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3

   International Financial Reporting Standards (IFRSs) 

IFRSs are created in accordance with due process. There are currently 28 IASs and 16 IFRSs in issue.  

3.1 The use and application of IFRSs 

IFRSs have helped to both improve and harmonise financial reporting around the world. The standards 

are used in the following ways. 



 As 

national requirements 



 As 

the 

basis for all or some national requirements 



 As 

an 

international benchmark for those countries which develop their own requirements 



 By 

regulatory authorities for domestic and foreign companies 



 

By companies themselves 

The consolidated accounts of listed companies in the UK have had to be produced in accordance with 

IFRSs since January 2005. This is a result of an EU regulation called 'IAS Regulation' that requires listed 

companies of EU member states to prepare their consolidated financial statements under IFRS. However 

in June 2016, the UK voted to leave the EU and is set to leave by early 2019. Until this time the UK is 

still an EU member state, but after it leaves, it will no longer be a member and will not be subject to EU 

law. Therefore, this reporting requirement could change after the exit. 

3.2 Standard-setting process 

The IASB prepares IFRSs in accordance with due process. You do not need to know this for your exam, 

but the following diagram may be of interest. 

The procedure can be summarised as follows. 

 Consultative 

Group 

   

 

 

 

 

 

 

 Board 

 

 

 

On acceptance 

 

 

 

 

 

Steering Committee (chaired 

by board members) 



Discussion Paper 

Public comment 

 

 

 

 

 

  

 

Exposure 

draft 

Public 

comment 

 

 

 

 

 

  

 IFRS 

 

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