Unlisted subsidiaries set to breathe easy on disclosures
Delhi, Oct 30, 2025
ICAI considering new standard with lower disclosure requirements which saves time, costs
Unlisted subsidiaries of listed companies and other large businesses that follow globally harmonized Indian accounting standards will soon be less burdened with financial disclosures.
Accounting rule maker Institute of Chartered Accountants of India (ICAI) is considering a new standard that will lower the disclosure requirements of these entities, saving time and cost for them, president Charanjot Singh Nanda said.
The logic is that since the group parent already follows global best practices under Indian Accounting Standards (Ind AS) and consolidates the financials of these unlisted subsidiaries, there is a case for cutting down the elaborate and time-and-resource-intensive financial analysis that these subsidiaries with little public interest have to prepare.
To be eligible for the easier rules, these unlisted entities should not have taken any public deposits. The idea is to reduce the compliance burden on privately held group entities while maintaining group-level transparency through consolidated financials.
The relaxation will be part of ICAI’s proposed new accounting standard Ind AS 119, which is based on International Financial Reporting Standard (IFRS) 19. IFRS (19), which deals with disclosures of subsidiaries without public accountability, was issued by the International Accounting Standards Board (IASB) of IFRS Foundation last May and takes effect on 1 January 2027, Nanda said in response to queries from Mint.
India uses 39 accounting standards (Ind AS) that are aligned with IFRS (International Financial Reporting Standards), which are followed by publicly listed companies in over 140 countries. These deal with different aspects of preparing financial statements. Smaller companies in India follow older Indian accounting norms known as Generally Accepted Accounting Principles or GAAP.
“The draft of Ind AS 119 corresponding to IFRS 19 is under the consideration of ICAI’s accounting standards board,” said Nanda.
IFRS 19 specifies reduced disclosures instead of the requirements in other IFRS accounting standards for subsidiaries not having public accountability and where ultimate or any intermediate
parent is producing consolidated financial statements as per IFRS norms, said Nanda. The corresponding Indian version is being drafted, taking into account India’s requirements. In India, if a company has to follow Ind AS due to listing status or net-worth criteria, then its holding companies, subsidiaries, associates, and joint ventures must also prepare their financial statements using Ind AS, explained Nanda.
"The proposed Ind AS 119 enables eligible subsidiaries to make disclosures proportionate to the information needs of users of their financial statements,” said Nanda.
Experts said the move could benefit many Indian businesses, given that large corporations usually have several unlisted companies within the group.
Reliance Industries Ltd’s annual report for fiscal year 2025 (FY25) listed more than 60 private limited companies in India, including subsidiaries, associates and joint ventures, the accounts of which have been consolidated in the financial statements of the parent. This does not include any public limited yet unlisted companies. TCS listed about seven Indian unlisted subsidiaries in its FY25 consolidated financial statements.
“Ind AS 119, if adopted in India, will allow eligible subsidiaries—primarily unlisted subsidiaries of listed or large companies—to prepare their standalone financial statements with significantly reduced disclosure requirements,” said Samir Malik, partner, Grant Thornton Bharat, a professional services firm.
Malik added that adoption of Ind AS 119 would be impactful, "because there is reduction in disclosure requirements for accounting standards like Ind AS 107 (financial instruments: disclosures), Ind AS 115 (revenue from contracts with customers), Ind AS 103 (business combinations), Ind AS 108 (operating segments) and Ind AS 116 (leases) which are among the most time-consuming and resourceintensive in terms of disclosures."
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