IFRS Foundation


The International Financial Reporting Standards Foundation or IFRS Foundation is a nonprofit organization that sets corporate reporting standards for the capital markets globally founded on the belief that better information from companies leads to better investment decisions. Its main objectives include the development and promotion in the public interest a single set of high quality, understandable, enforceable and globally accepted International Financial Reporting Standards, through the International Accounting Standards Board for accounting standards and the International Sustainability Standards Board for sustainability-related disclosure standards.

History

In 2001, the International Accounting Standards Committee reformed itself under a new dual structure consisting mainly of an independent standard-setting body, the International Accounting Standards Board, and a foundation that appoints and funds the IASB, initially named the IASC Foundation. The IASB assumed accounting standard-setting responsibilities from the IASC on. The IASC Foundation changed its name to IFRS Foundation on.
During the first twenty years of activity, the IASB was the organization's dominant standard-setting body. In 2021, the foundation created a second standard-setting board, the International Sustainability Standards Board.
YearEventDescription
1973IASC foundedThe International Accounting Standards Committee is established by agreement among accountancy bodies from ten countries to harmonize accounting standards.
1988IOSCO joinsThe International Organization of Securities Commissions joins the IASC and begins cooperating to create a core set of international standards.
1997Strategic reviewThe IASC resolves to undertake a comprehensive restructuring to enable closer cooperation with securities regulators and make the standards enforceable worldwide.
2000IFRS Foundation launchedThe IFRS Foundation is established to replace the IASC and create a new governance structure. Trustees take oversight, and the IASB is established.
2001IASB foundedThe International Accounting Standards Board assumes responsibility for developing and publishing International Financial Reporting Standards.
2002"Norwalk Agreement"The IASB and the US Financial Accounting Standards Board sign the Norwalk Agreement to converge their respective accounting standards.
2005EU mandateThe European Union mandates the use of IFRS for the consolidated financial statements of all listed companies. This is a crucial step for the global spread of IFRS.
2009Monitoring Board establishedThe Monitoring Board is established to provide a formal link between the trustees and public authorities and to strengthen public accountability.
2010Name changeThe IASC Foundation is officially renamed the IFRS Foundation.
2015IFRS 9, 15, 16Completion of major IFRS projects on financial instruments, revenue from contracts with customers, and Leases, significantly changing global accounting practice.
2021ISSB foundedThe IFRS Foundation establishes the International Sustainability Standards Board at COP26 to develop global standards for sustainability disclosures.
2023S-Standards publishedThe ISSB publishes its first two standards: IFRS S1 and IFRS S2.

Governance structure

The IFRS Foundation has a three-tier governance structure, consisting of a Monitoring Board, trustees, and international standards setting boards. The organization develops standards intended to promote transparency, accountability and efficiency to capital markets around the world in the interest of fostering trust, growth and long-term financial stability in the global economy.

Monitoring Board

The Monitoring Board was established by the IFRS Foundation Trustees in New Delhi, India, in January 2009. The foundation is governed by a group of 22 trustees, themselves under the oversight of the Monitoring Board. Its aim is 'providing a formal link between the trustees and public authorities' in order to enhance the public accountability of the foundation.
The Monitoring Boards members, a group of capital markets authorities, are responsible for setting the form and content of financial reporting in their jurisdictions. Their responsibility is to protect and advance the public interest through the development of international accounting and sustainability disclosure standards. It consists of the following entities:
The Basel Committee on Banking Supervision serves as observers of the Monitoring Board.
The Monitoring Board's duties include participating in and approving trustee nominations, advising on Chair selections, reviewing financing and budgets, and overseeing the trustees' review of the standard-setting processes.

