Cheryl Linthicum, Associate Director at SEC Institute wrote this post.  You may want to check out the foreign private issuer workshops she and Gary Brown will be leading this year at https://www.pli.edu/programs/seci

IFRS 19, adopted in May 2024, permits financial statements of certain subsidiaries of reporting companies to provide reduced disclosures when applying recognition, measurement, and presentation requirements of IFRS.  On May 17, 2024, SEC Chief Accountant Paul Munter and Corporation Finance Division Director Erik Gerding issued a Statement for foreign private issuers (FPIs) to consider making additional disclosures when including financial statements that apply IFRS 19.

Foreign private issuers are permitted to file financial statements in accordance with either U.S. GAAP or IFRS as issued by the IASB.  A reporting FPI would not be allowed to apply IFRS 19.  However, it is possible in some situations, such as an acquisition of a subsidiary of another company where the subsidiary applies IFRS 19, that financial statements subject to the reduced disclosure requirements of IFRS 19 could be included in an SEC filing.

The SEC’s statement reminds foreign private issuers that in such a situation:

• • The scope of IFRS 19 is limited to entities that do not have public accountability;
  • There may be situations where financial statements that apply IFRS 19 are included in filings with the SEC;
  • In these situations, the staff believes that the requirements of IFRS 19 and the SEC’s disclosure requirements are likely to necessitate additional disclosure in financial statements filed with the SEC; and
  • SEC staff in the Office of the Chief Accountant and in the Division of Corporation Finance are committed to assisting registrants and are available for consultation.