Research School of Accounting
28 6. International Accounting Standards Board • IASB is an independent , privately funded accounting standard setter. • Overseen by the IFRS Foundation. • Established in 2001, replacing the International Accounting Standards Committee (IASC). • Committed to the development of a single set of high quality, enforceable global accounting standards . • IASB releases IFRS following public consultation . Research School of Accounting
29 6. International Accounting Standards Board • IASB has an IFRS Interpretations Committee : – ‘official’ interpretative arm of the IASB – reviews on a timely basis accounting issues that have arisen within the context of current IFRSs and provides authoritative guidance on those issues – provides guidance on issues not covered in IFRSs – provides interpretations of existing requirements within IFRSs. • IFRS Interpretations Committee’s interpretations are adapted by the AASB to suit the Australian environment. (AASB 1048 Interpretation of Standards ) • Interpretations have the force of law. Research School of Accounting
School of Accounting and Business Information Systems 30 The main benefits of Australian adopting IFRS may include: A. increasing the comparability of financial reports prepared in different countries so that capital ultimately flows to entities that can use it the most productively. B. reducing the financial reporting costs for Australian multinational companies. C.removing barriers to international capital flows by reducing differences in financial reporting requirements and so increasing understanding by foreign investors of Australian reports. D.all of the given answers. In-class quiz 4.
31 7. Australian accounting standards • The s 224 of the ASIC Act requires that accounting standards developed by the AASB to provide financial information that: – allows users to make decisions about the allocation of scarce resources – helps directors discharge their financial reporting obligations – is relevant to assessing performance , financial position, financing and investment – is relevant and reliable , facilitates comparability and is readily understandable – reduce the cost of capital and enable Australian entities to compete effectively overseas. Research School of Accounting