SEC responds to new IFRS 19 standard
Last week the US Securities and Exchange Commission (SEC) provided a statement on the application of International Financial Reporting Standard (IFRS) 19, Subsidiaries without Public Accountability: Disclosures. The SEC’s guidance comes in response to the recent publication of IFRS 19 by the International Accounting Standards Board (IASB).
IFRS 19 allows certain subsidiaries to provide reduced disclosures while still adhering to IFRS requirements. However, the SEC emphasised that in filings with the SEC, these subsidiaries might need to provide additional disclosures to ensure investors receive adequate information for making informed decisions. This requirement stems from the principle that financial statements must not be misleading, resulting in the requirement for comprehensive disclosures.
Historically, the SEC has supported initiatives to reduce regulatory burdens on foreign private issuers while maintaining investor protection. The IASB’s IFRS 19 aims to streamline reporting for subsidiaries without public accountability, offering efficiency while preserving decision-useful information. The SEC acknowledges this effort but stresses that disclosures sufficient for non-public entities might not meet the needs of US investors, particularly in contexts such as mergers involving foreign private issuers.
For more details on the SEC’s response to IFRS 19, visit their official statement here.
