International Accounting Standards Board


The International Accounting Standards Board is the independent accounting standard-setting body of the IFRS Foundation.
The IASB was founded on April 1, 2001, as the successor to the International Accounting Standards Committee. It is responsible for developing International Financial Reporting Standards and for promoting their use and application.
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Background and semantics

The International Accounting Standards Committee had been established in 1973 and had issued a number of standards known as International Accounting Standards. As the organization was reformed in 2001, it changed the name of the standard-setting body from IASC to IASB, and established a foundation to oversee it, initially known as the IASC Foundation and renamed the IFRS Foundation in mid-2010. Also in 2001, it was decided that newly issued standards would be labeled IFRS instead of IAS, and that the entire set of IASC/IASB standards would also be known as IFRS.
In 2021, The IFRS Foundation introduced a new semantic twist as it decided to establish the International Sustainability Standards Board as a sister standard-setter to the IASB. Under the new terminology, IFRS consist of the combination of accounting standards issued by the IASB and of sustainability-related standards issued by the ISSB. The former are still labeled IFRS, and the latter are labeled IFRS-S. The entire set of standards, including IFRS and IFRS-S, is also collectively referred to as IFRS.

Members

The IASB originally had 14 full-time Board members, each with one vote. They are selected as a group of experts with a mix of experience of standard-setting, preparing and using accounts, market/financial regulation and academic work as well as from diverse geographical backgrounds. At their January 2009 meeting, the Trustees of the Foundation concluded the first part of the second Constitution Review, announcing the creation of a Monitoring Board and the expansion of the IASB to 16 members and giving more consideration to the geographical composition of the IASB. After the Trustees’ Review of Structure and Effectiveness in 2015, the number of members were in 2016 again set to 14 members.
The IFRS Interpretations Committee has 15 members. It is the IASB's interpretative body and its brief is to provide timely guidance on application issues that arise in practice.
A unanimous vote is not necessary in order for the publication of a Standard, exposure draft, or final "IFRIC" Interpretation. The Board's 2016 Constitution states that the publication of an Exposure Draft, or an IFRS Standard shall require approval by eight members of the Board, if there are 13 members or fewer, or by nine members if there are 14 members. Other decisions of the Board, including the publication of a Discussion Paper, shall require a simple majority of the members of the Board present at a meeting that is attended by at least 60 per cent of the members of the Board, in person or by telecommunications.
To ensure broad international balance, the IASB membership is typically structured geographically with four members each from Asia-Oceania, Europe, and the Americas, one from Africa, and one at large, subject to maintaining overall balance.
As of March 2021, the members included:
  • Andreas Barckow, Germany
  • Sue Lloyd
  • Nick Anderson, UK, Janus Henderson Investor
  • Tadeu Cendon, Brazil
  • Zach Gast, US
  • Jianqiao Lu, China
  • Bruce Mackenzie, South Africa
  • Bertrand Perrin, France
  • Tom Scott, Canada
  • Rika Suzuki, Japan
  • Ann Tarca, Australia
  • Mary Tokar, US
Former IASB members include James J. Leisenring, Robert P. Garnett, Mary Barth, David Tweedie, Gilbert Gélard, Warren McGregor, and Tatsumi Yamada.

List of IASB chairs

Due process

The Trustees of the IFRS Foundation have a Due Process Oversight Committee that is responsible for monitoring compliance with due process. The IASB Due Process Handbook describes the consultative arrangements of the IASB, and includes information on how standards are developed.

Research

In accordance with Section 37 of the IFRS Constitution, the Board exercises full discretion over its technical agenda, utilizing the research programme to analyze reporting problems and collect evidence on potential improvements, while also addressing broader issues to foster international debate on the evolution of financial reporting. To facilitate decision-making on the technical work plan, the Board publishes balloted Discussion Papers representing its collective views, as well as Research Papers or Requests for Information, approved by a simple majority, to gather evidence and public feedback on specific financial reporting issues before proceeding to a mandatory Exposure Draft..

Proposals

After a project is formally added to the agenda by a simple majority vote, the Board debates technical proposals in public meetings while consulting with mandatory advisory bodies like ASAF. The Board may establish optional consultative groups for major projects before reaching a technical agreement and summarizing the due process steps taken. This phase concludes with the mandatory publication of an Exposure Draft, which requires a supermajority ballot and is supported by public outreach activities.

Finalisation

Following the comment period for an Exposure Draft, the Board is mandated to consider all feedback received to determine redeliberation priorities or whether to discontinue the project. The Board must formally assess the need for re-exposure if fundamental changes are made and may optionally issue a "review draft" to allow for a final "fatal flaw" check before balloting. Once the DPOC is informed of the intent to proceed, the final Standard is issued via a supermajority ballot and must be accompanied by a Basis for Conclusions and a feedback statement.

Review

The Board must conduct a mandatory Post-implementation Review for each new Standard or major amendment, typically commencing two to three years after implementation, to assess its practical effect and determine if further standard-setting is required.

Endorsement process

The IFRS accounting standards are developed by the International Accounting Standards Board. To ensure appropriate political oversight, the regulation introduces a mechanism to assess the IFRSs and the related interpretations adopted by the London-based International Accounting Standards Board in order to give them enforceability within the EU. A new standard issued by the IASB requires formal endorsement by the EU before it can be applied. The IAS Regulation No 1606/2002 sets out a specific endorsement procedure managed by the European Commission, in conjunction with its consultative and advisory bodies. The endorsement process involves the European Financial Reporting Advisory Group, which provides independent expert advice to the Commission, and the Accounting Regulatory Committee, which is composed of representatives of EU countries and chaired by the European Commission. The EU's IFRS endorsement process begins with the IASB adopting a new standard or amendment, which is then technically assessed by EFRAG, formally approved by the Accounting Regulatory Committee, scrutinized by the European Parliament and Council, and finally made law by the European Commission through an adopting regulation. Every time a new standard is endorsed at the EU level, the Commission publishes an amending regulation, ensuring the new IFRS rules are directly applicable across all EU countries.

Funding

The IFRS Foundation raises funds for the operation of the IASB. The majority of the funding is voluntary contributions from jurisdictions that have put in place national financing regimes. The contribution is normally a percentage of the total gross domestic product of all contributing jurisdictions. Additionally, part of the contributions comes from the biggest accounting firms. In 2019, IFRS Foundation's revenue amounted to GBP 31 million, of which GBP 20 million came from contributions and GBP 11 million came from self generated revenue from publications and related activities.