January 29, 2022

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What is IFRS Foundation

What is IFRS Foundation
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The international financial reporting standard (IFRS) Foundation is the body responsible for all international accounting standards and interpretations. This body is located in Delaware in the United States and is controlled by a board of trustees. In this article, I will explain what this is about.

Definition of IFRS Foundation

IFRS Foundation is a non-profit organization “responsible for developing a single set of high-quality global accounting and sustainability disclosure standards, known as IFRS Standards.” It also means a body with the task of developing accounting standards and their interpretations for entities listed in the capital market.

Key Explanations of IFRS Foundation

IFRS Foundation is a not-for-profit international organization. They don’t make a profit by providing international financial accounting standards to the public. However, they are financed through donations. The board of trustees is responsible for the financing of the body.

The foundation was established in 2000 after the IASC Foundation was dissolved. The name change was to properly represent what they do. And ensure convergence of national accounting standards bodies. So that a single set of accounting standards is applicable worldwide.

IFRS Foundation first of all adopted all international accounting standards (IAS) developed by IASC Foundation. Next, they start developing their standards known as IFRS. As of the time of writing this article, there are IFRS numbers 1 to 17. They also issue IFRS for SMEs.

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IFRS Foundation had its structure which is made up of the monitoring board, the IFRS Foundation governance (that’s the trustees), the IFRS Advisory council, IASB (International Accounting Standards Board), and the IFRS Interpretation Committee. Each of these bodies has its duties and responsibilities.

The published IAS and IFRS are established to help preparers of financial statements present these statements in a way that meets international standards. The standards allow comparability among different financial statements by companies. It is said that financial information is the lifeblood of the capital market and rightly so. Investors rely on financial information when deciding on how to invest their surplus funds. Therefore, having all preparers of financial statements complying with a single set of IFRS enable all investors to invest across borders.

Conclusion

To wrap it up, IFRS Foundation is the body responsible for developing a single set of international financial reporting standards (IFRS) and its interpretations. The body ensures that investors have financial information that is reliable and relatable no matter the country. Preparers of financial statements in different parts of the world, including Nigeria, rely on these standards in preparing high-quality financial information.

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