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Florian Esterer appointed to the IASB
The appointment takes the IASB to its full complement of 14 members
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New IASB members appointed
The IFRS Foundation’s Trustees have appointed Patrina Buchanan and Hagit Keren to the IASB
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Proposals to update IFRS for SMEs Accounting Standard
IASB sets out proposed revisions following comprehensive review of the Standard
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Jingdong Hua appointed as ISSB Vice-Chair
He joins the ISSB leadership team together with Vice-Chair Sue Lloyd and Chair Emmanuel Faber
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News
Forthcoming meetings
Trustees of the IFRS Foundation
25 - 27 October 2022
Islamic Finance Consultative Group
1 - 2 November 2022
Global Preparers Forum
11 November 2022
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Required IFRS® Standards
The most recent versions of the authoritative pronouncements of the International Accounting Standards Board.
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Issued IFRS® Standards
The most recent versions of all issued IFRS Standards, including Standards that come into force in the future, but not Standards that have been superseded or replaced.
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The Annotated Issued IFRS® Standards
The same core content as Issued IFRS Standards, as well as further explanatory material to help you understand and apply IFRS Standards.
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History of Preface to International Financial Reporting Standards
| January 1975 | Preface to International Accounting Standards adopted by IASC |
| November 1982 | Preface to International Accounting Standards amended by IASC |
| July 2001 | Project to replace the old Preface with a new one was placed on IASB agenda |
| July 2001 | Exposure Draft of Preface to International Financial Reporting Standards published by IASB |
| May 2002 | Final Preface to International Financial Reporting Standards published by IASB |
| December 2007 | Amendments to Preface approved by the IASB reflecting increase in size of IFRIC to 14 members |
Summary of Preface to International Financial Reporting Standards
Objective of the Preface to IFRS
The objective of the Preface to International Financial Reporting Standards is to set out the International Accounting Standards Board's (IASB's) mission and objectives, the scope of International Financial Reporting Standards (IFRSs), due process for developing IFRSs and Interpretations, and policies on effective dates, format, and language for IFRSs.
IASB's objectives
Under the IFRS Foundation Constitution, the objectives of the IASB are:
- to develop, in the public interest, a single set of high quality, understandable, enforceable and globally accepted financial reporting standards based upon clearly articulated principles. These standards should require high quality, transparent and comparable information in financial statements and other financial reporting to help investors, other participants in the world’s capital markets and other users of financial information make economic decisions;
- to promote the use and rigorous application of those standards;
- in fulfilling the objectives associated with (a) and (b), to take account of, as appropriate, the needs of a range of sizes and types of entities in diverse economic settings; and
- to promote and facilitate adoption of IFRSs, being the standards and interpretations issued by the IASB, through the convergence of national accounting standards and IFRSs.
Scope of IFRSs
- IASB Standards are known as International Financial Reporting Standards.
- All International Accounting Standards (IASs) and Interpretations issued by the former IASC and SIC continue to be applicable unless and until they are amended or withdrawn.
- IFRSs apply to the general purpose financial statements and other financial reporting by profit-oriented entities – those engaged in commercial, industrial, financial, and similar activities, regardless of their legal form.
- Entities other than profit-oriented business entities may also find IFRSs appropriate.
- General purpose financial statements are intended to meet the common needs of shareholders, creditors, employees, and the public at large for information about an entity's financial position, performance, and cash flows.
- Other financial reporting includes information provided outside financial statements that assists in the interpretation of a complete set of financial statements or improves users' ability to make efficient economic decisions.
- IFRS apply to individual company and consolidated financial statements.
- A complete set of financial statements includes a statement of financial position, a statement of comprehensive income, a statement of cash flows, a statement of changes in equity, a summary of accounting policies, and explanatory notes. When a separate income statement is presented in accordance with IAS 1(2007), it is part of that complete set.
- In developing Standards, IASB intends not to permit choices in accounting treatment. Further, IASB intends to reconsider the choices in existing IASs with a view to reducing the number of those choices.
- IFRS will present fundamental principles in bold face type and other guidance in non-bold type (the 'black-letter'/'grey-letter' distinction). Paragraphs of both types have equal authority.
- The provision of IAS 1 Presentation of Financial Statements that conformity with IAS requires compliance with every applicable IAS and Interpretation requires compliance with all IFRSs as well.
Due process for IFRS
- Due process steps for a Standard will normally include the following (* below means required by IFRS Foundation's Constitution):
- staff work to identify and study the issues
- study of existing national standards and practices
- IASB consults with Trustees and the Advisory Council about the advisability of adding the project to the IASB's agenda*
- IASB normally forms an advisory group
- IASB publishes a discussion document for comment
- IASB considers comments received on the discussion document
- IASB publishes an exposure draft with at least 9 affirmative votes if there are fewer than 16 members, or 10 if there are 16 members* (the exposure draft will include dissenting opinions and basis for conclusions)
- IASB considers comments received on the exposure draft*
- IASB considers the desirability of holding a public hearing and of conducting field tests*
- IASB approves the final Standard with at least 9 affirmative votes if there are fewer than 16 members, or 10 if there are 16 members* (the Standard will include dissenting opinions and basis for conclusions)
- IASB publishes a standard with (i) 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, and (ii) the dissenting opinion of any IASB member.*
- IASB deliberates in meetings open to public observation.
Due process for Interpretations
- Interpretations of IFRS will be developed by the IFRS Interpretations Committee for approval by IASB
- Due process steps for an Interpretation will normally include (* below means required by IFRS Foundation's Constitution):
- staff work to identify and study the issues and existing national standards and practices
- The IFRS Interpretations Committee studies national standards and practices
- The IFRS Interpretations Committee publishes a draft Interpretation for comment if no more than 4 Committee members have voted against the proposal*
- The IFRS Interpretations Committee considers comments received on the draft Interpretation within a reasonable period of time
- The IFRS Interpretations Committee approves the final Interpretation if no more than 4 Interpretations Committee members have voted against the proposal and submits it to IASB*
- IASB approves the final Interpretation by at least 9 affirmative votes of IASB if there are fewer than 16 members, or by 10 of its members if there are 16 members*
- The IFRS Interpretations Committee deliberates in meetings open to public observation
Effective dates
- Each IFRS and Interpretation will set out its own effective date and transition provisions
Language
- English is the official language of IASB discussion documents, exposure drafts, IFRSs, and Interpretations. IASB may approve translations if the process assures the quality of the translation, and IASB may license other translations.
What are the objectives of international accounting standards?
IASB's objectives
Under the IFRS Foundation Constitution, the objectives of the IASB are: to develop, in the public interest, a single set of high quality, understandable, enforceable and globally accepted financial reporting standards based upon clearly articulated principles.
Which of the following is not an objective of the IFRS Foundation?
Which ONE of the following is NOT an objective of the IFRS Foundation? The IFRS Foundation does not focus primarily on the needs of global, multi-national organisations.
Which of the following is not an objective of financial accounting?
The correct answer is 4. Financial accounting is designed to measure directly the value of a business enterprise. Financial accounting cannot directly measure the value of any business organization; it can only provide estimates that can be used for estimating the value of the organization in any accounting period.
What are the four objectives of accounting standards?
The primary objective of Accounting Standards are:
To put an end to the non-comparability of financial statements. To increase the reliability of the financial statements. To provide standards which are transparent for users. To define the standards which are comparable over all periods presented.