Response 9 - Forvis Mazars

Deadline for completion of this Invitation to Comment:

Close of business, 26 February 2026

Please submit to: [email protected]

Introduction

The objective of this Invitation to Comment is to obtain input from stakeholders on the endorsement and adoption of IFRS 19 Subsidiaries without Public Accountability: Disclosures, published by the International Accounting Standards Board (IASB) in May 2024¹. IFRS 19 is a new voluntary reduced disclosure standard. It has an effective date of 1 January 2027 with earlier application permitted (subject to the UKEB's adoption for use in the UK). The information collected from this Invitation to Comment is intended to help with the endorsement assessment.

UK endorsement and adoption process

The requirements for UK adoption are set out in Statutory Instrument 2019/685².

The powers to formally adopt international accounting standards for use in the UK were delegated to the UK Endorsement Board in May 2021³.

Who should respond to this Invitation to Comment?

Stakeholders with an interest in the quality of accounts prepared in accordance with IFRS Accounting Standards.

How to respond to this Invitation to Comment

Please download this document, answer any questions on which you would like to provide views, and return it to [email protected] by close of business on 26 February 2026.

Brief responses to individual questions are welcome, as well as comprehensive responses to all questions.

Privacy and other policies

The data collected, through submitting this document, will be stored and processed by the UKEB. By submitting this document, you consent to the UKEB processing your data for the purposes of influencing the development of and adopting IFRS for use in the UK. For further information, please see our Privacy Statements and Notices and other Policies (e.g. Consultation Responses Policy and Data Protection Policy)⁴.

The UKEB's policy is to publish on its website all responses to formal consultations issued by the UKEB unless the respondent explicitly requests otherwise. A standard confidentiality statement in an e-mail message will not be regarded as a request for non-disclosure. If you do not wish your signature to be published, please provide the UKEB with an unsigned version of your submission. The UKEB prefers to publish responses that do not include a personal signature. Other than the name of the organisation/individual responding, information contained in the “Your Details” document will not be published. The UKEB does not edit personal information (such as telephone numbers, postal or e-mail addresses) from any other response document submitted; therefore, only information that you wish to be published should be submitted in such responses.

Assessment against endorsement criteria

Our draft assessment [tentatively] concludes that:

• IFRS 19 meets the criteria of relevance, reliability, understandability and comparability required of the financial information needed for making economic decisions and assessing the stewardship of management, as required by SI 2019/685 (see Regulation 7(1)(c));
• application of IFRS 19 is not contrary to the principle that an entity's accounts must give a true and fair view as required by SI 2019/685 (see Regulation 7(1)(a)); and
• that IFRS 19 is likely to be conducive to the long term public good in the UK, as required by SI 2019/685 (see Regulation 7(1)(b)), having considered:
  • whether it will generally improve the quality of financial reporting;
  • the costs and benefits that are likely to result from its use; and
  • whether it is likely to have an adverse effect on the economy of the UK, including on economic growth.

Our draft assessment also concludes that IFRS 19 is not likely to lead to a significant change in accounting practice and, therefore, does not meet the criteria for a post-implementation review under Regulation 11 in SI 2019/685.

Our assessment is set out in Sections 2–5 of the [Draft] ECA.

Questions

Technical accounting criteria assessment

1. Do you agree that the technical accounting criteria assessment considers the main key aspects? (please select one option)

Selected: No

2. Please include any comments you may have in response to question 1:

FRS 102 and FRS 101 include established and accepted disclosure requirements for entities that are also in scope of IFRS 19. On that basis the technical accounting criteria assessment could have compared the IFRS 19 disclosure requirements with those under FRS 101 and FRS 102. In as far as the disclosure requirements are the same or equivalent, IFRS 19 should meet the technical assessment criteria given FRS 101 and FRS 102 are permitted UK accounting frameworks. The assessment could then focus on the differences between the disclosure requirements.

3. Do you agree with the draft assessment of IFRS 19 against the technical accounting criteria? (please select one option)

Selected: No

4. Please include any comments you may have in response to question 3:

The technical criteria assessment focuses on the disclosure requirements of IFRS 19. However the scope requirements of IFRS 19 have not been analysed as part of the technical assessment, although as per paragraph BC 24 of the Basis for Conclusions on IFRS 19, the IASB is soliciting input from local authorities, like the UKEB, on widening the scope of IFRS 19.

Based on the definition of public accountability in IFRS 19, banks, insurance as well as investment entities will often be excluded from the scope of IFRS 19. We are supportive of the UKEB exploring the scope of IFRS 19 as part of the endorsement process. IFRS 19 could be an alternative accounting framework, especially for insurance entities, because they are ineligible to apply FRS 101. The UKEB should take into consideration that UK insurance entities were able to apply FRS 101, until IFRS 17 became effective. The FRC had to effectively exclude them from FRS 101 because of incompatibilities with the UK legal framework applicable under UK GAAP, but not because a reduced disclosure framework is unsuitable for these entities. In addition, IFRS 19 does not provide disclosure exemptions from IFRS 17 and insurance entities would be required to make all of the insurance contract related disclosures, but could benefit from the other disclosure exemptions in IFRS 19.

As a separate point, the DECA makes reference to IFRS 14, a standard not endorsed by the UKEB. It should be clarified in the UK EB endorsed version of IFRS 19, whether the IFRS 14 disclosure requirements are included or excluded from the standard.

