Ifrs as Global Standards

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2014

Paul Pacter

IFRS®

as global standards:a pocket guide

IFRS Foundation®


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‘If we really believe in open international markets and the benefitsof global finance, then it can’t make sense to have differentaccounting rules and practices for companies and investorsoperating across national borders. That is why we need global

standards.

Ultimately this will get done.’

Paul A VolckerChairman of the US Federal Reserve (1979—1987);Chairman of the IFRS Foundation Trustees (2000—2005)


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This Pocket Guide has been published by the IFRS Foundation and has not

been approved by the International Accounting Standards Board (IASB).

Disclaimer: the IASB, the IFRS Foundation, the authors and thepublishers do not accept responsibility for any loss caused by acting or

refraining from acting in reliance on the material in this publication,

whether such loss is caused by negligence or otherwise.

International Financial Reporting Standards (including International

Accounting Standards and SIC and IFRIC Interpretations), Exposure Drafts

and other IASB and/or IFRS Foundation publications are copyright of the

IFRS Foundation.

Copyright © 2014 IFRS Foundation®

ISBN: 978-1-909704-44-2

All rights reserved. No part of this publication may be translated,

reprinted, reproduced or used in any form either in whole or in part or

by any electronic, mechanical or other means, now known or hereafter

invented, including photocopying and recording, or in any information

storage and retrieval system, without prior permission in writing from

the IFRS Foundation.

The approved text of International Financial Reporting Standards and

other IASB publications is that published by the IASB in the English

language. Copies may be obtained from the IFRS Foundation. Pleaseaddress publications and copyright matters to:

IFRS Foundation Publications Department

30 Cannon Street, London EC4M 6XH, United Kingdom

Tel: +44 (0)20 7332 2730 Fax: +44 (0)20 7332 2749

Email: [email protected] Web: www.ifrs.org

The IFRS Foundation logo/the IASB logo/the IFRS for SMEs logo/‘HexagonDevice’, ‘IFRS Foundation’, ‘eIFRS’, ‘IASB’, ‘IFRS for SMEs’, ‘IAS’, ‘IASs’,

‘IFRIC’, ‘IFRS’, ‘IFRSs’, ‘SIC’, ‘International Accounting Standards’ and

‘International Financial Reporting Standards’ are Trade Marks of the IFRS

Foundation.

The IFRS Foundation is a not-for-profit corporation under the General

Corporation Law of the State of Delaware, USA and operates in England

and Wales as an overseas company (Company number: FC023235) with its

principal office as above.

IFRS as global standards:

a pocket guide

2014

Paul Pacter

IFRS Foundation

30 Cannon Street

London EC4M 6XH

United Kingdom


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95% (124/130 jurisdictions) have made a public commitment to IFRSas the single set of global accounting standards.

81% (105/130 jurisdictions) already require the use of IFRS by allor most public companies, with most of the remaining jurisdictions

permitting their use.

US$40 trillion combined GDP of IFRS jurisdictions,representing more than half of worldwide GDP.

US$23 trillion non-EU While the European Unionremains the single biggest IFRS jurisdiction, the combined GDP of IFRS

jurisdictions outside of the European Union (US$23 trillion) is now

greater than that of the European Union itself (US$17 trillion).

48% In less than six years since its publication, the IFRS for SMEshas been adopted by 48 per cent (63/130) of jurisdictions while a further

16 jurisdictions are considering doing so.

Permit instead orequire IFRS (11%)

Require IFRS only fornancial institutions (2%

In the process orequiring IFRS (1%)

Use t e nationaor regional

AAP (5%)

Jurisdictions that require

the use of IFRSfor all or most publiccompanies 81%)

IFRS by numbers

Most jurisdictions already require IFRS for domestic reporting

IFRS has become the de facto global standard forfinancial reporting. Its quality has been validated

by almost a decade of use by markets in bothadvanced and developing economies.


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IFRS as global standards: a pocket guide| 2014 | 7

page

Foreword 13

Purpose of this guide 14

The vision 15

What is IFRS? 16

Standards in force as of 1 July 2014 17

How IFRS is developed 21

Structure of the IFRS Foundation and the IASB 22

The Standards development process 22

The IASB’s process for developing Standards 23

Members of the IASB 24

IFRS advisory bodies 25

Why adopt IFRS? 27

Profiles on the use of IFRS 28

What the profiles show 29

The jurisdiction summaries 32

Albania 33

Anguilla 34

Antigua and Barbuda 35

Argentina 36

Australia 37

Austria 38

Azerbaijan 39

Bahamas 40

Bahrain 41

ContentsContents


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8 | IFRS as global standards: a pocket guide | 2014 IFRS as global standards: a pocket guide| 2014 | 9

Estonia 70

European Union 71

Fiji 72

Finland 73

France 74

Georgia 75

Germany 76

Ghana 77

Greece 78

Grenada 79

Guatemala 80

Guinea-Bissau 81

Honduras 82

Hong Kong 83Hungary 84

Iceland 85

India 86

Indonesia 87

Iraq 88

Ireland 89

Israel 90

Italy 91

Jamaica 92

Japan 93

Jordan 94

Kenya 95

Korea (South) 96

Kosovo 97

Contents continued...

