CFAS 01

• The International Accounting Standards Committee (IASC) was formed in 1973 to develop global accounting standards and issued 41 International Accounting Standards (IASs).
• The International Accounting Standards Board (IASB) replaced the IASC in 2001 with the main objective of developing a single set of high-quality, understandable, and enforceable global accounting standards.
• The 4 International bodies publicly urging the adoption of a single set of global accounting standards are:

  • World Bank
  • International Monetary Fund
  • International Organization of Securities Commission
  • Organization for Economic Cooperation Development
• The need for international accounting standards arises because accounting reports lack comparability and will lose credibility if a company reports different profit numbers in different countries for given transactions.
• Members of the IASB are appointed by the Trustees for a term of 5 years, renewable once. The Board normally comprises 14 members, with up to 3 part-time members.
• The objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors in making decisions about providing resources to the entity.
• The IASB has complete responsibility for all Board technical matters, including the preparation and issuing of IFRS Standards and Exposure Drafts.
• The IASB has revised many IASs and issued new standards called International Financial Reporting Standards (IFRS). It has no authority to require compliance with its accounting standards.
• Branches of Accounting

  • Financial Accounting
  • Management Accounting
  • Cost Accounting
  • Auditing
  • Government Accounting
  • Tax Accounting
  • Accounting Education
• Accounting Standards


  A network of board guidelines, rules, and procedures that represent the generally accepted accounting principles, defining the practice of financial reporting at a particular time.
• The IASB publishes an Exposure Draft on all projects and normally a discussion document for public comment on major projects.
• In exceptional circumstances, the IASB can reduce the period for public comment on an Exposure Draft with prior approval from 75% of the Trustees.
• The IASB structure includes the IASC Foundation, IASB, Standards Advisory Council, and the International Financial Reporting Interpretations Committee.
• IASB considers undertaking field tests to ensure proposed Standards are practical and workable in all environments, although not required for every project.
• IASB consults the Advisory Council on major projects, agenda decisions, and work priorities.
• IFRS Interpretations Committee meetings

  1. Shall meet as and when required with 10 voting members constituting a quorum.

  2. Approval of draft or final IFRIC Interpretations requires not more than 4 voting members to vote against.
• IASB

  Normally publishes a Basis for Conclusions with a Standard or an Exposure Draft.
• The IFRS Interpretations Committee comprises 14 voting members, appointed by the Trustees for renewable terms of 3 years.
• IASB's technical agenda development

  1. Consulting the Trustees and the Advisory Council

  2. Carrying out a public consultation every 5 years from the most recent public agenda consultation
• The IFRS Foundation is the new name, approved in January 2010, of the IASC Foundation, formally taking effect on July 1, 2010.
• The Trustees appoint the members of the IASB, the Standing Interpretations Committee, and the Standards Advisory Council.
• IASB considers holding public hearings to discuss proposed Standards, although not required for every project.
• There are 22 Trustees, normally appointed for a term of 3 years, renewable once.
• The International Accounting Standards Board (IASB) has full discretion in developing and pursuing its technical agenda.
• Approval of final IFRIC Interpretations requires approval by 8 members if there are 13 or fewer members, or by 9 members if there are 14 members.
• Members of the Advisory Council are appointed by the Trustees.
• The International Accounting Standards Board and IFRS Interpretations Committee use the Due Process Handbook (2020) as their basis in due process for financial reporting.
• Prior to 2001, Philippine accounting standards were based on standards promulgated by the Financial Accounting Standards Board (FASB) of the USA.
• The Advisory Council advises the Board on agenda decisions and priorities, informs the Board of views on major standard-setting projects, and gives other advice to the Board or the Trustees
• The Advisory Council was formerly called the Standards Advisory Council
• The Advisory Council normally meets at least two times a year, and meetings are open to the public
• Approval of draft or final IFRIC Interpretations shall require that not more than four voting members vote against
• Quorum for meetings: one or two Board members shall be designated by the Board and shall attend meetings as non-voting observers; other members may attend and speak
• In 1997, the ASC decided to transition totally to International Accounting Standards.
• The Philippine transition to IAS was made on a staggered basis, effective from 2001.
• The Interpretations Committee interprets the application of IFRS Standards, provides guidance on financial reporting issues not specifically addressed in the Standards, and undertakes tasks at the request of the Board
• The due process stages includes the:

  1. setting the agenda
  2. planning the project
  3. developing and publishing the discussion paper
  4. developing and publishing the exposure draft
  5. developing and publishing the standard
  6. post-implementation review
• The Interpretations Committee works actively with national standard-setters to bring about convergence of national accounting standards and IFRS Standards.
• The Advisory Council comprises 30 or more members with diverse geographical and professional backgrounds, appointed for renewable terms of 3 years.
• Factors considered by ASC in moving to International Accounting Standards

  • Support of IAS by Philippine organizations
  • Increasing internationalization of business
  • Improvements of IAS
  • Increasing recognition of IASB standards