compliance will:
		- Clarify that the subsidiary's financial statements have been prepared under IFRS 19.
		- Make it easier for users to compare financial statements.

Project plan

A15The Secretariat recommends the project plan shown below. The factors considered are described in paragraphs A16 to A38. A timeline for the key project milestones is presented in paragraph A38.

| Proposed activities | | | DPH 6.30-6.48 |

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