Bangladesh 42

Barbados 43

Belarus 44

Belgium 45

Bermuda 46

Bhutan 47

Bolivia 48

Bosnia-Herzegovina 49

Botswana 50

Brazil 51

Brunei Darussalam 52

Bulgaria 53

Cambodia 54

Canada 55

Cayman Islands 56

Chile 57

China 58

Colombia 59

Commonwealth of Dominica 60

Costa Rica 61

Croatia 62

Cyprus 63

Czech Republic 64

Denmark 65

Dominican Republic 66

Ecuador 67

Egypt 68

El Salvador 69


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Poland 126

Portugal 127

Romania 128

Russia 129

Rwanda 130

Saint Lucia 131

Saudi Arabia 132

Serbia 133

Sierra Leone 134

Singapore 135

Slovakia 136

Slovenia 137

South Africa 138

Spain 139

Sri Lanka 140

St Kitts and Nevis 141

St Vincent and the Grenadines 142

Suriname 143

Swaziland 144

Sweden 145

Switzerland 146

Taiwan 147

Tanzania 148

Thailand 149

Trinidad & Tobago 150

Turkey 151

Uganda 152

Ukraine 153

Contents continued...

Latvia 98

Lesotho 99

Liechtenstein 100

Lithuania 101

Luxembourg 102

Macao 103

Macedonia 104

Madagascar 105

Malaysia 106

Maldives 107

Malta 108

Mauritius 109

Mexico 110

Moldova 111

Mongolia 112

Montserrat 113

Myanmar 114

Nepal 115

Netherlands 116

New Zealand 117

Nicaragua 118

Niger 119

Nigeria 120

Norway 121

Oman 122

Pakistan 123

Panama 124

Paraguay 125


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El SalvadorEgypt


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Accounting standards required for publicly accountable entities

(listed companies and financial institutions)

Listed companies and financial institutions: IFRS is required for alllisted companies other than banks, insurance companies and pensionfunds.

Financial institutions: The bank, insurance and pension regulators havenot adopted IFRS, but they require that the financial statements of theirregulated entities state the main differences between ‘regulatory GAAP’and IFRS.

Separate company financial statements: IFRS required (other thanfinancial institutions).

IFRS endorsement

Which standards do companies follow? IFRS as issued by the IASB.

The auditor’s report asserts compliance with: IFRS.

Modifications to IFRS: None.

Endorsement process for new or amended IFRSs? The Consejo de Vigilancia de la Profesión de Contaduría Pública y Auditoría (CVPCPA) isthe accounting standard-setter recognised under the Commercial Code ofEl Salvador. The CVPCPA has adopted IFRS and the IFRS for SMEs.

Accounting standards required for SMEs Which standards do SMEs follow? All SMEs must follow the IFRS forSMEs, except for co-operative associations. For co-operative associationsthe Salvadoran Institute for Cooperatives has defined a set of accountingprinciples for its associates based on the IFRS for SMEs. The set ofstandards is called Financial Information Standards for Co-operative

Associations of El Salvador.

gyp



Listed companies and financial institutions: Egypt has not adoptedIFRS. By Decree No. 243/2006 of the Minister of Investment, in 2006 Egyptadopted 35 national accounting standards known as Egyptian AccountingStandards (EAS). The EAS was developed taking into consideration theIFRSs that existed in 2005.

Decree No. 243/2006 requires companies to look to IFRS if there is nocomparable EAS.

Separate company financial statements: EAS is required.

IFRS endorsement

Which standards do companies follow? EAS.

The auditor’s report asserts compliance with: EAS.

Modifications to IFRS: Not applicable.

Endorsement process for new or amended IFRSs? Not applicable.

Accounting standards required for SMEs

Which standards do SMEs follow? EAS.


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Japan Jamaica


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Accounting standards required for publicly accountable entities(listed companies and financial institutions)

Listed companies: Listed companies may use Japanese AccountingStandards, IFRS or US GAAP. Voluntary application of IFRS in consolidatedfinancial statements by listed companies that meet certain criteria has

been permitted since March 2010. In 2013 those criteria were broadenedto permit virtually all listed companies to use IFRS, as well as unlistedcompanies that are preparing consolidated financial statements for listingpurposes. As of May 2014, 40 companies with more than US$500 billion ofmarket capitalisation on the Tokyo Stock Exchange are using IFRS.

