The understanding of the structure of the IASB and its role in the determination of IFRSs much of which information has been obtained from the website of the IASB’s official website www.ifrs.org. To keep up to date with what the IASB is doing, this website should be frequently visited. Other useful websites include Ernst & Young, www.ey.com, and the Deloitte IAS Plus website.
When was the IASB formed?
In 1972, at the 10th World Congress of Accountants in Sydney, Australia, a proposal was put forward for the establishment of an International Accounting Standards Committee (IASC). In 1973, the IASC was formed, with nine countries — Canada, the United Kingdom, the United States, Australia, France, Germany, Japan, the Netherlands and Mexico — sponsoring the committee.
By December 1998, the membership of the IASC had expanded and the committee had completed its core set of accounting standards.
Why was the IASB formed?
However, the IASC was seen as having a number of shortcomings:
- It had weak relationships with national standard setters; this was due in part to the fact that the representatives on the IASC were not representative of the national standard setters but rather of national professional accounting bodies.
- There was a lack of convergence between the IASC standards and those adopted in major countries, even after 25 years of trying.
- The board was only part time.
- The board lacked resources and technical support.
When exactly was the IASB borned? In 1998, the committee responsible for overseeing the operations of the IASC began a review of the IASC’s operations. The results of the review were recommendations that the IASC be replaced with a smaller, full-time International Accounting Standards Board (IASB). In 1999, the IASC board approved the constitutional changes necessary for the restructuring of the IASC. A new International Accounting Standards Committee Foundation was established and its trustees appointed. By early 2001, the members of the IASB and the Standards Advisory Council (SAC) were appointed, as were technical staff to assist the IASB.
The IASB initially adopted the International Accounting Standards (IASs), with some modifications, as issued by the IASC (e.g. IAS 2 Inventories). As standards were revised or newly issued by the IASB, they were called International Financial Reporting Standards (e.g. IFRS 8 Operating Segments). Hence, the term ‘IFRSs’ includes both IFRSs and IASs.