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Introduction To IFRS NOTE

IFRS (International Financial Reporting Standards) is a set of global accounting standards developed by the IASB to ensure high-quality and comparable financial statements across countries. The evolution of IFRS began in the 1950s due to the challenges posed by international trade and diverse accounting practices, leading to the formation of the IASC in 1973 and its replacement by the IASB in 2001. The IASB, under the IFRS Foundation, continues to develop and approve IFRS, supported by the IFRS Interpretations Committee for technical expertise.

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32 views3 pages

Introduction To IFRS NOTE

IFRS (International Financial Reporting Standards) is a set of global accounting standards developed by the IASB to ensure high-quality and comparable financial statements across countries. The evolution of IFRS began in the 1950s due to the challenges posed by international trade and diverse accounting practices, leading to the formation of the IASC in 1973 and its replacement by the IASB in 2001. The IASB, under the IFRS Foundation, continues to develop and approve IFRS, supported by the IFRS Interpretations Committee for technical expertise.

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LECTURE NOTE

Timothy Oboh

Introduction to IFRS

What is IFRS?

IFRS is a single set of high quality, understandable, and enforceable global accounting

standards developed and published by IASB to be used by entities in preparing general-purpose

financial statements and other reporting.

Evolution of IFRS

The rapid growth of international trade foreign direct investment and the company’s

expansion of their reach beyond their borders began in the 1950s. Accounting professions see

internationalisation of businesses as a significant challenge hence the call for convergence.

Worldwide accounting was highly diverse and comparing financial statements meaningfully

from one country to another was very difficult.

The 1966- 1967 president of the Institute of Chartered Accountants in England and Wales

(ICAEW), Sir Henry (late Lord Benson) led a movement to tackle the issues of different

accounting practices. Benson was born and bred in South Africa and then migrated to the UK. In

1966, He persuaded The American Institute of Certified Public Accountants (AICPA), the

Canadian Institute of Chartered Accountants (CICA), Institute of Chartered Accountants of

Scotland (ICAS), and the Institution of Chartered Accountants of Ireland to join with the

ICAEW to form the Accountants International Study Group (AISG). The AISG highlighted the
diversity in accounting practices among the three countries, namely U.S., Canadian, and the U.K.

Thus, the non-compatibility of financial statements across borders.

FORMATION OF IASB

IASC -IAS & SIC - June 1973 to April 2001

The International Accounting Standards Committee (IASC) was founded in June 1973 in

London and was replaced by the International Accounting Standards Board on 1 April 2001. It

was responsible for developing the International Accounting Standards and promoting the use

and application of these standards.

The IASC was formed because of an agreement between accountancy bodies in the following

countries: Australia, Canada, France, Germany, Japan, Mexico, Netherlands, United Kingdom

and Ireland, United States of America. In 1997 IASC concluded that to effectively bring about

convergence between national accounting standards and practices and high-quality global

accounting standards, they need to change their structure which was concluded in 2000. This led

The Standard Interpretations Committee (SIC) was the interpretative body of the IASC.

The International Accounting Standards Board (IASB) subsequently endorsed SICs. The IFRS

Interpretations Committee has reissued these Interpretations where necessary.


IASB & IFRS - IFRSIC - 2001 to date

IASB - The International Accounting Standards Board (IASB) is an independent, private-

sector body that develops and approves International Financial Reporting Standards (IFRSs). The

IASB operates under the oversight of the IFRS Foundation. The IASB was formed in 2001 to

replace the International Accounting Standards Committee (IASC).

IFRSIC - The Interpretations Committee comprises 14 voting members, appointed by the

Trustees of the IFRS Foundation. The members provide the best available technical expertise and

diversity of international business and market experience relating to the application of IFRS

Standards. Interpretations Committee meetings are open to the public and are webcast.

Generally IFRS = IASs + IFRSs with their interpretation.

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