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Contemporary Accounting

Notes 10.1 International Accounting Standard Board

The International Accounting Standards Board (IASB) founded on April 1, 2001 is the successor of
the IASC. It is responsible for developing International Financial Reporting Standards – a new
name for International Accounting Standards – and promoting and application of the standards.
The standards issued by IASB were named as International Financial Reporting Standards (IFRS).
The International Accounting Standards Board is an independent privately-funded accounting
standard board. Since its renaming, IFRS has issued 8 standards and had adopted many of the
earlier standards issued by IASC with and without modifications. IFRS is finding favor with
most of the advanced economies of the world.
The IASB has 15 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, and academic work. 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.

The IFRS Interpretations of Committee has 14 members. Its brief is to provide timely guidance
on 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 2008 Due Process manual
stated that approval by nine of the members is required.

Notes Need for Accounting Standards
Different business enterprises were having different modes of recording the transactions
and events and lack of uniform set of rules created a lot of problems, such as comparison
was not truly possible but difficult also this was because of the nature of business, diversified
and complex economic situations. This also made accounting information incomparable
and less meaningful. Therefore a need was felt to have certain minimum standards which
are universally applicable, so that the financial statements thus made, can be more reliable,
comparable, relevant and understandable. Keeping this in view, International Accounting
Standard Committee (IASC) was set up in 1973. The objectives of this Committee were:
To formulate and publish, in the public interest, accounting standards to be observed
in the presentation of financial statements and also its world wide acceptance, and

To work for improvement and harmonization of regulation of accounting standards
and procedure relating to the presentation of financial transactions.

Self Assessment

State true or false:

1. The International Accounting Standards Board (IASB) founded on April 1, 2001.
2. The IASB has 14 Board members, each with one vote.
3. The IFRS Interpretations OF Committee has 15 members.
4. The International Accounting Standards Board is an independent privately-funded
accounting standard board.

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