International Accounting Standards Board (IASB)

International Accounting Standards Board IASB International Financial Reporting Standards IFRS Accounting Standards Financial Reporting Financial Statements Public Interest Global Accounting
The London-based privately funded organization responsible for developing a single set of high-quality, understandable International Financial Reporting Standards (IFRS) for general-purpose financial statements.
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Definition

The International Accounting Standards Board (IASB) is a London-based, privately funded organization that was initially established in 1973 as the International Accounting Standards Committee (IASC). Its core mission is to develop, in the public interest, a single set of high-quality, understandable, and enforceable global accounting standards known as the International Financial Reporting Standards (IFRS) for general-purpose financial statements.

Examples

  1. IFRS 15 - Revenue from Contracts with Customers: This standard outlines the accounting guidelines for revenue from contracts with customers.
  2. IFRS 16 - Leases: Provides the principles for the recognition, measurement, presentation, and disclosure of leases.
  3. IFRS 9 - Financial Instruments: Covers the classification, measurement, and recognition of financial assets and financial liabilities.

Frequently Asked Questions (FAQ)

What is the primary role of the IASB?

The primary role of the IASB is to develop and implement high-quality accounting standards that promote transparency, accountability, and efficiency in financial markets around the world.

What are IFRS?

IFRS, or International Financial Reporting Standards, are globally accepted accounting standards developed by the IASB to ensure consistency, transparency, and comparability of financial statements across different jurisdictions.

Why is the IASB important for global businesses?

The IASB’s standards promote trust and reliability in financial reporting, making it easier for investors and other stakeholders to make informed economic decisions. This consistency is particularly beneficial for multinational companies operating in various countries.

How does the IASB interact with other financial standard-setting bodies?

The IASB collaborates with national accounting standard-setting bodies and other regional or international authorities to ensure that global standards are mutually supportive and consistently applied, fostering global financial stability.

Who funds the IASB?

The IASB is privately funded through contributions from international and multinational companies, accounting firms, central banks, and financial institutions worldwide.

  • International Financial Reporting Standards (IFRS): Standards developed by the IASB to ensure global consistency in financial reporting.
  • International Accounting Standards (IAS): The original standards issued by the International Accounting Standards Committee (IASC), which the IASB has amended or replaced with IFRS.
  • FASB (Financial Accounting Standards Board): The standard-setting body for Generally Accepted Accounting Principles (GAAP) in the United States.
  • GAAP (Generally Accepted Accounting Principles): A framework of accounting standards, rules, and procedures set by the FASB and used in the United States.

Online References

Suggested Books for Further Studies

  1. “International Financial Reporting Standards (IFRS) 2019 Red Book” by IFRS Foundation
  2. “Understanding IFRS Fundamentals: International Financial Reporting Standards” by Nandakumar Ankarath et al.
  3. “Wiley IFRS: Practical Implementation Guide and Workbook” by Abbas A. Mirza et al.
  4. “Financial Accounting: IFRS Edition” by Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

Fundamentals of International Accounting: Accounting Standards Basics Quiz

### What does IASB stand for? - [x] International Accounting Standards Board - [ ] International Auditing Standards Board - [ ] International Accounting Security Board - [ ] International Assurance Standards Board > **Explanation**: IASB stands for International Accounting Standards Board, a body responsible for developing international financial reporting standards. ### When was the IASB founded? - [ ] 1962 - [ ] 1985 - [ ] 1999 - [x] 2001 > **Explanation**: The International Accounting Standards Board (IASB) was formed in 2001, replacing the International Accounting Standards Committee (IASC). ### What standards does the IASB develop? - [ ] Swedish Accounting Standards - [x] International Financial Reporting Standards (IFRS) - [ ] Generally Accepted Accounting Principles (GAAP) - [ ] European Financial Reporting Standards (EFRS) > **Explanation**: The IASB develops International Financial Reporting Standards (IFRS) for global financial reporting. ### Why are IFRS important? - [ ] They increase bureaucratic overhead for companies. - [ ] They are mandatory in only one country. - [x] They enhance transparency and comparability in financial statements globally. - [ ] They are utilized only by private companies. > **Explanation**: IFRS are important because they enhance transparency and comparability in financial statements globally, aiding in efficient and reliable business operations. ### Which of the following is an example of an IFRS standard? - [ ] IAS 39 - Financial Instruments: Recognition and Measurement - [ ] GAAP 8 - Accounting Principles - [ ] EFRS 101 - European Financial Reporting Guide - [x] IFRS 16 - Leases > **Explanation**: IFRS 16 - Leases is an example of a standard developed by the IASB to replace an earlier IAS. ### What is the predecessor of the IASB? - [ ] Financial Accounting Standards Board (FASB) - [ ] International Financial Reporting Committee (IFRC) - [x] International Accounting Standards Committee (IASC) - [ ] Global Accounting Standards Bureau (GASB) > **Explanation**: The predecessor of the IASB was the International Accounting Standards Committee (IASC), which was replaced by the IASB in 2001. ### How does IASB achieve its mission? - [ ] By setting national taxation rates - [x] By developing high-quality international accounting standards - [ ] By issuing financial reports for corporations - [ ] By auditing multinational companies > **Explanation**: The IASB achieves its mission by developing high-quality, globally accepted accounting standards for general-purpose financial statements. ### Who primarily benefits from IFRS? - [ ] Only small local businesses - [x] Multinational companies and global investors - [ ] Governments exclusively - [ ] Personal accountants > **Explanation**: Multinational companies and global investors primarily benefit from IFRS due to the consistency and comparability of financial reports across different countries. ### How is IASB funded? - [ ] By taxing member countries - [x] Through contributions from companies and financial institutions - [ ] By the IMF and World Bank exclusively - [ ] By retail investors > **Explanation**: IASB is funded through contributions from international and multinational companies, accounting firms, central banks, and financial institutions worldwide. ### Which organization sets accounting standards for the United States? - [x] Financial Accounting Standards Board (FASB) - [ ] International Accounting Standards Board (IASB) - [ ] IFRS Foundation - [ ] European Union Accounting Board (EUAB) > **Explanation**: The Financial Accounting Standards Board (FASB) sets accounting standards known as GAAP (Generally Accepted Accounting Principles) in the United States.

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Wednesday, August 7, 2024
International Accounting Standards Board (IASB)
International Accounting Standards (IAS)
Conceptual Framework for Financial Reporting January 1, 1
IASB: International Accounting Standards Board January 1, 1
International Financial Reporting Standards (IFRS) January 1, 1
International Financial Reporting Standards (IFRS) January 1, 1
EU-adopted IFRS January 1, 1
Generally Accepted Accounting Principles (US GAAP) January 1, 1
International Accounting Standard (IAS) January 1, 1
International Accounting Standards (IAS) January 1, 1
International Accounting Standards Board (IASB) January 1, 1
International Financial Reporting Interpretations Committee (IFRIC) January 1, 1

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