Vous êtes sur la page 1sur 8

Title: International Accounting Standard board (IASB)

Course: Financial Reporting

Programme: M.COM

Session: 2010-2012

Submitted To: Mr. Waqas Abdul Sattar

Submitted By: Ali Tariq

Roll No: MCM-10-19

Date: 20/10/2011

Bahauddin Zakariya University

International Accounting Standards Board (IASB)


Defined:
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.

History of the IASB:


On January 25, 2001, the International Accounting Standards Foundation (IASF) was incorporated as a tax-exempt organization in the US state of Delaware. On February 6, 2001, the International Financial Reporting Standards Foundation was also incorporated as a tax-exempt organization in Delaware. The IFRS Foundation is the parent entity of the International Accounting Standards Board (IASB), an independent accounting standard-setter based in London, England. On 1 March 2001, the IASB assumed accounting standard-setting responsibilities from its predecessor body, the International Accounting Standards Committee (IASC). This was the culmination of a restructuring based on the recommendations of the report Recommendations on Shaping IASC for the Future. The IASB structure has the following main features: the IFRS Foundation is an independent organization having two main bodies, the Trustees and the IASB, as well as an IFRS Advisory Council and the IFRS Interpretations Committee (formerly the IFRIC). The IASC Foundation Trustees appoint the IASB members, exercise oversight and raise the funds needed, but the IASB has responsibility for setting International Financial Reporting Standards (international accounting standards).

ISAB Objectives:
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.

IASB Members:
The IASB has 15 Board members, each with one vote. They are selected as a group of experts with a mix of experience of standard-setting, preparing and using accounts, and academic work. At their January 2009 meeting the Trustees of the Foundation concluded the first part of the second Constitution Review, announcing the creation of a Monitoring Board and the expansion of the IASB to 16 members and giving more consideration to the geographical composition of the IASB. The IFRS Interpretations Committee has 14 members. Its brief is to provide timely guidance on issues that arise in practice. A unanimous vote is not necessary in order for the publication of a Standard, exposure draft, or final "IFRIC" Interpretation. The Board's 2008 Due Process manual stated that approval by nine of the members is required. The members (as of July 2011) are:

Hans Hoogervorst (Chairman), Netherlands, former Minister of Finance, Minister of Finance. Ian Mackintosh (Vice-chairman), New Zealand, former Coopers & Lybrand, Chief Accountant Australian Securities and Investments Commission. Stephen Cooper, UK, UBS Investment Research. Phillipe Danjou, France, former Arthur Andersen, AMF (Financial Markets Authority of France). Jan Engstrm, Sweden, former Volvo Group. Patrick Finnegan, USA, formerly of the CFA Institute. Amaro Luiz de Oliveira Gomes. Prabhakar Kalavacherla (PK) (was an audit partner at KPMG LLP in the San Francisco office). Dr Elke Knig (Germany). Patricia McConnell, USA, formerly of Bear Stearns. Takatsugu Ochi (Japan). Paul Pacter (US). Darrel Scott (South Africa). John T. Smith, USA, former Deloitte, FASB. Zhang Wei-Guo, China, former Professor in Shanghai, China Acc. Standards Committee.

Standard Setting Process:


The due process comprises six stages, with the Trustees having the opportunity to ensure compliance at various points throughout: 1. 2. 3. 4. 5. 6. Setting the agenda. Planning the project. Developing and publishing the discussion paper. Developing and publishing the exposure draft. Developing and publishing the standard. After the standard is issued.

1. Setting the Agenda:


The IASB, by developing high quality accounting standards, seeks to address a demand for better-quality information that is of value to all users of financial statements. Betterquality information will also be of value to preparers of financial statements. The IASB evaluates the merits of adding a potential item to its agenda mainly by reference to the needs of investors. The IASB considers:

the relevance to users of the information and the reliability of information that could be provided whether existing guidance available the possibility of increasing convergence The quality of the standard to be developed. Resource constraints.

To help the IASB in considering its future agenda, its staff is asked to identify, review and raise issues that might warrant the IASBs attention. The IASB receives requests from constituents to interpret, review or amend existing publications. The staff considers all such requests, summaries major or common issues raised, and present them to the IASB from time to time as candidates for when the IASB is next considering its agenda.

IASB Meetings:
The IASBs discussions of potential projects and its decisions to adopt new projects take place in public IASB meetings. Before reaching such decisions the IASB consults the IFRS Advisory

Council and accounting standard-setting bodies on proposed agenda items and setting priorities. In making decisions regarding its agenda priorities, the IASB also considers factors related to its convergence initiatives with accounting standard-setters. The IASBs approval to add agenda items, as well as its decisions on their priority, is by a simple majority vote at an IASB meeting.

