Int. Accounting Stds

International Accounting Standards

The International Accounting Standards Committee (IASC) is an independent, private sector body, formed in 1973 with the objective of harmonising the accounting principles which are used by businesses and other organisations for financial reporting around the world.

The members of IASC currently number 143 professional accounting bodies in 104 countries. Click here for a list of the IASC Member Organisations. Many other organisations are now involved in the work of IASC. International Accounting Standards are also used in many countries that are not represented within IASC's membership.

The Board of IASC has 16 members. It is responsible for developing and approving International Accounting Standards.

The crisis which began in 1998 in certain Asian countries and spread to other regions of the world showed the need for reliable and transparent accounting to support sound decision-making by investors, lenders and regulatory authorities. IASC has played a full part in meeting this need. In 1998, IASC completed the major components of the core set of Standards, as identified in an agreement with the International Organization of Securities Commissions (IOSCO) in July 1995. The core standards provide a comprehensive basis of accounting, covering all the major areas of importance to general businesses. They are of high quality - that is, they will result in transparency and comparability and they provide for full disclosure.

The July 1995 Agreement said that IOSCO would consider endorsing International Accounting Standards for cross-border capital raising and listing purposes in all global markets once the core set of Standards had been completed. Many stock exchanges accept International Accounting Standards for cross-border listing purposes, but notable exceptions are the United States and Canada. In October 1998, a declaration by the Finance Ministers and Central Bank Governors of the G7 countries called on IOSCO "to carry out a timely review" of the core standards. IOSCO has said that its Technical Committee will consider a report on any unresolved substantive issues in March 2000.

The G7 Finance Ministers and Central Bank Governors also committed themselves to endeavour to ensure that private sector institutions in their countries comply with internationally agreed principles, standards and codes of best practice. They called on all countries which participate in global capital markets similarly to commit to comply with these internationally agreed codes and standards.

Many countries already endorse International Accounting Standards as their own either without amendment or else with minor additions or deletions. Furthermore, important developments have taken place in the last two years in the European Union. Austria, Belgium, France, Germany, Italy, and Spain have passed laws allowing certain companies to use IASC standards for domestic reporting purposes, subject to certain conditions. The European Commission is studying the possibility of permitting or requiring all listed companies in the European Union to make greater use of International Accounting Standards. Both inside and outside the EU, many leading companies have stated that they prepare their financial reports in accordance with International Accounting Standards.

In December 1999, the Board of IASC approved proposals to make significant changes to IASC's structure, subject to confirmation by IASC's membership. The proposals include creation of a board of Trustees, and substantial revision to IASC's main operating body, the Board. The duties of the Trustees will include selection and appointment of IASC Board members, oversight of the organisation and fundraising. Implementation of the restructuring proposal began with the appointment of a Nominating Committee to appoint the initial group of Trustees. The members of the Nominating Committee are the Chairmen of four leading national securities regulators (in France, Hong Kong, the United Kingdom, and the United States), the President of the World Bank, the Chairman of the Supervisory Board of a major German company (who is also the Deputy Chairman of the German national accounting standards setter), and the Chief Executive Officer of Deloitte Touche Tohmatsu

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