IASB ED/2021/7

  • For-profit

IASB proposes reduced disclosure requirements for eligible subsidiaries

The IASB has issued for comment ED/2021/7 Subsidiaries without Public Accountability: Disclosures (the ED). This is a proposed new IFRS Standard that would permit eligible subsidiaries to apply IFRS Standards with a reduced set of disclosure requirements (i.e. the recognition, measurement and presentation requirements would stay the same).

The proposals respond to feedback received from stakeholders that complying with the full disclosure requirements in the IFRS Standards is not useful for subsidiaries, when their parent company prepares consolidated financial statements in compliance with IFRS Standards.

The proposals are designed to ease the financial reporting requirements for eligible subsidiaries while meeting the needs of users of their financial statements. An eligible subsidiary is one which does not have public accountability – companies that are not financial institutions or listed on a stock exchange – whose parent company prepares consolidated financial statements applying IFRS Standards.

When developing the proposals in the ED, the IASB started with the disclosure requirements in the IFRS for SMEs Standard. Where there is no difference in the recognition and measurement requirements between IFRS Standards and the IFRS for SMEs Standard, the disclosure requirements in the IFRS for SMEs Standard were used, but with the terms and language aligned with IFRS Standards and paragraph cross-references updated. Where there is a difference in the recognition and measurement requirements between IFRS Standards and the IFRS for SMEs Standard, the disclosure requirements in IFRS Standards were tailored by applying the principles used to develop the disclosure requirements in the IFRS for SMEs Standard.

Although the IFRS for SMEs Standard is not used in New Zealand, the New Zealand Accounting Standards Board (NZASB) plans to consider the appropriateness of the proposed disclosure requirements for Tier 2 for-profit entities once the IASB has completed this project. Any changes to the Reduced Disclosure Requirements (RDR) for Tier 2 for-profit entities will be consulted on separately.

We are currently preparing a comparison of the proposals in the ED with the current disclosure requirements for Tier 2 for-profit entities. This comparison will be available on our website in the near future.

Based on the current New Zealand Financial Reporting Framework, we do not expect that a new IFRS Standard on the disclosure requirements for Subsidiaries without Public Accountability will be incorporated into NZ IFRS.

The IASB is seeking feedback on the objective and scope of the proposals, the approach taken to the proposed disclosure requirements and the proposed disclosure requirements.


Commenting on the Proposals

The NZASB encourages you to read the Exposure Draft and to comment on the proposals. 

The deadline for comments to the NZASB is 12 November 2021 and to the IASB is 31 January 2022.

Send your comments—both formal and informal—to the NZASB using the upload form below.

We also encourage you to send comments directly to the IASB, with a copy to the NZASB. Your comments can be made electronically to the IASB website by clicking on the following link https://www.ifrs.org/projects/open-for-comment/. First-time users must register to submit electronically.


Upload your submission here

Please use this secure online form.

It has been designed to make your upload safe, quick and easy. 

You can:

  • Upload an MS Word document (and a PDF file, if you wish); or
  • Write your comments below in the space provided.

You can upload up to TWO documents. 

Please note:

  • We would appreciate receiving a copy of your comments in electronic form (preferably Microsoft Word format).  This helps us to more efficiently collate and analyse comments. If relevant, please also specify the exposure draft number and title in your electronic file. 

  • Tell us on whose behalf you are making the comments (for example on behalf of a group or an entity).

  • We intend publishing all comments on the XRB website, unless they may be defamatory. If you have any objection to this, we will not publish them. However, they will remain subject to the Official Information Act 1982 and, therefore, may be released in part or in full. The Privacy Act 1993 also applies.

  • If you have an objection to the release of any information contained in your comments, we would appreciate you identifying the parts of your comments to be withheld, and the grounds under the Official Information Act 1982 for doing so (for example, that it would be likely to unfairly prejudice the commercial position of the person providing the information).