Bookkeeping

IFRS changes calendar

Dates below are the IASB effective dates. In Pakistan, each standard or amendment applies once notified by the SECP, so confirm the notified date for your company.

IFRS 19: reduced disclosures for subsidiaries

IFRS 19 Subsidiaries without Public Accountability: Disclosures was issued in May 2024 and is effective for periods beginning on or after 1 January 2027, with early application permitted. It is optional.

Eligible subsidiaries keep full IFRS recognition and measurement but follow a much shorter set of disclosures. That cuts the cost of preparing subsidiary accounts without changing the numbers used in the group consolidation. In August 2025 the IASB amended IFRS 19 to add reduced disclosures for newer standards, including IFRS 18.

Who can use IFRS 19

A subsidiary is eligible if, at the end of its reporting period:

• it does not have public accountability, meaning its debt or equity is not publicly traded and it does not hold assets in a fiduciary capacity for a broad group of outsiders as a main business (such as a bank or insurer); and
• its ultimate or an intermediate parent produces consolidated IFRS financial statements that are available for public use.

This is most relevant to Pakistani subsidiaries of foreign groups, and to subsidiaries of Pakistani listed groups, that prepare full IFRS accounts for SECP filing. Whether IFRS 19 can be used for statutory accounts in Pakistan depends on SECP notification.

IAS 21: lack of exchangeability

Effective from 1 January 2025, IAS 21 explains how to assess whether a currency can be exchanged into another currency and, when it cannot, how to estimate a spot exchange rate that reflects market conditions. Companies must disclose the estimation approach, the risks and the effect on their financial statements. This matters for Pakistani exporters and groups with receivables, dividends or operations in countries with currency controls or long delays in remitting funds.

IFRS 9 and IFRS 7: classification and measurement amendments

Effective from 1 January 2026, these amendments:

• clarify when a financial liability is derecognised, with an option to treat liabilities settled through certain electronic payment systems as settled before the settlement date;
• clarify how to assess the contractual cash flows of loans with ESG-linked or other contingent features;
• clarify the treatment of non-recourse and contractually linked instruments;
• add disclosures for equity investments at fair value through other comprehensive income and for contingent features.

With Raast and other instant payment channels now widely used in Pakistan, the electronic payments option is worth reviewing with your auditors.

Contracts referencing nature-dependent electricity

Also effective from 1 January 2026, this amendment helps companies with renewable power purchase agreements apply the "own use" exemption and hedge accounting where supply depends on the weather. It is increasingly relevant as Pakistani manufacturers and textile exporters sign solar and wind supply contracts to cut energy costs.

Annual Improvements, Volume 11

Narrow amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10 and IAS 7, effective from 1 January 2026. They fix inconsistencies and are unlikely to have a major effect, but disclosures should be checked.

Pillar Two and deferred tax

Pakistan has not introduced global minimum tax rules, but many countries where parent groups are based have. Pakistani subsidiaries of groups with revenue of EUR 750 million or more may be asked for Pillar Two data, such as effective tax rate calculations, for the group's top-up tax returns. Under the IAS 12 amendments, groups apply a mandatory exception from recognising deferred tax on Pillar Two top-up taxes and disclose their exposure separately.

How Quantum Axis helps

We prepare IFRS financial statements for companies and groups, assess IFRS 19 eligibility, update disclosure checklists, prepare group reporting packs and support audit preparation for new standards.