EFRAG publishes draft comment letter on IASB’s Exposure Draft Subsidiaries without Public Accountability: Disclosures

In July 2021, the IASB issued Exposure Draft Subsidiaries without Public Accountability: Disclosures that proposes to permit subsidiaries without public accountability to apply reduced disclosure requirements with the recognition, measurement and presentation requirements in IFRS Standards.

EFRAG has now published its draft comment letter on the Exposure Draft, in which EFRAG cautiously supports the proposed scope of the Exposure Draft. EFRAG also recognises that there is support for the alternative view expressed by Ms Françoise Flores in the Basis for Conclusions of the Exposure Draft.

EFRAG has raised some concerns and provided suggestions to the IASB such as:

• the key principles proposed by the IASB in paragraph BC33 of the Basis for Conclusions should encompass cost-benefit considerations;
• highlighting the risks of not considering the existing disclosure requirements in IFRS Standards in the light of BC157 in the Basis for Conclusions of the ED, when there are no recognition and measurement differences between IFRS for SMEs and IFRS Standards;
• the reasoning for the exceptions be improved;
• considering the interaction between the disclosure requirements of the ED and the disclosure requirements of the ED Disclosure Requirements in IFRS Standards – A Pilot Approach;
• considers that the application of a full set of disclosure requirements for IFRS 17 Insurance Contracts can be burdensome and costly for eligible subsidiaries; and
• suggests a number of additional disclosures that it considers relevant for users of financial statements. 

The draft comment letter may be accessed here and is open for comments up to 26 January 2022.