The International Accounting Standards Board (IASB) was formed in 2001 to develop global accounting standards called International Financial Reporting Standards (IFRS). Over 40 years, the vision of a single set of global accounting standards has become a reality with over 125 jurisdictions now requiring IFRS for public companies. Adoption of IFRS aims to increase comparability between companies, reduce financial reporting costs, and enable more efficient allocation of capital across borders through improved transparency and accountability in financial reporting.

1. A brief history of IFRS
1 Created by Dr G. L. Ilott, CQUniversity Australia

2. Why bother with global standards?
1. Comparability: Each country's standards will treat critical items such as asset valuations
and profit differently.
• With global standards, international investors can compare apples with apples.
2. Globalisation pressures: Capital flows becoming more global as trade barriers were eased
• Companies more likely to list of multiple stock exchanges in different countries
• Cross-border stock holdings are becoming more common
• Costs involved in re-stating financial statements for every jurisdiction a company lists
in.
3. However, there are problems with global standards: more on this later.
2 Created by Dr G. L. Ilott, CQUniversity Australia

3. What the IASB offers
The use of one set of high quality standards by companies throughout
the world improves the comparability and transparency of financial
information and reduces financial statement preparation costs. When
the standards are applied rigorously and consistently, capital market
participants receive higher quality information and can make better
decisions.
Thus, markets allocate funds more efficiently and firms can achieve a
lower cost of capital.
— Paul Pacter 2015, p. 24.
3 Source: Pacter, P 2015, IFRS as global standards, IFRS Foundation, London, UK, from <www.ifrs.org/Use-around.../IFRS-as-global-standards-Pocket-Guide-April-2015.PDF>.

4. IASB'S Objectives
1. IFRS brings transparency by enhancing the international comparability
and quality of financial information, enabling investors and other
market participants to make informed economic decisions.
2. IFRS strengthens accountability by reducing the information gap
between the providers of capital and the people to whom they have
entrusted their money.
3. IFRS contributes to economic efficiency by helping investors to
identify opportunities and risks across the world, thus improving
capital allocation.
4 Source: Pacter, P 2015, IFRS as global standards, IFRS Foundation, London, UK, from <www.ifrs.org/Use-around.../IFRS-as-global-standards-Pocket-Guide-April-2015.PDF>.

5. A brief history
…the vision of a single set of global accounting standards first set out
by the leaders of key accounting organisations around the world over
40 years ago is today a reality.
— Paul Pacter 2015, p. 9.
5 Source: Pacter, P 2015, IFRS as global standards, IFRS Foundation, London, UK, from <www.ifrs.org/Use-around.../IFRS-as-global-standards-Pocket-Guide-April-2015.PDF>.

6. Timeline
Year Event
1967 Accountants’ International Study Group formed, containing
The Institute of Chartered Accountants of England and Wales,
the Canadian Institute of Chartered Accountants and the
American Institute of Certified Public Accountants.
1973 The International Accounting Standards Committee (IASC) is
formed.
2001 The IASB replaces the IASC. The IASB offers improved
governance over its standard-setting processes.
6 Created by Dr G. L. Ilott, CQUniversity Australia

7. Progress since IASB
Year Event
2002 EU agrees to adopt IFRS from 2005, IASB + FASB agree on joint program for convergence.
2003 Australia, NZ, Hong Kong & South Africa agree to adopt IFRS from 2005.
2004 Japan agrees to convergence.
2005 EU: 25 countries, almost 7,000 companies simultaneously switch to IFRS.
2006 China agrees to convergence program. IASB + FASB agree to fast track convergence.
2007 100+ countries now require or permit IFRS for reporting.
2009 G20 supports IASB adoption. The IASB Monitoring Board established.
2012 Russia commences use of IFRS
2014 IASB + FASB release converged Standard on revenue recognition. Watch this space…
7 Created by Dr G. L. Ilott, CQUniversity Australia

8. Currently…
• 125 of 149 (84%) of jurisdictions require the use of IFRS for public
companies.
• IASB employs 150 staff of 30 different nationalities.
• The IASB actively supports IFRS implementation projects and also
supports the XBRL electronic reporting project.
8 Source: IASB 2016, Who we are and what we do, IFRS Foundation, London UK, from http://www.ifrs.org/About-us/Documents/Who-We-Are-English.pdf.

9. Up next:
In the next presentation, I will examine some of the issues surrounding the benefits and problems of adopting
IFRS.
References in this presentation:
Deegan, CM 2014, Financial Accounting Theory 4 edn, McGraw Hill Education (Australia) Pty Ltd., North Ryde, NSW.
IASB 2016, Who we are and what we do, IFRS Foundation, London UK, from http://www.ifrs.org/About-us/
Documents/Who-We-Are-English.pdf.
Pacter, P 2015, IFRS as global standards, IFRS Foundation, London, UK, from <www.ifrs.org/Use-around.../IFRS-as-
global-standards-Pocket-Guide-April-2015.PDF>.
9 Created by Dr G. L. Ilott, CQUniversity Australia