IASC — International Accounting Standards Committee

International Accounting Standards: History and Objectives (IASC)

IASC - International Accounting Standards Committee

Let us make an in-depth study of the history and objectives of international accounting standards (IASC).

History of International Accounting Standards:

International Accounting Standards Committee (IASC) came into being on 29th June 1973 when 16 accounting bodies (viz. the Institute of Chartered Accountants from 9 nations, i.e., U.S.A., Canada, U.K. and Ireland, Australia, France, Germany, Japan, Mexico and Netherlands) signed the constitution for its formation.

Its headquarters is situated at London. The objectives of the International Accounting Standards Committee are to develop accounting standards which are to be observed in the presentation of audited financial Statements and to promote their worldwide acceptance.

Moreover, its other responsibility is to keep member bodies informed of the latest developments and standards by issuing exposure drafts from time to time. Needless to mention that the Institute of Chartered Accountants of India and the Institute of Cost and Works Accountants of India are members of the International Accounting Standards Committee.

In November 1982, a revised agreement and constitution were signed. According to the revised agreement and constitution, accountancy bodies which were associated members became the members of IASC and, in addition, other accountancy bodies may also become its members. Besides the countries already mentioned, four more countries — Italy, Nigeria, South Africa and Taiwan — are included.

Objectives of International Accounting Standards:

The objectives of IASC which are set out in its revised agreement and constitution are:

(i) To formulate and publish in the public interest accounting standards to be observed in the presentation of financial statements and to promote their worldwide acceptance and observation; and

(ii) To work for the improvement and harmonisation of regulation accounting standards and procedures relating to the presentation of financial statements.

In regard to the objective (i) stated above, i.e., worldwide acceptance and operation, this statement of Mr. J. L. Kirkpatrick, Chairman of the Board of IASC, delivered to the members of the Institute of Chartered Accountants, Ireland, is quite significant.

According to him “when we sit around the IASC Board table and in the steering committee which creates the standard, we do so in our capacity as experts in Accounting and certainly not as auditors. It is irrelevant whether we are practitioners or not”.

Therefore, the standards which are set by IASC are meant for universal acceptance.

However, IASC issued the following International Accounting Standards till to date:

IAS 1 — Disclosure of Accounting Policies.

IAS 2 — Valuation and Presentation of Inventories.

IAS 3 — Consolidated Financial Statements and the Equity Method of Accounting.

IAS 4 — Depreciation Accounting.

IAS 5 — Information to be disclosed in Financial Statements.

IAS 6 — Accounting Response to Changing Price.

IAS 7 — Statement of Changes in Financial Position.

IAS 8 — The Treatment on the Income Statement of usual Items.

IAS 9 — Accounting for Research and Development Activities.

IAS 10 – Contingencies and Events Occurring after Balance Sheet Date.

IAS 11 — Accounting for Construction Contracts.

IAS 12 — Accounting for Taxes and Income.

IAS 13 — Presentation of Current Assets and Current Liabilities.

IAS 14 — Reporting Financial Information by Segments.

IAS 15 — Information Reflecting the Effects of Changing Price.

IAS 16 — Accounting for Property, Plant, and Equipment.

IAS 17 — Accounting for Leaves.

IAS 18 — Revenue Recognition.

IAS 19 — Accounting for Retirement Benefits in the Financial Statement of Employee.

IAS 20 — Accounting for Govt. Grants and Disclosure of Govt. Assistance.

IAS 21 — Accounting for Effects of Changes in Foreign Exchange Rates.

IAS 22 — Accounting for Business Combinations.

IAS 23 — Capitalisations of Borrowing Costs.

IAS 24 — Disclosure of Related Party Transactions.

IAS 25 — Accounting for Investments.

IAS 26 — Accounting and Reporting by Retirement Benefit Plans.

IAS 27— Consolidated Financial Statements and Accounting for Investments in Subsidiaries.

IAS 28 — Accounting for Investment in Associates.

IAS 29 — Financial Reporting in Hyperinflationary Economics.

IAS 30 — Disclosure in the Financial Statements of Banks and Similar Financial Institutions.

IAS 31 — Financial Reporting of Interests in Joint Ventures.

IAS 32— Financial Instruments: Disclosure and Presentation.

IAS 33— Earning Per Share.

IAS 34— Interim Financial Reporting.

IAS 35— Discounting Operations.

IAS 36— Impairment of Assets.

IAS 37— Provisions, Contingent Liabilities and Contingent Assets.

