CertIFR Course
Where have IFRS Standards been adopted?
In many countries, stock exchange listing requirements or national securities
legislation permit (or sometimes require) foreign companies that issue securities in
those countries to prepare their consolidated financial statements using IFRS
Standards.
Europe
Since 1 January 2005, all publicly listed companies in the European Union have
been required to prepare their financial statements in conformity with IFRS
Standards.
Australasia
In Australasia both Australia and New Zealand have adopted national standards
that are IFRS Standards-equivalents.
CertIFR Course
Where have IFRS Standards been adopted?
Africa
African countries are split between those that require the use of IFRS Standards,
those that permit their use and those that prohibit their use.
Countries that require the use IFRS Standards include South Africa, Ghana and
Kenya.
CertIFR Course
Where have IFRS Standards been adopted?
Asia
Hong Kong, and Malaysia have issued national standards that are identical to
IFRS Standards.
Singapore FRSs are converged with IFRS Standards with some minor exceptions.
Korea has translated IFRS Standards word for word to become Korean GAAP.
India allows IFRS Standards to be used in consolidated financial statements and
has developed Ind-AS which are similar to IFRS Standards.
In China IFRS Standards may not be applied, however Chinese Accounting
Standards are substantially converged and it is intended that remaining
differences will be eliminated over time.
Differences between Japanese GAAP and IFRS Standards have been reduced.
CertIFR Course
Where have IFRS Standards been adopted?
South America
Several South American economies require the use of IFRS Standards for
domestic listed companies. These include Brazil, Chile, Mexico and Ecuador.
Other countries, such as Argentina, require some listed companies to prepare
financial statements in accordance with IFRS Standards.
Bolivia and Paraguay allow but do not require the use of IFRS Standards for
domestic listed companies.
CertIFR Course
Where have IFRS Standards been adopted?
North America
Canada adopted IFRS Standards in full as Canadian FRSs with effect from 2011.
In the USA, domestic listed companies are not permitted to use IFRS Standards.
Although the US standard-setter FASB has recently worked on a number of
projects with the IASB and has publicly stated its commitment to IFRS Standards,
it is unlikely that the Securities and Exchange Commission will allow domestic
listed companies to use IFRS.
CertIFR Course
Growth of the IASB and IFRS Standards: a roadmap
Here is a brief list of the major developments that have marked the life of the IASB:
1973 : the IASC was founded by accountancy bodies from nine countries.
70-80 : The codifying of best practice, including many national options.
1989 : Publication of the first version of the Conceptual Framework.
1990 : Gradual adoption of IAS® Standards as national standards.
1993 : Ten revised standards, in force in 1995.
1994 : Adoption of IAS Standards by a number of continental companies for
consolidated statements.
1998 : Laws to permit use of IAS Standards in France, Germany and Italy and the
IASC passes last major core standard (IAS 39, financial instruments).
CertIFR Course
Growth of the IASB and IFRS Standards: a roadmap
1999 : IASC restructured, resulting in current IASB.
2000 : International Organisation of Securities Commissions (IOSCO) recommends
use of IAS Standards to its members.
2001 : European Commission presents legislation to require use of IASC Standards
for all listed companies no later than 2005.
Trustees bring new structure into effect - 1 April 2001 - and "IASB" assumes
responsibility for designated International Financial reporting Standards (IFRS
Standards).
2002 : The IASB meets (FASB). They conclude the Norwalk Agreement, to commit
the boards to work together to remove differences between IFRS Standards
and US GAAP.
CertIFR Course
Growth of the IASB and IFRS Standards: a roadmap
2004 : By issuing four IFRS Standards, two revised IAS Standards and an amendment
to the financial instruments standard by the end of March, the IASB complete
its “stable platform” for use by companies adopting its standards from
January 2005.
2005 : All member states of the EU required to use IFRS.
South Africa adopts IFRS Standards for all listed entities.
In Australia IFRS Standards required for all private sector reporting and as the
basis for public sector reporting.
