The IASB is responsible for the development and publication of IFRS Accounting Standards. The IFRS Accounting Standards provide for a high-quality, internationally recognised set of accounting standards that bring transparency, accountability and efficiency to financial markets around the world.
The process
The IASB follows a structured process when developing and issuing new IFRS. This process typically includes a period of research and consultation, followed by the publication of an exposure draft. The exposure draft is then subject to public comment, and the IASB considers the feedback received before finalizing the standard.
The IASB produces the workable standards based on the following features
Initially the IASB named their standards International Accounting Standards or IASs. As from 200 new standards issued are referred to as International Financial Reporting Standards of IFRSs. There are xx IASs still applicable and xx IFRSs. Almost each of the standards include:
- scope
- definitions
- recognition
- initial measurement
- subsequent measurement
- derecognition
- disclosure
- effective date
IFRS Accounting Standards are principle based. A company applying IFRS standards has latitude as long as it adheres to the principles. For example, IAS 16 on Property, Plant & Equipment states at IAS 16.9:
This Standard does not prescribe the unit of measure for recognition, ie what constitutes an item of property, plant and equipment. Thus, judgment is required in applying the recognition criteria to an entity’s specific circumstance.
Conclusion
Consequently, a company has to define what it considers an item of property, plant and equipment. These considerations are referred to as the company’s accounting policies. It is important to inform employees, but also auditors on these policies. The IASB produces the workable IFRS standards for international financial reporting. The IASB department makes the final standards for the IFRS.
Fidugius
The Fidugius Accounting & Reporting Manual is the solution to share a company’s accounting policies. A smart toolkit with all the necessary information based on the company accounting policies and the IASB. At any time the right information is available.
Curious how the Fidugius smart solution can help you in your work?