IAS 38— Intangible Assets.

IAS 39 — Financial Instruments : Recognitions and Measurements.

IAS 40— Investment Property.

IAS 41 — Agriculture.

Moreover, The International Federation of Accountants (IFAC) which was held at the XI International Congress of Accountants in October 1977 had been set up in order to harmonise accounting, auditing and reporting practices in an area which will see growing interdependence of the commercial and industrial systems of the world.

In order to formalise their relationship, International Accounting Standard Committee (IASC) and International Federation of Accountants (IFAC) constituted a working group which has, in the meantime, issued a statement of ‘Mutual Commitments’. Practically, this statement, inter alia, accepts IASC as the sole body responsible for issuing pronouncements on international accounting standards. The Council of IFAC approved it on May 1981.

At regional level, “International Co-operation in Accountancy” was actually the theme of the Confederation of Asian and Pacific Accountants (CAPA) conference held in 1979 in recognition of the universality of accounting and the consolidation of efforts of accounting organisations throughout the world. Similarly, the Financial Accounting Standards Board (FASB) of USA has issued a number of Statements on conceptual framework for financial accounting and reporting in order to develop the respective standards.

In India, the Institute of Chartered Accountants of India (ICAI) constituted an Accounting Standards Board (ASB) in 1977 in order to:

(i) formulate accounting standards relating to applicable laws, customs, usages, business environment and IASC’s Standards.

(ii) persuade the related parties to follow the ASB’s Standards while preparing and presenting their financial statements.

Since 1977, ASB has been continuously using Account Standards.

Some authoritative statements had been issued on inflation accounting, viz., FASB’s Statement 33, Financial Reporting and Changing Price Issued in September 1979, and U.

K’s Statement of Standard Accounting Practice (SSAP 16 on Current Cost Accounting, issued in March 1980). On the basis of model SSAP 16, Bharat Heavy Electricals Ltd. (BHEL) and Tata Chemicals Ltd.

(TCL) had presented the supplemental current cost accounts in their respective annual reports of 1980-81.

Источник: https://www.yourarticlelibrary.com/accounting/accounting-standards/international-accounting-standards-history-and-objectives-iasc/68180

IASB , IASCF , IASC

IASC - International Accounting Standards Committee

The International Accounting Standards Board is an independent, private-sector body that develops and approves International Financial Reporting Standards. The IASB operates under the oversight of the International Financial Reporting Standards Foundation. The IASB was formed in 2001 to replace the International Accounting Standards Committee.

International Financial Reporting Standards Foundation

The International Financial Reporting Standards Foundation (until March 2010 known as the International Accounting Standards Committee Foundation) is the independent, non-profit foundation, created in 2000 to oversee the IASB. Click for more information about the IFRS Foundation Structure.

IASC: International Accounting Standards Committee

From 1973 until a comprehensive reorganisation in 2000, the structure for setting International Accounting Standards was known as the International Accounting Standards Committee. There was no actual “committee” of that name. The standard-setting board was known as the IASC Board.

Under the IFRS Foundation Constitution, the objectives of the IASB are:

  • (a) to develop, 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 statements and other financial reporting to help participants in the world’s capital markets and other users make economic decisions;
  • (b) to promote the use and rigorous application of those standards;
  • (c) in fulfilling the objectives associated with (a) and (b), to take account of, as appropriate, the special needs of small and medium-sized entities and emerging economies; and
  • (d) to bring about convergence of national accounting standards and International Accounting Standards and International Financial Reporting Standards to high quality solutions.

The International Accounting Standards Committee (IASC) – 1973-2000

It promulgated a substantial body of Standards, Interpretations, a Conceptual Framework, and other guidance that is adopted directly by many companies and that is looked to by many national accounting standard-setters in developing national accounting standards.

The International Accounting Standards Board (IASB) – Starting 2001

Since 2001, the standards-setting work of the IFRS Foundation is conducted by the International Accounting Standards Board (IASB). An IFRS Interpretations Committee(IFRIC) develops and solicits comment on interpretive guidance for applying Standards promulgated by the IASB, but the IASB must approve the Interpretations developed by IFRIC.

