IFRS 18 & 19 HMT Update Autumn 2024
Get insights on the latest IFRS 18 & 19 updates by the International Accounting Standards Board, including presentation and disclosure requirements, effective dates, and implications for the Private Sector. Learn about IFRS 18 overview and IFRS 19 for Subsidiaries without Public Accountability Disclosures. Explore the planned timeline for implementation, upcoming consultations, and more presented at the Autumn 2024 meetings.
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Presentation Transcript
IFRS 18 & 19 HMT update To be presented at UPAG and RAWG meetings, Autumn 2024
IFRS 18 - Overview The International Accounting Standards Board (IASB) has issued IFRS 18 Presentation and Disclosure in Financial Statements, this is expected to be effective for accounting periods beginning on or after 1 January 2027 in the Private Sector. IFRS 18 specifies the format of the P&L to ensure more consistency between bodies. Income and expenses are to be categorised into the following five categories: operating, investing, financing, tax and discontinued operations. IFRS 18 requires entities to present various specified totals and sub- totals following this categorisation. These required totals and subtotals are as follows: operating profit or loss, profit or loss before financing and income tax and profit or loss for the year. IFRS 18 also requires that certain Management Performance Measures (MPM s) should be disclosed in the financial statements, these are figures meeting the following criteria: not required by IFRS, included in public communications, and communicate management's view of financial performance.
IFRS 19 - Overview The International Accounting Standards Board (IASB) has issued IFRS 19 Subsidiaries without Public Accountability Disclosures, this is expected to be effective for accounting periods beginning on or after 1 January 2027 in the Private Sector. IFRS 19 allows entities to apply reduced disclosure requirements as set out in the standard, rather than applying the disclosure requirements in other accounting standards. An entity may elect to apply IFRS 19 if the following criteria are met: it is a subsidiary, it does not have public accountability and it has an ultimate or intermediate parent that produces consolidated financial statements available for public use that complies with IFRS accounting standards. IFRS 19 is not yet endorsed in the UK. The UK Endorsement Board (UKEB) is undertaking research and preparatory work ahead of the endorsement project to adopt IFRS 19 for use in the UK. The UKEB plans to start the formal endorsement project in early 2025
HMT update Autumn 2024 We intend to bring a paper to the next Financial Reporting Advisory Board (FRAB) meeting in November, setting out an overview of the standards and our planned timeline for implementation of IFRS 18. Given IFRS 19 is not yet endorsed in the UK, the timeline for implementation of IFRS 19 is uncertain and will be presented to FRAB at a later date. Our intention is to start a consultation using existing forums (including engagement with UPAG and RAWG) to gather views on the potential impacts of IFRS 18 in the Public Sector. As we start to think about developing recommendations around IFRS 18, we would welcome initial thoughts from RAWG and UPAG. Anyone interested in getting involved is welcome to contact me directly at Sean.McCluskey@hmtreasury.gov.uk.
