27 July 2021To:
Members of the Hong Kong Institute of CPAsAll other interested partiesINVITATION TO COMMENT ON IASB EXPOSURE DRAFTED/2021/7 Subsidiaries without Public Accountability: DisclosuresComments to be received by 17 December 2021The Financial Reporting Standards Committee (FRSC) of the Hong Kong Institute of Certified PublicAccountants (Institute) is seeking comments on the IASB Exposure Draft ED/2021/7 Subsidiarieswithout Public Accountability: Disclosures. The Exposure Draft (ED) is available on the Institute'swebsite:
https://www.hkicpa.org.hk/en/Standards-and-regulation/Standards/Open-for-comment-documents/fredThe International Accounting Standards Board (IASB) has proposed a new IFRS Standard that wouldpermit eligible subsidiaries to apply IFRS Standards with a reduced set of disclosure requirements.The proposals respond to feedback from stakeholders and are designed to ease financial reportingfor eligible subsidiaries while meeting the needs of the users of their financial statements.The proposed Standard would be available to subsidiaries without public accountability—companiesthat are not financial institutions or listed on a stock exchange—whose parent company preparesconsolidated financial statements applying IFRS Standards. These subsidiaries report to their parentcompany for consolidation purposes applying IFRS Standards. Electing to apply the proposedStandard would enable them to also use IFRS Standards when preparing their own financialstatements but with reduced disclosures.The proposals would save subsidiaries time and money by:
•eliminating the need to maintain an additional set of accounting records for reporting purposes—if the subsidiary currently does not apply IFRS Standards in its own financial statements; and•reducing the disclosures required to comply with IFRS Standards.The FRSC invites your comments on the ED by 17 December 2021 to allow your comments to beconsidered in developing its response to the IASB. Comments should be supported by specificreasoning and should be submitted in written form.Comments may be sent by mail, fax or e-mail to:
Standard Setting DepartmentHong Kong Institute of Certified Public Accountants37th Floor, Wu Chung House213 Queen’s Road EastWanchai, Hong KongFax number (+852) 2865 6776E-mail: commentletters@hkicpa.org.hkComments will be acknowledged and may be made available for public review unless otherwiserequested by the respondent.