Under the IFRS Foundation Constitution, the IASB shall:

  • (a) have complete responsibility for all IASB technical matters including the preparation and issuing of International Accounting Standards, International Financial Reporting Standards and Exposure Drafts, each of which shall include any dissenting opinions, and final approval of Interpretations by the International Financial Reporting Interpretations Committee;
  • (b) publish an Exposure Draft on all projects and normally publish a discussion document for public comment on major projects;
  • (c) have full discretion in developing and pursuing the technical agenda of the IASB and over project assignments on technical matters: in organising the conduct of its work, the IASB may outsource detailed research or other work to national standard-setters or other organisations;
  • (d):
    • (i) establish procedures for reviewing comments made within a reasonable period on documents published for comment,
    • (ii) normally form working groups or other types of specialist advisory groups to give advice on major projects,
    • (iii) consult the Standards Advisory Council on major projects, agenda decisions and work priorities, and
    • (iv) normally issue bases for conclusions with International Accounting Standards, International Financial Reporting Standards, and Exposure Drafts;
  • (e) consider holding public hearings to discuss proposed standards, although there is no requirement to hold public hearings for every project;
  • (f) consider undertaking field tests (both in developed countries and in emerging markets) to ensure that proposed standards are practical and workable in all environments, although there is no requirement to undertake field tests for every project; and
  • (g) give reasons if it does not follow any of the non-mandatory procedures set out in (b), (d)(ii), d(iv), (e) and (f).

Distinction Between IASs and IFRSs

The term International Financial Reporting Standards (IFRSs) has both a narrow and a broad meaning.

Narrowly, IFRSs refers to the new numbered series of pronouncements that the IASB is issuing, as distinct from the International Accounting Standards (IASs) series issued by its predecessor.

More broadly, IFRSs refers to the entire body of IASB pronouncements, including standards and interpretations approved by the IASB and IASs and SIC interpretations approved by the predecessor International Accounting Standards Committee.

On this website, consistent with IASB policy, we abbreviate International Financial Reporting Standards (plural) as IFRSs and International Accounting Standards (plural) as IASs.

Compliance with IASB Standards

IAS 1.7 defines IFRSs as comprising:

  • International Financial Reporting Standards;
  • International Accounting Standards; and
  • Interpretations originated by the IFRS Interpretations Committee (IFRIC) or the former Standing Interpretations Committee (SIC).

Compliance with IFRSs

IAS 1.16 states:

“An entity whose financial statements comply with IFRSs shall make an explicit and unreserved statement of such compliance in the notes. Financial statements shall not be described as complying with IFRSs unless they comply with all the requirements of IFRSs.”

When a Standard or an Interpretation specifically applies to a transaction, other event, or condition, the accounting policy or policies applied to that item shall be determined by applying the Standard or Interpretation and considering any relevant Implementation Guidance issued by the IASB for the Standard or Interpretation. [IAS 8.7]

If a Standard or Interpretation does not address a specific transaction, event, or condition explicitly, IAS 8.10-12 requires:

10. In the absence of a Standard or an Interpretation that specifically applies to a transaction, other event, or condition, management shall use its judgement in developing and applying an accounting policy that results in information that is:

(a) relevant to the economic decision-making needs of users; and

(b) reliable, in that the financial statements:

(i) represent faithfully the financial position, financial performance and cash flows of the entity;(ii) reflect the economic substance of transactions, other events and conditions, and not merely the legal form;(iii) are neutral, ie free from bias;(iv) are prudent; and

(v) are complete in all material respects.

Источник: https://www.4gaccounts.com/iasb-international-accounting-standards-board-iascf-international-financial-reporting-standards-foundation-iasc-international-accounting-standards-committee/

International Accounting Standards Committee (IASC) Foundation

IASC - International Accounting Standards Committee

In this article we will discuss about the International Accounting Standards Committee (IASC) Foundation:- 1. History of IASC Foundation 2. Organization of the IASC Foundation 3. Relation with IOSCO.

History of IASC Foundation:

The IASC Foundation is an independent body, not controlled by any particular Government or professional organization. Its main purpose is to oversee the IASB in setting the accounting principles which are used by business and other organizations around the world concerned with financial reporting.

The IASC was formed in 1973 through an agreement made by professional accountancy bodies from Australia, Canada, France, Germany, Ireland, Japan, Mexico, the Netherlands, the UK and the USA.

In November 1999, the IASC board itself approved the constitutional changes necessary for its own restructuring. In May 2000, the IFAC unanimously approved the restructuring. The constitution of the old IASC was revised to reflect the new structure.

A new IASC Foundation was incorporated (under the laws of the US state of Delaware), and its trustee were appointed.

By early 2001, the members of the IASB and the SAC were appointed, and the new structure became operational. Later that year, the IASB moved into new quarters in London.

