Question

We have an interesting background question this week: What is the history of IFRS, the international financial reporting standards?

Answer 1

History of IFRS dates back to 1973. when ten nations Professional Accounting bodies formed International Accounting Standards Committee and decided to adopt a single set of Accounting Standards for cross border listings. This committee had completed forming its first such comprehensive set of Accounting Standards by 1990. The Standards then were called International Accounting Standards (IAS). However their existed various alternative accounting treatments in then devised Standards. These were resolved to be reduced and by 1993 choices of treatments were reduced considerably.

In year 1996 Standards Interpretations Committee (SIC) was also established to prepare interpretations for Standards. These interpretations are also recognized as part of IAS.

In year 2000 IASC was decided to be restructured as IASB, International Accounting Standards Board, which adopted IAS. Along side, IFRS foundation was also established. IASB was and is an independent body. And it started publishing accounting standards with a different nomenclature, known as International Financial Reporting Standards (IFRS) since then. In 2001 first IFRS was published as IFRS 1, First-time Adoption of International Financial Reporting Standards. And since then any new (IFRS) or a considerably revised accounting standard (IAS) is being issued as IFRS. Thus, IFRS and adopted IAS are together called as IFRS. Interpretations issued also form part of IFRS and have equal standing.

IFRS have been adopted or converged to by various nations' accounting bodies, so as to meet global standards of accounting, in past years. It has been a long journey for Standards to come in this form.