Financial institutions: IFRS permitted.

Separate company financial statements: IFRS permitted.

IFRS endorsement




Endorsement process for new or amended IFRSs? IFRS is adopted by theCommissioner of the Financial Services Agency through a formal processof endorsement that is prescribed by the Ordinance on Terminology,Forms and Preparations Methods of Consolidated Financial Statements.


Which standards do SMEs follow? Japanese Accounting Standards.



Listed companies: IFRS required. The Institute of Chartered Accountantsof Jamaica (ICAJ) has adopted both IFRS and the IFRS for SMEs as Jamaicannational standards.

Financial institutions: IFRS required.

Separate company financial statements: IFRS required.

IFRS endorsement



Modifications to IFRS: None.Endorsement process for new or amended IFRSs? Because IFRS has beenadopted by Resolution of the membership of the ICAJ, it is not necessaryto endorse individual new and amended Standards.


Which standards do SMEs follow? The IFRS for SMEs is permitted. Alternatively, SMEs may choose full IFRS.


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Saint Lucia


Rwanda



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g q p y


Listed companies: Saint Lucia follows the requirements of the EasternCaribbean Securities Regulatory Commission (ECSRC). The ECSRC is theregulatory body for the Eastern Caribbean Securities Market (ECSM,

which is the regional securities market for Anguilla, Antigua andBarbuda, Commonwealth of Dominica, Grenada, Montserrat, St Kitts andNevis, Saint Lucia and St Vincent and the Grenadines). ECSRC regulationsrequire the use of international accounting standards. Although IFRS isnot specifically named in the legislation, it is generally accepted to beIFRS, and all listed companies follow IFRS.

Banks, insurance companies and other financial institutions: Requiredto use IFRS.

Separate company financial statements: These follow IFRS.

IFRS endorsement




Endorsement process for new or amended IFRSs? Endorsement is notneeded. New or amended Standards are automatically effective whenthey are issued by the IASB for companies that use IFRS.


Which standards do SMEs follow? Saint Lucia has adopted the IFRS forSMEs. All companies that do not use full IFRS are required to use the IFRS

for SMEs.

g q p y(listed companies and financial institutions)

Listed companies: IFRS required.

Financial institutions: Banks and other financial institutions must usefull IFRS.

Separate company financial statements: IFRS required.

IFRS endorsement




Endorsement process for new or amended IFRSs? The law requires useof IFRS without need for endorsement of individual Standards.


Which standards do SMEs follow? The IFRS for SMEs is permitted. Alternatively, SMEs may choose full IFRS. The Institute of Certified Public Accountants of Rwanda acknowledges that, in practice, some SMEs thatuse the IFRS for SMEs do use the revaluation model in IAS 16 Property, Plantand Equipment even though that model is not an option in the IFRS for SMEs.


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Suriname



St Vincent and theGrenadines




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( t d o pa a d a a t tut o )

Listed companies: The laws of Suriname and the regulations of theSuriname Stock Exchange neither require nor prohibit IFRS or any otherspecific accounting framework.

Financial institutions: IFRS permitted.

Separate company financial statements: IFRS permitted.

IFRS endorsement




Endorsement process for new or amended IFRSs? There is noendorsement process, because IFRS is neither required nor explicitlypermitted nor prohibited.


Which standards do SMEs follow? The laws of Suriname neither requirenor prohibit IFRS or the IFRS for SMEs or any other specific accountingframework.


Listed companies: St Vincent and the Grenadines follows therequirements of the Eastern Caribbean Securities Regulatory Commission(ECSRC). The ECSRC is the regulatory body for the Eastern CaribbeanSecurities Market (ECSM, which is the regional securities marketfor Anguilla, Antigua and Barbuda, Commonwealth of Dominica,Grenada, Montserrat, St Kitts and Nevis, Saint Lucia and St Vincent andthe Grenadines). ECSRC regulations require the use of internationalaccounting standards. Although IFRS is not specifically named in thelegislation, it is generally accepted to be IFRS, and all listed companiesfollow IFRS.

Banks, insurance companies, and other financial institutions: Required

to use IFRS.Separate company financial statements: These follow IFRS.

IFRS endorsement




Endorsement process for new or amended IFRSs? Endorsement is notneeded. New or amended Standards are automatically effective when

they are issued by the IASB for companies that use IFRS.


Which standards do SMEs follow? St Vincent and the Grenadines hasadopted the IFRS for SMEs. All companies that do not use full IFRS arerequired to use the IFRS for SMEs.


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Ifrs as Global Standards