2. Project Planning:
When adding an item to its active agenda, the IASB also decides whether to:

Conduct the project alone, or Jointly with another standard-setter.

Similar due process is followed under both approaches. After considering the nature of the issues and the level of interest among constituents, the IASB may establish a working group at this stage. A team is selected for the project by the two most senior members of the technical staff:

The Director of Technical Activities; and The Director of Research.

The project manager draws up a project plan under the supervision of those Directors.

3. Development and Publication of an IFRS:


The development of an IFRS is carried out during IASB meetings, when the IASB considers the comments received on the exposure draft. After resolving issues arising from the exposure draft, the IASB considers whether it should expose its revised proposals for public comment, for example by publishing a second exposure draft. In considering the need for re-exposure, the IASB: Identifies substantial issues that emerged during the comment period on the exposure draft that it had not previously considered. Assesses the evidence that it has considered. Evaluates whether it has sufficiently understood the issues and

actively sought the views of constituents. Considers whether the various viewpoints were aired in the exposure draft and adequately discussed and reviewed in the basis for conclusions.

4. Drafting the IFRS:


The IASBs decision on whether to publish its revised proposals for another round of comment is made in an IASB meeting. If the IASB decides that reexposure is necessary, the due process to be followed is the same as for the first exposure draft. When the IASB is satisfied that it has reached a conclusion on the issues arising from the exposure draft, it instructs the staff to draft the IFRS.

Pre-ballot Draft:
A pre-ballot draft is usually subject to external review, normally by the IFRIC. Shortly before the IASB ballots the standard, a near-final draft is posted on eIFRS. Finally, after the due process is completed, all outstanding issues are resolved, and the IASB members have balloted in favour of publication, the IFRS is issued.

Procedures after an IFRS is issued:


After an IFRS is issued, the staff and the IASB members hold regular meetings with interested parties, including other standard-setting bodies, to help understand unanticipated issues related to the practical implementation and potential impact of its proposals. The IFRS Foundation also fosters educational activities to ensure consistency in the application of IFRSs.

5. Development and Publication:


Although a discussion paper is not mandatory, the IASB normally publishes it as its First publication on any major new topic to explain the issue and solicit early comment from constituents. If the IASB decides to omit this step, it will state why. Typically, a discussion paper includes:

A comprehensive overview of the issue; Possible approaches in addressing the issue; The preliminary views of its authors or the IASB; and An invitation to comment.

This approach may differ if another accounting standard-setter develops the research paper. Discussion papers may result either from:

A research project being conducted by another accounting standard-setter; or As the first stage of an active agenda project carried out by the IASB.

6.Development and Publication of an Exposure Draft:

Publication of an exposure draft is a mandatory step in due process. Irrespective of whether the IASB has published a discussion paper, an exposure draft is the IASBs main vehicle for consulting the public. The form of a proposed standard (or amendment to an existing standard) .

The development of an exposure draft begins with the IASB considering:


Issues on the basis of staff research and recommendations; Comments received on any discussion paper; and

Suggestions made by the IFRS Advisory Council, working groups and accounting standard-setters, and arising from public education sessions.

After resolving issues at its meetings, the IASB instructs the staff to draft the exposure draft. When the draft has been completed, and the IASB has balloted on it, the IASB publishes it for public comment.

IFRS
International Financial Reporting Standards (IFRS) are principles-based standards, interpretations and the framework (1989). Adopted by the International Accounting Standards Board (IASB). Many of the standards forming part of IFRS are known by the older name of International Accounting Standards (IAS). IAS was issued between 1973 and 2001 by the Board of the International Accounting Standards Committee (IASC). On 1 April 2001, the new IASB took over from the IASC the responsibility for setting International Accounting Standards. During its first meeting the new Board adopted existing IAS and SICs. The IASB has continued to develop standards calling the new standards.

Structure of IFRS

IFRS are considered a "principles based" set of standards in that they establish broad rules as well as dictating specific treatments. International Financial Reporting Standards comprise: International Financial Reporting Standards (IFRS)standards issued after 2001 International Accounting Standards (IAS)standards issued before 2001 Interpretations originated from the International Financial Reporting Interpretations Committee (IFRIC)issued after 2001 Standing Interpretations Committee (SIC)issued before 2001 Conceptual Framework for the Preparation and Presentation of Financial Statements (2010)