SEC Releases Statement on Applying the Disclosure Requirements in IFRS 19 to SEC Filings

In a recent statement, SEC Chief Accountant Paul Munter and SEC Division of Corporation Finance Director Erik Gerding addressed application of the guidance in IFRS 19, Subsidiaries Without Public Accountability: Disclosures, to SEC filings. IFRS 19 “permits certain subsidiaries of reporting companies to provide reduced disclosures when applying recognition, measurement, and presentation requirements of IFRS Accounting Standards.”

The statement points out that even though IFRS 19’s scope “is limited to entities that do not have public accountability at the end of their financial statement reporting period,” SEC filings may include “financial statements that apply IFRS 19” in certain circumstances. For instance, the statement discusses a scenario in which “a foreign private issuer files documents with the SEC related to a merger with a foreign business that qualifies for and elects to apply IFRS 19, and the registrant is required to provide financial statements of the foreign business.” In such circumstances, “even though the foreign business may be eligible to and has elected to apply IFRS 19 in order to benefit from reduced disclosures, it should carefully consider whether it is nevertheless required to include additional material disclosures from other IFRS Accounting Standards to achieve the objectives of financial reporting given the use of those financial statements in a filing with the SEC.”