International Financial Reporting Standards Foundation (IFRS Foundation)
Definition
The International Financial Reporting Standards Foundation (IFRS Foundation) is a not-for-profit organization established to develop and maintain high-quality international financial reporting standards through its oversight of the International Accounting Standards Board (IASB). Formed in March 2001 as the International Accounting Standards Committee Foundation (IASC Foundation), it provides a framework for transparent and comparable financial reporting across global markets.
Examples
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Harmonization Across Countries: Multinational companies adhere to IFRS standards to ensure consistent accounting practices across their subsidiaries in different countries, improving transparency and comparability for investors.
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Financial Institutions Compliance: Major banks implement IFRS for detailed reporting of financial instruments, enhancing trust and stability in the international financial system.
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Cross-border Investment Facilitation: IFRS helps investors and analysts to compare financial performance across different jurisdictions, facilitating better investment decision-making in global markets.
Frequently Asked Questions (FAQ)
What is the main function of the IFRS Foundation?
The primary function of the IFRS Foundation is to develop globally accepted financial reporting standards through its oversight of the IASB. It ensures that these standards are applied consistently worldwide to promote transparency and comparability in financial statements.
Who governs the IFRS Foundation?
The IFRS Foundation is governed by 22 trustees from diverse geographical and functional backgrounds, including representatives from North America, Europe, Asia-Oceania, Africa, and South America. Their duties include appointing members of the IASB and ensuring the Foundation’s accountability to the International Financial Reporting Standards Monitoring Board.
How is the IFRS Foundation funded?
The IFRS Foundation is funded by contributions from various sources, including major accounting firms, private financial institutions, industrial companies, banks, and other international and professional organizations.
What is the International Accounting Standards Board (IASB)?
The IASB is an independent body within the IFRS Foundation responsible for developing and issuing International Financial Reporting Standards (IFRS). It ensures that these standards are upheld globally to maintain high-quality financial reporting practices.
What role does the International Financial Reporting Standards Monitoring Board play?
The IFRS Monitoring Board oversees the trustees of the IFRS Foundation to ensure their accountability and the integrity of the standard-setting process.
Related Terms
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International Accounting Standards Board (IASB): The standard-setting body within the IFRS Foundation responsible for developing International Financial Reporting Standards.
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International Financial Reporting Interpretations Committee (IFRIC): A committee within the IFRS Foundation that interprets and provides guidance on international accounting standards.
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International Accounting Standards Committee (IASC): The predecessor to the IASB, which set international accounting standards prior to the establishment of the IASB.
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IFRS Monitoring Board: An oversight body that ensures the IFRS Foundation trustees remain accountable and maintain the integrity of the financial reporting standards.
Online Resources
- IFRS Foundation Official Website - Comprehensive source for news, standards, and interpretations related to IFRS.
- IASB Official Page - Learn more about the IASB’s role and current projects.
Suggested Books for Further Studies
- Wiley IFRS 2020: Interpretation and Application of IFRS Standards by PKF International Ltd (Author)
- International Financial Reporting Standards (IFRS) Workbook and Guide: Practical insights, case studies, examples, multiple-choice questions, illustrations by Abbas A. Mirza (Author)
- Insights into IFRS: KPMG’s Practical Guide to International Financial Reporting Standards by KPMG (Author)
- IFRS: A Quick Reference Guide by Robert Kirk (Author)
Accounting Basics: “International Financial Reporting Standards Foundation” Fundamentals Quiz
Thank you for exploring in-depth details about the IFRS Foundation and enhancing your understanding of essential financial reporting standards. Keep striving for excellence in the world of accounting!
