WHAT IS IASB? WHAT ARE THE FUNCTIONS OF IASB?

Being the diligent accounting student that you are, you may know by now that the acronym IASB stands for International Accounting Standards Board.

However, are you aware of what IASB actually is and how it functions? All of that is going to be covered in this piece..

We start with this question:

What is the IASB?

The International Accounting Standards Board (IASB) is an independent, private organization, which is responsible for developing and approving international Financial Reporting standards.

The IASB is responsible for the development, approval, publishing and interpreting of International Financial Accounting Standards developed by the IFRS Interpretation Committee (IFRSIC)

Companies can prepare their financial statements using the Financial Reporting Standards provided by the IASB.

On April 1, 2001, the International Accounting Standards Board was established to replace the International Accounting Standards Committee (IASC).

Sir Henry Benson, a former president of the Institute of Chartered Accountants in England and Wales, was the driving force behind the creation of the International Accounting Standards Committee (IASC) in June 1973 in London.

Composition of the IASB

Each of the 14 board members who make up the IASB has one vote for technical and related issues. No member of the board may vote via proxy.

Each IASB member is appointed for a period of five years, with the option to renew for an additional three years and up to a maximum of five years.

Members of the International Accounting Standards Board often work full-time, and the IASB has its main office in London.

To ensure a broad international balance, the International Accounting Standards Board is expected to be made up of four members from the Asia-Oceania region, four members from Europe, Four members from the Americas, One member from Africa and one member appointed from any area, subject to maintaining overall geographical balance.

As of July 2021, IASB members are Andreas Barckow (chair), Sue Lloyd (vice chair), Nick Anderson, Tadeu Cendon, Zach Gast, Jianqiao Lu, Bruce Mackenzie, Bertrand Perrin, Tom Scott,  Rika Suzuki, Ann Tarca, Mary Tokar.

Functions of IASB

The three main tasks that the International Accounting Standards Board carries out are: creating globally recognized accounting standards, approving the interpretation of the IFRS Interpretations Committee, and converging national accounting standards and IFRS standards.

1. Develops globally accepted accounting standards:  This is arguably the most important function of IASB. 

The International Accounting Standards Board is responsible for developing, issuing and publishing easily understandable and highly consistent International Financial Reporting Standards that will aid in the preparation of financial statements that will help users make informed economic decisions.

2. Approve interpretations given by IFRS interpretations Committee: The International Accounting Standards Board is also tasked with giving final approval to, issuing, and publishing interpretation developed by the IFRS interpretations committee.

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3. Convergence of National Accounting standards to IFRS: The International Accounting Standards Board does not just develop IFRS accounting standards, It also actively promotes the active convergence of National Accounting Standards with IFRS accounting standards.

This is done to make sure that each country complies with and effectively enforces the developed IFRS accounting standards.

That will be all for now. Got questions? Feel free to ask me in the comment box.

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