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Reading 10: Mission of the IFRS Foundation & the IASB (Why adopt? (To…
Reading 10: Mission of the IFRS Foundation & the IASB
Mission
IFRS
Accountability
Efficiency
Transparency
Global markets
Financial statements
Vision
Single set of global accounting standards
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Facilitate economic decisions
International Accounting Standards Board
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Independent
Not for Profit
Private Sector
Formed 2001
"Convergence is not a substitute for adoption"
'Based on' or 'consistent with'
Not a substitute :no_entry:
National accounting standards
Short-term strategy only
Transitional period
Adoption voluntary
Public-interest
What are IFRS Standards?
how to measure those items
how to present them in a set of financial statements
Identify assets, liabilities, income and expense
related disclosures about those items
How IFRS Standards are developed
Developed by IASB
Independent
Overseen by trustees
International staff team
Collaborates with worldwide standard-setting community
Supported by:-
Accounting Standards Advisory Forum
IFRS Interpretations Committee
IFRS Advisory Council
Offers guidance when divergence in practice occurs
"Thorough, open, participatory and transparent due process"
Process
Research programme
Discussion Paper
Agenda proposal
Research
Standards development
Exposure draft
Final IFRS Standard
Agenda consultation
Info request
3-5 year plan
Implementation
Interpretation
Review
Why adopt?
To enable investors/lendors to assess risks & returns
Cross-border investment
Relevant, reliable & comparable financial info
Reduces financial statement preparation costs
Markets can allocate funds more efficiently
Lower cost of capital for firms