BC2 The International Accounting Standards Board (IASB) added the Subsidiaries without Public Accountability: Disclosures project to its research pipeline in response to feedback from stakeholders on the Request for Views - 2015 Agenda Consultation. These stakeholders - mainly preparers - asked the IASB to permit subsidiaries with a parent that applies IFRS Accounting Standards when producing its consolidated financial statements to apply IFRS Accounting Standards with reduced disclosure requirements. Many subsidiaries are eligible to apply the IFRS for SMEs® Accounting Standard for their general purpose financial statements. Subsidiaries applying that Standard are required to provide fewer disclosures than those applying IFRS Accounting Standards. However, many subsidiaries find applying the IFRS for SMEs Accounting Standard unappealing because they need to report to their parent amounts that comply with the recognition and measurement requirements in IFRS Accounting Standards so the parent can prepare its consolidated financial statements applying IFRS Accounting Standards. A subsidiary applying the IFRS for SMEs Accounting Standard would generally need to maintain additional accounting records because of the recognition and measurement differences between the requirements in that Standard and IFRS Accounting Standards.

BC3 Subsidiaries said they would prefer to use the recognition and measurement requirements in IFRS Accounting Standards but with reduced disclosure requirements. Stakeholders took the view that such an approach would eliminate unnecessary costs for many subsidiaries in preparing general purpose financial statements while ensuring users of those subsidiaries' financial statements obtain the information they need.