2006 : IASB and FASB agree roadmap for convergence between IFRS Standards and
US GAAP.
China adopts accounting standards substantially in line with IFRS Standards.
CertIFR Course
Growth of the IASB and IFRS Standards: a roadmap
2007 : IFRS Standards permitted for foreign issuers in the US.
2010 : In Brazil IFRS Standards required for consolidated financial statements of
banks and listed companies.
Japan allows use of IFRS Standards for a number of international companies.
2011 : Republic of Korea adopt IFRS Standards.
In Canada required for all listed entities and permitted for private sector
entities including not-for-profit organisations.
2012 : IFRS Standards adopted by Russia, Mexico and Argentina.
2016 : It is now considered unlikely that IFRS Standards will be adopted by the US
SEC..
CertIFR Course
IFRS for Small and Medium-sized Entities (IFRS for SMEs)
Because full IFRS Standards were designed to meet the needs of investors in
public companies, they are very detailed and fairly burdensome to implement for
smaller companies.
In July 2009 the IASB published an International Financial Reporting Standard
(IFRS Standard) designed for use by small and medium-sized entities (SMEs)..
This Standard is designed for non-publicly accountable entities, meaning it
cannot be applied by listed comp
Other non-eligible companies include banks, insurance companies and securities
brokers/dealers.
SMEs are estimated to represent more than 95 per cent of all companies.
CertIFR Course
IFRS for Small and Medium-sized Entities (IFRS for SMEs)
The IFRS for SMEs Standard is reviewed periodically, with amendments made to
address issues arising in the Standard itself and reflect changes in IFRS
Standards.
The IFRS for SMEs Standard is available for any jurisdiction to adopt, whether or
not it has adopted full IFRS Standards.
The only restriction is that it may not be used by public entities or financial
institutions.
As at June 2015, 73 jurisdictions required or permitted use the IFRS for SMEs
Standard to be applied by eligible companies.
CertIFR Course
Frequently asked questions
1. Which national standards are closest to the IASB's?
Several countries have adopted IFRS Standards to be their own national standards,
without any modification. These countries include South Korea, Australia and Hong
Kong.
CertIFR Course
Frequently asked questions
2. Is it necessary to adhere to all requirements of IFRS Standards for financial
statements to state compliance?
Yes, in order to claim compliance with IFRS Standards, all the requirements of the
IFRS Standards must be met. There are no exceptions. Use of local GAAP and IFRS
Standards together is not allowed..
CertIFR Course
quick quiz
1 - Which of the following countries prohibits the use of IFRS Standards by domestic
listed companies?
A : Brazil
B : Russia
C : Australia
D : China
CertIFR Course
quick quiz
2 - Which of the following type(s) of entity is (are) eligible to use the IFRS for SMEs
Standard?
1. An unlisted bank
2. A listed company that meets size thresholds for a small entity
3. An unlisted company of any size.
A : 2 Only
B : 3 Only
C : 1 and 3
D : 2 and 3
CertIFR Course
quick quiz
3 - What is the Norwalk Agreement?
A : An agreement made between EU Countries to require domestic listed entities
to apply IFRS standards by 2005.
B : The agreement made by the IASB to adopt all IAS Standards issued by its
predecessor, the IASC.
C : An agreement made between IASB and FASB to work together to remove
differences between IFRS standards and US GAAP.
D : An agreement between IOSCO and the IASB to promote use of IFRS standards
to all companies listed on an international stock exchange.
CertIFR Course
quick quiz
4 - Which of the following statements is true?
A : The IFRS for SMEs may only be adopted by jurisdictions that have no national
standards.
B : The IFRS for SMEs was developed by the IASB based on a number of existing
national standards for SMEs.
C : The IFRS for SMEs may be adopted by any jurisdiction, regardless of whether it
has adopted full IFRS standards .
D : The IFRS for SMEs allows the same accounting options as full IFRS standards but
reduces level of required disclosures significantly.