International Accounting Standards Committee (IASC)

International Accounting Standards Committee IASC Global Accounting Standards Financial Statements International Accounting Standards IASB
The International Accounting Standards Committee (IASC) was established in 1973 to set global accounting standards and was later superseded by the International Accounting Standards Board (IASB) in 2001.
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Definition

The International Accounting Standards Committee (IASC) came into existence in 1973 as a result of an agreement by accounting bodies from several countries. Its primary objectives were:

  1. Formulation and Publication of Accounting Standards: To create and publish standards that would be applicable globally.
  2. Promotion of Worldwide Acceptance: To ensure the accounting standards were accepted and implemented by various countries around the world.
  3. Harmonization of Regulations, Accounting Standards, and Procedures: To synchronize the accounting standards and regulations across different regions to ensure consistency and comparability of financial statements.

During its existence, the IASC published 29 International Accounting Standards (IAS). In 2001, the IASC was superseded by the International Accounting Standards Board (IASB).

Examples

  1. IAS 1 - Presentation of Financial Statements: One of the standards published by the IASC, which provides guidelines on how financial statements should be presented to ensure clarity and comparability.
  2. IAS 16 - Property, Plant and Equipment: This standard outlines how entities should account for their property, plant, and equipment, including the recognition, measurement, and depreciation of such assets.

Frequently Asked Questions (FAQs)

What was the primary objective of the IASC?

The primary objective of the IASC was to formulate and publish accounting standards that were globally accepted and to harmonize regulations, accounting standards, and procedures related to the presentation of financial statements.

When was the IASC established and by whom?

The IASC was established in 1973 through an agreement by accounting bodies from numerous countries.

How many International Accounting Standards did the IASC publish?

The IASC published a total of 29 International Accounting Standards (IAS) before its recognition as the global standard-setter ended.

Which organization replaced the IASC?

The International Accounting Standards Board (IASB) replaced the IASC in 2001.

What was the significance of the IASC?

The significance of the IASC lies in its efforts to create and promote global accounting standards, thus ensuring consistency and comparability across international financial statements.

  • International Accounting Standards (IAS): Standards published by the IASC to provide guidelines on various accounting practices.
  • International Accounting Standards Board (IASB): The organization that replaced the IASC in 2001. It continues to develop and promote global accounting standards.
  • Financial Statements: Records that outline the financial activities and condition of a business, individual, or entity.

Online References

  1. International Accounting Standards Board (IASB)
  2. History of the IASC and IASB
  3. IAS Plus on IASC and IASB

Suggested Books for Further Studies

  1. “International GAAP 2021” by Ernst & Young
  2. “Wiley IFRS 2021: Interpretation and Application of IFRS Standards” by PKF International Ltd
  3. “Financial Accounting and Reporting” by Barry Elliott and Jamie Elliott

Accounting Basics: “International Accounting Standards Committee (IASC)” Fundamentals Quiz

### What was the main function of the IASC established in 1973? - [ ] To audit financial statements globally - [ ] To create regional accounting standards only - [x] To formulate worldwide accounting standards - [ ] To replace national accounting bodies > **Explanation:** The main function of the IASC was to formulate and publish accounting standards that could be accepted and applied globally. ### How many International Accounting Standards (IAS) were published by the IASC? - [ ] 12 - [ ] 20 - [ ] 45 - [x] 29 > **Explanation:** The IASC published a total of 29 International Accounting Standards (IAS) before it was replaced by the IASB. ### Which organization took over the role of IASC in 2001? - [ ] American Institute of Certified Public Accountants (AICPA) - [ ] Financial Accounting Standards Board (FASB) - [ ] International Financial Reporting Standards (IFRS) - [x] International Accounting Standards Board (IASB) > **Explanation:** In 2001, the role of the IASC was assumed by the International Accounting Standards Board (IASB). ### The IASC aimed to harmonize regulations and procedures related to what aspect? - [ ] Tax laws - [x] Presentation of financial statements - [ ] Market conditions - [ ] Loan agreements > **Explanation:** The IASC aimed to harmonize regulations, accounting standards, and procedures related to the presentation of financial statements. ### What was the significance of the standards set by the IASC? - [ ] Ensured higher tax returns - [ ] Standardized global currency - [ ] Established free trade zones - [x] Promoted consistency in global financial reporting > **Explanation:** The standards set by the IASC promoted consistency and comparability in financial reporting across various countries. ### Which of the following is an example of an IAS published by the IASC? - [ ] IFRS 15 - [x] IAS 16 - [ ] GAAP 20 - [ ] FASB Standard 101 > **Explanation:** IAS 16 - Property, Plant and Equipment is an example of an International Accounting Standard published by the IASC. ### When was the IASC established? - [x] 1973 - [ ] 1980 - [ ] 2001 - [ ] 1965 > **Explanation:** The IASC was established in 1973. ### Which standard outlines the presentation of financial statements? - [ ] IAS 7 - [ ] IAS 8 - [x] IAS 1 - [ ] IAS 16 > **Explanation:** IAS 1 outlines the guidelines for the presentation of financial statements to ensure clarity and comparability. ### Did the IASC have a role in auditing financial statements? - [ ] Yes, they audited financial statements globally - [x] No, they only set standards - [ ] Yes, in collaboration with IFRS - [ ] No, they stayed region-specific > **Explanation:** The IASC did not audit financial statements; their role was to create and publish accounting standards. ### What was one of the objectives of the IASC? - [ ] Replace national tax laws - [ ] Redesign auditing procedures - [x] Harmonize accounting standards globally - [ ] Introduce new currencies > **Explanation:** One of the primary objectives of the IASC was to harmonize accounting standards worldwide.

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Tuesday, August 6, 2024
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International Accounting Standards Committee (IASC)
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