UK long term public good assessment

5. Do you agree with the initial overall assessment of the costs likely to arise from the implementation of IFRS 19? (please select one option).

Selected: No

6. Please include any comments you may have in response to question 5 including, if applicable, any costs that may have been omitted from the analysis:

Intentionally left blank, including answer to question 5.

7. Do you agree with the initial overall assessment of the benefits likely to arise from the implementation of IFRS 19? (please select one option).

Selected: No

8. Please include any comments you may have in response to question 7 including, if applicable, any benefits that may have been omitted from the analysis:

Intentionally left blank, including answer to question 7.

9. Do you agree with the draft assessment that IFRS 19 is likely to be conducive to the long term public good in the UK? (please select one option)

Selected: No

10. Please include any comments you may have in response to question 9 including, if applicable, any economic effects that have been omitted from the analysis:

The schematic overview presented on page 17 of the Draft Endorsement Criteria assessment confirms that financial statements prepared in accordance with IFRS 19 are IAS accounts. It also indicates that there are two reporting frameworks for IAS accounts, (1) accounts prepared under UK adopted IAS and (2) accounts prepared under IFRS 19.

It is our understanding that financial statements prepared under IFRS 19 are accounts prepared in accordance with UK-adopted IAS under Sections 395 and 403 of the UK Companies Act, ie not only financial statements applying “full” IFRS are prepared in accordance with UK-adopted IAS, but also IFRS 19 compliant financial statements. We suggest the overview is amended accordingly.

We acknowledge stakeholder views stated in paragraphs 1.32 and 1.42 of the DECA, confirming that IFRS 19 will not add significant complexity to the UK accounting framework. We concur that the additional complexity is manageable, but we suggest that it is explored whether this complexity is needed. We note that user outreach by the UKEB indicates that stakeholders are satisfied sufficient information is provided under each of the three accounting frameworks for the entities in scope. We therefore suggest that the UKEB and FRC work together and consider alignment of disclosures, especially in IFRS 19 and FRS 101. Ideally the FRC and UKEB would reach the same conclusions in relation to disclosure exemptions provided under FRS 101 and IFRS 19, respectively in the future.

FRS 101 is a popular framework in the UK, and we believe it is unlikely that there is great appetite by entities to move to IFRS 19, especially because of the cash flow statement exemption in FRS 101. Should IFRS 19 be endorsed, there may not be many UK entities that would opt to adopt this new accounting standard. As such, we wonder whether its take up will be limited to UK intermediate companies that voluntarily prepare consolidated accounts, unless the UKEB were to widen the scope of IFRS 19 to include, for example UK insurance entities. Please refer to our response to Question 4 on this point.

11. In our [Draft] ECA, we described a set of users who may use the financial statements of subsidiaries without public accountability. Do you agree that the UKEB has not overlooked any user category that could be substantially affected by the reduced disclosure requirements of IFRS 19? (please select one option).

Selected: No

12. Please include any comments you may have in response to question 11:

Intentionally left blank

Company Law interaction

13. IFRS 19 provides a definition of “public accountability” to set the scope for a subsidiary's eligibility to voluntarily apply the Standard. The IFRS 19 definition differs from the definitions of “public interest entity” and “public interest company” set out in Part 16 of the Companies Act 2006, which relate to audit. As the definitions in the Act do not relate to reporting under UK-adopted international accounting standards, do you agree that this issue is not relevant to the UKEB's endorsement assessment of IFRS 19? Please see paras 19 – 21 of the [Draft] ECA Executive Summary for further detail.

Selected: No

14. If you disagree, please provide the rationale for your answer to question 13:

We agree that the definitions apply to different requirements. We therefore concur that it is possible to have different definitions. Nevertheless, it is our view that it is unhelpful to have multiple definitions in the law and accounting standards, capturing similar entities. It introduces complexity that is ideally avoided.

We acknowledge that definitions included in UK Company law are outside the remit of the UKEB, but we encourage collaboration between regulators and law makers to avoid complexity where this is unnecessary.

True and fair view assessment

15. Do you agree with the draft assessment that IFRS 19 is not contrary to the true and fair view requirement? (please select one option)

Selected: No

16. Please include any comments you may have in response to question 15:

Intentionally left blank

Is IFRS 19 likely to lead to a significant change in accounting practice?

17. Do you agree with the tentative assessment in the [Draft] ECA that IFRS 19 is not likely to lead to a significant change in accounting practice? (please select one option):

Selected: No

18. Please provide your rationale for the answer to Question 17—namely, the reasons for concluding whether or not IFRS 19 is likely to lead to a significant change in accounting practice:

As explained in our response to Q10 we do not believe that many UK entities will adopt IFRS 19, especially if the UKEB is not going to amend the scope of the standard.

Other comments

19. Do you have any other comments on the [Draft] ECA you would like to add?

No

Response generation

20. Did you/your organisation use a large language model (e.g. Chat GPT, Microsoft Copilot) to create any part of your/its response (response to this Invitation to Comment or a comment letter you are submitting as part of your response)?

Selected: No

21. If you answered yes to Question 20, please specify which model and what prompt(s) you used for the large language model.

Click or tap here to enter text.

Thank you for completing this Invitation to Comment

Please submit this document by close of business on 26 February 2026 to: [email protected]