Knowledge Guide to International accounting standards

The history and development of international standards for accounting and auditing goes back all the way to the late 1960s, but never have they reached greater prominence than today as we move closer to global convergence.

In this knowledge guide, the Library & Information Service aims to draw from its wealth of resources to help you find the information you need on international standards

Contents

• What are international accounting standards?
• History and development
• Sources for standards and interpretations
• International convergence
• Further reading
• Other international accounting standards

What are international accounting standards?

International accounting standards are accounting standards issued by the International Accounting Standards Board (IASB) and their predecessors which domestic listed companies, and sometimes unlisted companies, have been required to use in their financial statements in those countries which have adopted the standards. The EU regulation 1606/2002 made this a requirement for listed companies in the European Union. For other jurisdictions, please see our page on the Worldwide adoption of IFRS.

History and development

Our timeline highlights some of the most significant dates in the history of international accounting standards from the 1960s to 2005, but is not intended to be a comprehensive list of developments between these dates.

1966

The history of international accounting standards really began in 1966, with the proposal to establish an International Study Group comprising the Institute of Chartered Accountants of England & Wales (ICAEW), American Institute of Certified Public Accountants (AICPA) and Canadian Institute of Chartered Accountants (CICA). 

1967

In February 1967 this resulted in the foundation of the Accountants International Study Group (AISG), which began to publish papers on important topics every few months and created an appetite for change. Many of these papers led the way for the standards that followed, when in March 1973 it was finally agreed to establish an international body writing accounting standards for international use.

1973

In June 1973 the International Accounting Standards Committee (IASC) came into existence, with the stated intent that the new international standards it released must "be capable of rapid acceptance and implementation world-wide". The IASC survived for 27 years, until 2001, when the organisation was restructured and the IASC was replaced by the International Accounting Standards Board (IASB).

One of the most comprehensive accounts of this early history of international accounting standards is contained in Lord Benson's article 'The story of international accounting standards' which was published in Accountancy magazine in July 1976 (Volume 87, Number 995) on pages 34-39. A further source of information is Lord Benson's biography 'Accounting for life' which was published by Kogan Page, with the ICAEW, in 1989.

Between 1973 and 2000 the International Accounting Standards Committee (IASC) released a series of standards called 'International Accounting Standards' in a numerical sequence that began with IAS 1 and ended with IAS 41 Agriculture which was published in December 2000.

1997

The Standing Interpretations Committee (SIC) was established in 1997 to consider contentious accounting issues that needed authorative guidance to stop widespread variation in practice.

2000

February
The US Securities and Exchange Commission (SEC) issued a concept release on 24 February 2000 on the acceptability of international accounting standards. The ICAEW response was published in a technical release (TECH 16/00) and the Institute's principal observations were summarised in the press release Institute has no reservations in supporting International Accounting Standards on 19 May 2000. In the press release, Graham Ward, Deputy President of the ICAEW, commented "We have long looked forward to the time when financial statements prepared in accordance with international accounting standards are recognised by stock exchanges throughout the world."

May
The International Organisation of Securities Commissions (IOSCO) endorses IAS for use in connection with cross-border listings (as announced in a press release issued by IOSCO on 17 May 2000).

August
The ICAEW issued a policy statement (TECH 23/00) on the endorsement and enforcement of International Accounting Standards (IAS) within the EU which was summarised in the press release Institute supports steps to ensure that International Accounting Standards are effective in Europe released on 3 August 2000

2001

April
The IASC restructured their organisation at the end of the twentieth century, which resulted in the formation of the International Accounting Standards Board (IASB). These changes came into effect on 1 April 2001.

At the time the IASB stated that they would adopt the body of standards issued by the Board of the International Accounting Standards Committee (which would continue to be designated 'International Accounting Standards' [1]), but any new standards would be published in a series called International Financial Reporting Standards (IFRS) [2].

References:
[1] The IASB approved the 'IASB Resolution on IASC Standards' at their meeting in April 2001 which confirmed the status of all IASC Standards and SIC Interpretations in effect as of 1 April 2001.
[2] The IASB announced that the IASC Foundation Trustees had agreed that accounting standards issued by IASB would be designated 'International Financial Reporting Standards' in a statement dated 23 April 2001.

