Accountancy goes globar
The story of IFRS is a story of the increasing globalization of business and the consequent need for compatibility and comparability across borders. For many years, each country imposed its own accounting standards to report the financial condition of a company, which were generally known as "generally accepted accounting principles" (GAAP) and established independent accounting bodies to promote such principles.
In 2000, the EU decided to make international reporting standards set by the International Accounting Standards Committee (IASC) mandatory in all EU countries starting in 2005. The IASC was a multilateral accounting body founded in 1973 by the national accounting bodies of 10 countries, including the UK and the U.S.
Across the boards
IFRS is promoted by the London-based International Accounting Standards Board (IASB), an accounting body organized in 2001, in part to facilitate the EU mandate. The IASB took over the standard-setting responsibilities of the IASC as part of an overall rearrangement of how international standards are organized.
IFRS is by no means limited to Europe. Beginning in 2005, 100 countries will either be applying IFRS standards directly, or applying standards that mirror IFRS standards. In October 2002, the IASB signed a memorandum of understanding with the U.S. Financial Accounting Standards Board (FASB), with the objective of harmonizing U.S. and international standards.
The days of local accounting standards are clearly numbered, with a unified, global standard now on the horizon.
R.M.
In 2000, the EU decided to make international reporting standards set by the International Accounting Standards Committee (IASC) mandatory in all EU countries starting in 2005. The IASC was a multilateral accounting body founded in 1973 by the national accounting bodies of 10 countries, including the UK and the U.S.
Across the boards
IFRS is promoted by the London-based International Accounting Standards Board (IASB), an accounting body organized in 2001, in part to facilitate the EU mandate. The IASB took over the standard-setting responsibilities of the IASC as part of an overall rearrangement of how international standards are organized.
IFRS is by no means limited to Europe. Beginning in 2005, 100 countries will either be applying IFRS standards directly, or applying standards that mirror IFRS standards. In October 2002, the IASB signed a memorandum of understanding with the U.S. Financial Accounting Standards Board (FASB), with the objective of harmonizing U.S. and international standards.
The days of local accounting standards are clearly numbered, with a unified, global standard now on the horizon.
R.M.