Trustees

The governance of the IFRS Foundation is primarily managed by the trustees, who may appoint other governing organs and are formally linked to public authorities via the Monitoring Board, with minor constitutional variations allowed by a 75% trustee majority. The trustees' responsibilities include governance, strategy and funding; due process oversight; and IASB, ISSB, IFRS Interpretations Committee and advisory body appointments to ensure the independence of the Board Members when adopting the standards. Trustees must offer balanced professional backgrounds and share a global interest in transparent corporate reporting. The foundation is obligated to conduct a comprehensive review of its strategy, effectiveness, and governance structure—including the geographical distribution of the trustees—at least every five years, with all proposals published for public comment.
As of 2024, the trustees include:
IFRS Foundation Trustee chairs, past and present:
The IFRS Foundation, via financial and sustainability standards defined by the IASB and ISSB, promote their rigorous worldwide application, address diverse entity needs, and facilitate convergence with national standards. IFRS standards primarily serve the needs of investors and capital market participants, but the ISSB ensures its sustainability disclosure standards are interoperable with other reporting initiatives to address the broader information needs of various stakeholders.

Accounting

The IASB is an independent group of experts with an appropriate mix of recent practical experience and broad geographical diversity, as required by the foundation's constitution.
IASB members are responsible for the development and publication of accounting standards, including the IFRS for SMEs Accounting Standard. The IASB works with the IFRS Interpretations Committee to support consistent application of the standards.
The accounting standards are required for use by more than 140 jurisdictions. The IASB’s work includes continually developing and improving the standards.

Sustainability

Responding to the need for consistent and comparable sustainability information to inform economic and investment decisions, in 2021 the IFRS Foundation created the ISSB, which operates alongside the IASB. The ISSB develops Sustainability Disclosure Standards, designed to deliver a truly global baseline of sustainability disclosures to inform capital markets.
The ISSB builds on the work of market-led investor-focused reporting initiatives, including the Climate Disclosure Standards Board, the Task Force on Climate-related Financial Disclosures, the Value Reporting Foundation’s Integrated Reporting Framework and industry-based SASB Standards.
The ISSB issued its inaugural Standards, IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures, in 2023. Jurisdictions around the world are determining how to adopt or use the Standards.

Digital taxonomies

The IFRS digital taxonomies facilitate the reporting of information prepared in accordance with IFRS standards in a computer-readable, structured data format. They consist of elements that can be used to tag information in financial reports prepared using the standards. Tagging makes information computer-readable and, therefore, more accessible to investors and other users of electronic company financial reports. The eXtensible Business Reporting Language is used to represent and deliver IFRS Taxonomy content. The digital taxonomies include the IFRS Accounting Taxonomy, the IFRS Sustainability Disclosure Taxonomy and the SASB Standards Taxonomy.

Organisation

The IFRS Foundation receives contributed revenue made up of voluntary contributions from jurisdictions, ISSB seed funding, philanthropic grants and contributions from companies. It receives earned revenue from intellectual property licensing, publications, subscriptions, membership fees, education programmes and conferences. It maintains a multi-location model with offices in London, Montreal, Frankfurt, Beijing, San Francisco, and Tokyo, to support its global mission.
Contributor/jurisdictionAmount Percentage
Canada7,982,21317.75%
Germany5,657,71912.58%
United Kingdom4,553,59510.12%
China4,273,5289.50%
Japan3,447,8577.67%
International Accounting Firms 3,094,5706.88%
European Union 2,588,5555.76%
United States2,455,0535.46%
Netherlands1,988,5204.42%
All other jurisdictions8,935,36319.86%
Total 44,976,973100.00%
its managing director is Michel Madelain. He leads the foundation’s strategic planning, governance, funding and expenditure activities and day-to-day operations. He also supports the work of the trustees and both boards.
DateVersion/reviewKey change summary
March 2000Original constitution approvedFirst approval
24 May 2000Constitution effectiveTrustees took office
6 Feb 2001IASC Foundation formedPart C deleted
5 March 2002RevisionIFRS Interpretations Committee created
8 July 2002AmendmentOrganizational changes
1 July 2005First five-yearly reviewFirst scheduled review
31 Oct 2007AmendmentMinor amendments
1 Feb 2009Second five-yearly review Public accountability & IASB size
1 March 2010Second five-yearly Rrview Name change to IFRS Foundation
23 Jan 2013AmendmentSeparation of IASB chair/executive director roles
Oct 2016Structure & effectiveness reviewStructure and effectiveness amendments
1 Dec 2018Narrow-Scope AmendmentExtended trustee terms
August 2020Due Process AmendmentAdvisory Council: strategic only
Oct 2021Sustainability Reporting AmendmentEstablished the ISSB