July
At the 23 July 2001 meeting of the Standards Advisory Council the IASB submitted a proposal to rename the Standing Interpretations Committee (SIC) as the International Financial Reporting Issues Committee (IFRIC) which was subsequently accepted. Following this change, releases from IFRIC were categorized as abstracts rather than interpretations. In December 2001 the Standing Interpretations Committee (SIC) was reconstituted as the International Financial Reporting Interpretations Committee (IFRIC).

2002

May
the IASB issued published a press release on 23 May 2002 announcing the publication of the Preface to International Financial Reporting Standards which Sir David Tweedie, IASB Chairman, said provided "a brief description of the purpose and function of the main structures of the new arrangements for setting global standards. As such, it is a short but essential introduction to the context within which the Board will frame its standards.”

June
On 6 June 2002 the European Council of Ministers approved the regulation that would require all EU companies listed on a regulated market to prepare accounts in accordance with International Accounting Standards for accounting periods beginning on or after 1 January 2005. The ICAEW welcomed the formal approval of the regulation as a landmark development in the creation of a single European capital market. Ian D Wright, Chairman of the Institute's Financial Reporting Committee, said: "The Institute has supported the European Commission through a lengthy political process to see this Regulation come into effect because we believe passionately in the benefits to business of truly international accounting standards."

July
The Regulation (EC) No 1606/2002 of the European Parliament and of the Council on the application of international accounting standards was adopted on 19 July 2002 by the European Parliament and the Council, requiring listed companies to use International Accounting Standards by 2005.

November
The ICAEW issued a memorandum to the Accounting Standards Board (ASB) on November 7 2002 entitled The Transition to IAS: The role of the ASB (TECH 20/02), in which the Institute highlighted their support for aligning UK accounting standards progressively with IAS, stressing the importance of minimising differences between UK GAAP and IAS "in order to maintain comparability between the accounts of listed and larger unlisted companies, avoid unnecessary complexity and prevent practical problems for companies seeking listed status."

2003

June
The first IFRS was published in June 2003 (IFRS 1: First-time Adoption of International Financial Reporting Standards).

July
The Department of Trade and Industry (DTI) issued the press release 'UK extends use of International Accounting Standards' on 17 July 2003 announcing that publicly traded companies in the UK would be permitted to use international accounting standards in their individual accounts from 2005 and that "other companies and limited liability partnerships in the UK will be permitted to use IAS in both their individual and consolidated accounts from the same date." The Institute issued a press release in support entitled 'ICAEW welcomes announcement that unlisted companies can opt to use IAS from 2005'.

September
The European Commission adopted a Regulation endorsing International Accounting Standards (IASs) on 29 September 2003 thereby confirming the requirement for their compulsory use from 2005. At the time Internal Market Commissioner Frits Bolkestein said that "Adoption by the Commission of this Regulation, endorsing most of the existing International Accounting Standards and publishing them in the EU's official languages, will help the 7000 or so listed EU companies affected to get ready for 2005, when their consolidated accounts will have to be in line with IAS. That will put an end to the current Tower of Babel in financial reporting, improve competition and transparency and make the free movement of capital much easier." The full text of the regulation (Adoption of certain international accounting standards in accordance with Regulation (EC)1606/2002) and accompanying press release are available online.

December
In Chancellor Gordon Brown's Pre-Budget Report 2003 speech on 10 December 2003 the Chancellor announced that 'firms applying international accounting standards will not have to submit a second and separate set of accounts to the Inland Revenue.'

2004

February
On 24 February 2004 the Inland Revenue published International Accounting Standards - The UK tax implications on their website. At the time the website stated that the Finance Bill 2004 would "include measures to ensure that companies choosing to adopt International Accounting Standards (IAS) to draw up their accounts will receive broadly equivalent tax treatment to companies that continue to use UK GAAP."

March
The DTI published a consultation document on the implementation of the accounting modernisation directive and arrangements for the use of IAS for companies and building societies - Modernisation of Accounting Directives/IAS Infrastructure.

November
On 12 November 2004 the Accounts Modernisation and Fair Value Directives came into force - The Companies Act 1985 (International Accounting Standards and Other Accounting Amendments) Regulations 2004 (SI 2947).

2005

Listed companies in the UK were required to present their financial statements using the international accounting standards adopted by the EU for periods commencing on or after 1 January 2005.

Sources for standards and interpretations

Standards (IAS/IFRS)

From 1973 until 2000 the International Accounting Standards Committee (IASC) released a series of International Accounting Standards (IAS).

