Business groups with multiple subsidiaries often face the same recurring administrative burden: each subsidiary, even though its statements will eventually be consolidated into the parent, still has to prepare full disclosures under the applicable PSAK — even when the users are mostly just internal group stakeholders. PSAK 119: Subsidiaries without Public Accountability: Disclosures, ratified by DSAK IAI on August 27, 2025, is designed to address exactly this problem.
What PSAK 119 covers
PSAK 119 references IFRS 19 Subsidiaries without Public Accountability: Disclosures, issued by the IASB in May 2024. This standard does not change how a subsidiary recognizes and measures its transactions — that still follows other PSAKs as usual. What changes is purely the disclosure requirements, which are made far more concise compared to standard PSAKs.
How it works: substitution, not elimination
It's important to understand: PSAK 119 does not eliminate disclosure obligations outright. An eligible subsidiary applies the disclosure requirements in PSAK 119 in place of the disclosure requirements in other PSAKs — while for recognition and measurement aspects (as opposed to disclosure), the subsidiary continues to follow other PSAKs as usual. So what's trimmed is purely the "what needs to be told in the notes to the financial statements" part, not how the figures are calculated.
The choice to apply PSAK 119 is also not permanent — an entity that has elected to apply it in one reporting period may revoke that election in a subsequent period if circumstances change.
The November 2025 amendment: trimmed further
Less than three months after ratification, PSAK 119 was already amended on November 24, 2025, following the IFRS 19 amendment issued in August 2025. The main changes:
- Removes application in separate financial statements by an intermediate parent entity (making PSAK 119 more purely targeted at subsidiaries, not intermediate parents that also prepare separate statements).
- Removes several disclosure objectives related to supplier financing, currency inconvertibility, the Global Minimum Tax (Pillar Two) model, financial instrument classification and measurement, and long-term liabilities with covenants.
- Reduces supplier financing disclosure requirements, deemed overly detailed for non-public subsidiaries.
- Removes guidance material that isn't a mandatory requirement, to keep the standard concise and to the point.
- Replaces the MPM disclosure requirement (Management-defined Performance Measures) with a cross-reference to PSAK 118 — showing that these two new standards were indeed designed to connect with each other.
When it takes effect and who should pay attention
PSAK 119 and its amendment are effective January 1, 2027, with early application permitted. This standard is most relevant for:
- Business groups with layered parent-subsidiary structures, where the ultimate (or intermediate) parent prepares publicly available consolidated statements.
- Subsidiaries that have been preparing full financial statements purely for internal consolidation purposes, even though their actual user base is very limited.
- Business group accounting teams looking to cut the time spent preparing annual financial statements for each subsidiary without sacrificing information quality for consolidation.
What to prepare
- Map your business group's structure — identify which subsidiaries actually meet the "without public accountability" requirement with a parent that prepares SAK-compliant consolidated statements.
- Compare the current disclosure burden versus PSAK 119 for each subsidiary — the potential time and cost savings can be significant for large business groups.
- Discuss with the parent company whether the PSAK 119 election will be standardized across all subsidiaries or decided per entity.
- Remember the election is revocable — don't treat the decision to apply PSAK 119 as permanent and unreviewable each fiscal year.
For family-owned or corporate business groups with many subsidiaries, PSAK 119 has the potential to be one of the most directly beneficial new standards — cutting administrative burden without compromising the quality of consolidated statements seen by investors or lenders.
Disclaimer: This article was prepared as general information as of July 6, 2026 and does not constitute tax advice for any specific case. Tax regulations are subject to change. For guidance on your specific business situation, please consult the Sentary Consulting team or a registered tax consultant.