International Accounting Standards Board (IASB)


Each country has its own legislation governing accounting and operation of limited companies; this local legislation varies considerably form country to country

ACCA will not require knowledge of local legislation for examination purposes rather it would require knowledge about (IASB) international accounting standard board which has issued a number of authoritative IASs and IFRS

The IASB was established in 2001 as part of International Accounting Standard Committee (IASC) Foundation.

The IASB was preceded by the board of IASC, which came into existence on June 29, 1973 as a result of an agreement by accountancy bodies in Australia, Canada, France, Germany, Japan, Mexico, the Netherlands, the United Kingdom and Ireland, and the United States of America. In 1982 the old IASC joined hands with the International Federation of Accountants (IFAC), which resulted in all the members of IFAC becoming members of IASC currently over 115 professional bodies in 85 countries are members of IASC.

Structure of IASB

  1. The IASB was established in 2001 as part of IASC Foundation. The governance of IASC Foundation rests with the Nineteen Trustees. The trusties appoint the members of the IASB and associated council. The Board comprises of twelve full-time and two part time members.
  2. The IASB has two advisory committees namely The International Financial Reporting Interpretations Committee (IFRIC) and Standard Advisory Council (SAC).


The objectives of IASB as set out in its Constitution are: –

  1. To formulate and publish in the public interest a single set of high quality, understandable and enforceable global accounting standards that require high quality, transparent and comparable information in financial statement and other financial reporting to help participants in the various capital markets of the world and other users of the information to make economic decisions.
  2. To promote the use and rigorous application of those standards.
  3. To work actively with national standard-setters to bring about convergence of national accounting standards and IFRSs to high quality.


A great many stock exchanges now accepts IFRS for cross boarder listing purposes when the shares of one company are listed on another country’s stock exchanges but Canada, USA and Japan are the exceptions. The IASB therefore, built a set of high quality standards aimed at more general acceptance of IFRS for cross border listings. This work was reviewed by the Technical Committee of the International Organization of Securities Commissions (IOSCO). On May 17, 2000 the IOSCO gave its qualified backing to 30 IFRS. This is a significant step towards global harmonization.

IASB and the EC/ Intergovernmental Bodies.

The European Commission has acknowledged the role of IASB in harmonization of world wide accounting rules and EC representatives has joined the IASB. The EC has also set a committee to investigate the difference between the EU norms and IFRS.

IASB and Professional Accountancy Bodies/IFAC

The IASB is closely connected with professional bodies through joining with IFAC. IFAC represents the worldwide accountancy professions.

The mission of IFAC is the development of accountancy profession to enable it to provide services of a consistently high quality in the public interest.

IFAC has recognized the IASB as the only body to issue IFRS worldwide.

IASB and National Standard Setting Bodies

The relationship of IASB with the national standard setting bodies has increased and IASB has tried to increase comparability between national standards and IFRS.

Scope and Application of IFRS


Any limitation of the applicability of a specific IFRS is made clear within that standard. IFRS are not applied to immaterial items, nor are they retrospective.

Application of IFRS

  1. Within each country the local regulations govern to a greater or lesser extent the issue of financial statements.
  2. The IASB concentrates on essentials when producing IFRS. This means that IASB tries not to make IFRS too complex, because otherwise they would be impossible to apply on a worldwide basis. Applicable to commercial, industrial or business enterprise
  3. The IFRS do not override local regulations on financial statements. Members of IASB should simply disclose the fact whether IFRS is complied in all material respects. The members of IASB in individual countries will attempt to persuade local authorities, where current regulations deviate from IFRS.

Working Procedure the IASB prepares in accordance with due process.

  • The staff is asked to identify and review all the issues associated with topic and to consider the application of the Framework to the issue
  • Study national standards and practice and exchange views about the issues with national standard setting bodies.
  • Consulting the SAC about the advisability of adding the topic to the IASB’s agenda.
  • Formation of an advisory group to give advice to the IASB on the project.
  • Publishing for public comment a discussion document.
  • Publishing for public comment an exposure draft approved by at least eight votes of the IASB, including any dissenting opinions held by the IASB members.
  • Publishing within an exposure draft a basis of conclusions.
  • Consideration of all comments received within the comment period on discussion documents and exposure drafts.
  • Consideration of desirability of holding a public hearing and of the desirability of conducting field tests and, if considered desirable, holding such hearings and conducting such tests.
  • Approval of a standard by at least eight votes of the IASB and inclusion in the published standard of any dissenting opinions.
  • Publishing within a standard a basis for conclusions, explaining among other things, the steps in the IASB’s due process and how the IASB dealt with public comments on the exposure draft.

Timing of application

IFRS apply from a date mentioned in the IFRS. The IFRS also sets out transitional provisions for their initial application.


The IFRS is issued in English language however; the members are authorized to issue the IAS in their own language. However, this fact should be disclosed in the standard


If the IAS’s are applied to financial statements, their comparability, creditability and usefulness will enhance though out the world.