Response 5 - KPMG

KPMG LLP Audit 15 Canada Square London E14 5GL United Kingdom Tel +44 (0) 20 7311 1000

Paul Lee Chair UK Endorsement Board 13th Floor 1 Harbour Exchange London E14 9GE

Our ref PT/CWA/RA

By email to: [email protected]

24 February 2026

Dear Mr. Lee

KPMG in the UK (“we”) welcome the opportunity to respond to the UK Endorsement Board's (UKEB) invitation to comment on the Draft Endorsement Criteria Assessment (“DECA”) of IFRS 19.

We are supportive of eligible entities in the UK having the option to apply IFRS 19. However, we believe that further clarification is required for entities to be able to assess whether they can apply the standard.

IFRS 19 paragraph 7(c) requires that, for a subsidiary to be eligible to apply IFRS 19, its ultimate parent or intermediate parent must ‘prepare consolidated financial statements that comply with IFRS Accounting Standards'. A strict reading of this would limit eligibility to those subsidiaries with a parent that prepares consolidated accounts in accordance with IASB-IFRS. However, from our discussions to date, we understand that a broader reading is expected, to include frameworks similar to IFRS.

For example, para 1.13 of the DECA notes that "In the UK, IFRS 19 could be adopted by: a) UK-registered subsidiaries of UK group companies”. UK group companies would be required to prepare consolidated accounts in accordance with UK-adopted IFRS, and whilst they may also be able to give a statement of compliance with IASB-IFRS, in most cases they won't (currently) do that explicitly.

Our concern is the legal basis for any broader reading of "IFRS Accounting Standards" (beyond IASB-IFRS) and how such a reading could be achieved. Which other IFRS-based frameworks would be acceptable and on what basis?

For example, we have discussed whether the broader reading of "IFRS Accounting Standards" might be limited to frameworks where a dual compliance statement (i.e. an IASB-IFRS compliance statement, as well as an adopted-IFRS compliance statement) can be given. In that case, would the parent's consolidated accounts need to include an explicit IASB-IFRS compliance statement, or would it be sufficient that they could have done so? If the latter, how would the Directors of the subsidiary satisfy themselves that UK-IFRS 19 is available to them? Would it be sufficient for the subsidiary directors to obtain a statement to that effect from the Directors of the parent?

We would look to the UKEB to provide guidance on the application of IFRS 19 para 7(c) in the UK (appreciating that it is not within your remit to make changes to IFRS 19 itself). This guidance would need to be applied by UK subsidiaries with parent companies, both in the UK and overseas, that prepare financial statements under a locally-adopted IFRS framework (e.g. a parent applying UK-IFRS, EU-IFRS or IFRS-based Australian Accounting Standards).

To reiterate, we are supportive of eligible entities in the UK having the option to apply IFRS 19. However, we do think further guidance in relation to the application of para 7(c) is needed from the UKEB to assist companies in assessing their eligibility.

Yours sincerely

KPMG LLP

KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. Registered in England No OC301540 Registered office: 15 Canada Square, London, E14 5GL For full details of our professional regulation please refer to 'Regulatory information' under 'About' at www.kpmg.com/uk