The technical staff of the IASB comprises over 20 accounting professionals—roughly quadruple the former IASC’s professional staff.

In this testimony before the US Senate Committee on Banking, Housing and Urban Affairs on 14 February, 2002 in Washington, Sir David Tweedie, Chairman of the International Accounting Standards Board, stated that an international standard setter was needed for four reasons:

1. There is a recognised and growing need for international accounting standards.

2. No individual standard setter has a monopoly on the best solutions to accounting problems.

3. No national standard setter is in a position to set accounting standards that can gain acceptance around the world.

4. There are many areas of financial reporting in which national standard setter finds it difficult to act alone.

The objectives of the IASB stated in its Constitution (2000) are:

(a) To develop 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 statements and other financial reporting to help participants in the world’s capital markets and other users make economic decisions;

(b) To promote the use and rigorous application of those standards; and

(c) To bring about convergence of national accounting standards and International Accounting Standards to high-quality solutions.

The IASC saw these objectives as giving a more precise focus to the objectives originally written in 1973 which were:

i. To formulate and publish in the public interest accounting standards to be observed in the presentation of financial statements and to promote their worldwide acceptance and observance; and

ii. To work generally for the improvement and harmonization of regulations, accounting standards and procedures relating to the presentation of financial statements.

In the words of Burggraaff a former Chairman of the International Accounting Standards Committee:

“IASC is a private sector professional exercise. It is meant to remain that way. Not because we feel that others should not be allowed to have a say in standard-setting; on the contrary, we feel that they too should be involved.

But it is our experience that only in the profession is there a sufficient body of common knowledge, expertise, independence and mutual understanding—all essential ingredients to achieve our goal; unbiased, workable standards that contribute to improved reliability and understandability of financial statements, world-wide”.

(1) Membership:

From 1983 the membership of IASC included all the professional accountancy bodies that were members of IFAC. Although IASC is older than IF AC by four years, the creation of IFAC brought into being a global structure from which IASC could obtain wider authority.

IASC retains its independence by having its own constitution that, from 2000, can be altered only by a meeting of the Trustees. Under the 2000 Constitution, the members cease to have a formal role in the decisions of the IASC Foundation.

(2) The Trustees:

From 2000, the governance of the IASC foundation rests with the Trustees. There are 19 trustees, initially appointed by a Nominating Committee but thereafter taking responsibility themselves for filling vacancies as these arise.

Trustees are required to show a firm commitment to the IASC as a high-quality global standard-setter, to be financially knowledgeable, and to have the ability to meet the time commitment expected.

Each Trustee must have an under-standing of, and be sensitive to, international issues relevant to the success of an international organization responsible for the development of high-quality global accounting standards for use in the world’s capital markets and by other users.

To ensure an adequate geographic representation it is required that six Trustees be appointed from North America, six from Europe, four from the Asia/Pacific region and three from any area, subject to overall geographic balance.

The appointment is for a term of three years, renewable once. They appoint the members of the IASB, the members of the Standing Interpretations Committee and the members of the Standards Advisory Council.

(3) The International Accounting Standards Boards (IASB):

From 2000, the IASB comprises 14 members, appointed by the Trustees. The foremost qualification for membership of the Board is technical expertise. The people chosen represent the best available combination of technical skills and background experience of relevant international business and market conditions.

The selection is not geographical representation. The idea of balance requires at least five to have a background as practising auditors, at least three to have a background in the preparation of financial statements, at least three a background as users of financial statements, and at least one an academic background. The IASB’s Governance structure is given in Fig. 15.1.

Publication of an exposure draft, standard or interpretation requires approval by eight of the fourteen members of the Board.

Other matters require a simple majority of those present, subject to 60% attendance either in person or by telecommunications link.

Up to the end of 2000, the IASC Board issued International Accounting Standards (IASs). From 2001, the IASB issues International Financial Reporting Standards (IFRSs).

(4) Standing Interpretation Committee (SIC):

For many years, the publication of the IAS was the final stage of the process. In 1995, it was agreed that it would be desirable to have interpretations giving additional rulings on particular aspects of the standards.

This would be an important aspect of ensuring the acceptance of IASs by the regulators of securities exchanges. The work of preparing these interpretations is in the hands of the Standing Interpretations Committee (SIC).

Interpretations issued by the SIC are approved by the IASB and arc part of the IASC’s authoritative literature. The objective of the SIC is to enhance the rigorous application and worldwide comparability of financial statements that are prepared using IAS by interpreting potentially contentions accounting issues.