In 2001 the International Accounting Standards Committee (IASC) was replaced by the International Accounting Standards Board (IASB) and all new standards published since then have been issued as International Financial Reporting Standards (IFRS).

On 17 April 2009 the IASB announced that they were making the text of unaccompanied standards (the current year's consolidated standards, excluding additional content such as illustrative examples and basis for conclusions) freely available from the IASB website. The standards can be accessed on the IASB website at http://www.iasb.org/IFRSs.

The ICAEW Library & Information Service also holds printed versions of the individual standards (as published) and annual volume of standards which provide consolidated versions of the standards, in addition to access to an online database with electronic versions of the standards. See the links below for full details of our holdings:

• ICAEW Library & Information Service holdings of IASC/IASB Handbooks, 1981-
• ICAEW Library & Information Service holdings of International Accounting Standards, 1973-2001
• ICAEW Library & Information Service holdings of International Financial Reporting Standards, 2001-

The ICAEW Library & Information Service's IFRS Portal includes links to reading lists, guides and other online resources for each standard which can be accessed through the links below:

IAS 1 | 2 | 7 | 8 | 10 | 11 | 12 | 16 | 17 | 18 | 19 | 20 | 21 | 23 | 24 | 26 | 27 | 28 | 29 | 31 | 32 | 33 | 34 | 36 | 37 | 38 | 39 | 40 | 41

IFRS 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8

Interpretations (SIC/IFRIC)

SIC Interpretations agreed by the Standing Interpretations Committee (SIC) and ratified by the International Accounting Standards Committee (IASB) were published between 1997 and 2001.

IFRIC Interpretations agreed by the International Financial Reporting Interpretations Committee (IFRIC) and ratified by the International Accounting Standards Board (IASB) have been published since 2001. An explanation of the process can be found on the IASB website at How we develop interpretations.

The full official text of the interpretations is included in the current edition of IASB Standards which is available in various formats from the International Accounting Standards Board (IASB). The ICAEW Library & Information Service holds printed copies of the individual interpretations and the current volume of standards, in addition to access to an online database with electronic versions of the interpretations. See the links below for full details of our holdings:

• ICAEW Library & Information Service holdings of IASC/IASB Handbooks, 1981-
• ICAEW Library & Information Service holdings of SIC Interpretations, 1997-2001
• ICAEW Library & Information Service holdings of IFRIC Interpretations, 2001-

You can obtain information about recent IFRIC interpretations and draft IFRIC interpretations through the IASB website from the IFRIC Projects section. The IAS Plus website from Deloitte also provides Summaries of interpretations, including those SIC and IFRIC interpretations which have been superseded.

Convergence with IAS/IFRS

The Library & Information Service provides a number of resources focusing on convergence between national GAAP and IFRS across the world, including:-

• Reading List: IFRS convergence and harmonisation
  To find out about how you can access any material in our reading list please see our book loans and document supply (by post, fax and email) pages. Alternatively, contact the enquiry team by telephone on +44 (0)20 7920 8620 or by email at library@icaew.com
• Links: Worldwide adoption of IFRS
• Links: IAS/IFRS and GAAP Comparisons

Further Reading

The collection of the Library & Information Service includes a growing volume of articles and journal articles on international accounting standards.

• Latest articles and books on international accounting standards

You can find more books and articles by searching LibCat, our online catalogue. If you would like assistance in identifying the materials you need, please call the enquiry team on +44 (0)20 7920 8620 or contact the enquiry team by email at library@icaew.com

The ICAEW Library & Information Service provides a book loan and document delivery service by post, fax and email - for further details please see our Service Guide.

Other international accounting standards

International Public Sector Accounting Standards (IPSAS)

The International Public Sector Accounting Standards Board (IPSASB) focuses on "the accounting and financial reporting needs of national, regional and local governments, related governmental agencies". The IPSASB issues International Public Sector Accounting Standards (IPSAS) for this audience which are published in full text within the IFAC Handbook of International Public Sector Accounting Standards (available from the IFAC website free of charge).

See also

• IFRS Technical Information (Financial Reporting Faculty)
• IFRS Portal (ICAEW Library & Information Service)
  includes links to articles/guidance and reading lists for each IAS in turn, a guide to locating standards and an IASC/IASB publications search tool.

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