The SIC has been reconstituted in December 2001 and renamed as the International Financial Reporting Interpretations Committee (IFRIC).

It reviews on a timely basis within the context of existing International Accounting Standards and the IASB Framework, accounting issues that are ly to receive divergent or unacceptable treatment in the absence of authoritative guidance, with a view to reaching consensus as to the appropriate accounting treatment.

In developing interpretations, the IFRIC works closely with similar national committees. The IFRIC meets about every two months. All technical decisions are taken at sessions that are open to public observations.

(5) Enforcement of IASs:

The power of enforcement has diminished over time. When the IASC was founded its members agreed to use their best endeavors and persuasive influence to ensure compliance with the standards.

It was intended that each professional accounting association within the IASC would ensure that the external auditors would satisfy themselves as to observance of the standards and would disclose cases of non-compliance; appropriate action was to be taken against any auditor who did not follow these recommendations.

Later, revised wording of the agreement among members acknowledged that LASC pronouncements would not override the standards followed by individual countries. By 1982, the agreement no longer contained the requirement that the auditors should disclose the extent of non-compliance.

The failure of the agreement to make any mention of obligations placed on auditors continues; the route to enforcement has now moved in the direction of applying the powers of national stock exchanges which subscribe to the IOSCO agreement on the acceptance of core standards.

(6) Intergovernmental Organizations:

IASB works closely with a number of intergovernmental bodies.

These bodies co-operate with each other and with IASB. Such bodies are:

Intergovernmental Organizations, 2001:

EU – European Union:

European Commission issues Directives which form a basis for national law within each member country. Accounting Directives (Fourth and Seventh) are largely concerned with harmonisation of presentation in financial statements.

OECD:

Organization for Economic Cooperation and Development:

Established by 24 of the world’s ‘developed’ countries to promote world trade and global economic growth. Is concerned with financial reporting by multinational companies. OECD has a Working Group on Accounting Standards.

Issues guidelines for multinational companies, carries out surveys and publishes reports. Work extends to Central and Eastern Europe, e.g., the Coordinating Council on Accounting Methodology in the CIS (Former Soviet Union).

ISAR:

Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting:

Operates within the United Nations, with a particular interest in accounting and reporting issues of the developing countries. Carries out surveys and publishes reports. Makes recommendations with regard to transnational companies.

Relations of IASC with IOSCO:

In this present form IOSCO dates from the mid-1980s. Its objectives include:

i. The establishment of standards and effective surveillance of international securities transactions

ii. Provision of mutual assistance to ensure the integrity of the markets by a rigorous application of standards and by effective enforcement against offenders.

A working party was established to co-operate with the IASC with a view to identifying accounting standards which security regulators might be ready to accept in the case of multinational offerings. In 1995, the IASC made a significant agreement with IOSCO.

The agreement stated that the goal of both IASC and IOSCO was that financial statements prepared in accordance with IASs can be used in cross-border offerings and listings as an alternative to national accounting standards.

In May 2000, IOSCO announced completion of its assessment of the accounting standards issued by the IASC. The Presidents Committee of IOSCO referred to the 30 standards and related interpretations evaluated by them (described as ‘the IASC 2000 standards’).

It recommended that IOSCO members permit incoming multinational issuers to use the IASC 2000 standards to prepare their financial statements for cross-border offerings and listings, as supplemented where necessary by one or more of three supplemental treatments of reconciliation, disclosure and interpretation.

i. Reconciliation means requiring reconciliation of certain items to show the effect of applying a different accounting method, in contrast with the method applied under IASC standards.

ii. Disclosure means requiring additional disclosures, either in the presentation of the financial statements or in the footnotes.

iii. Interpretation means specifying the use of a particular alternative provided in an IASC standard, or a particular interpretation in cases where the IASC standard is unclear or silent.

This resolution confirmed the good working relationship between IASC and IOSCO but left considerable discretion with the separate market regulators who are the members of IOSCO. It is for each securities commission or regulator to decide whether to accept the IOSCO recommendation and whether to apply supplemental treatments.

In particularly, if the SEC in the USA were to continue requiring reconciliations to US GAAP there is a risk that foreign registrants on US stock exchanges would regard this as too costly and troublesome and would apply US GAAP in preference to IASB Standards.

Источник: https://www.accountingnotes.net/accounting-standards/international-accounting-standards-committee-iasc-foundation/5570

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