CH 2

THE
REGULATORY
FRAMEWORK

Need for regulatory

framework
IASs
Setting of IFRSs

1. Need for regulatory framework

Toenforce
enforcecompliance
compliancewith
withGAAP
GAAP
To
Toenable
enablestructured
structured(or
(orordered
orderedor
or
To
controlled)evolution
evolutionofofGAAP
GAAP
controlled)

2.0 Structure of IASB

IFRS Foundation
(22 Trustees)
Appoints
Reports to

IASB
(15 Board Members)

Advises

IFRS Advisory
Council
Advisory
Committee
Director of
Operations

IFRS Interpretations
Committee (12
members)

Director of Technical
Activities

3.0 Setting of IFRSs

Advisory committee gives advice on
issues arising
IASB may develop and Publish Discussion
Paper
Following receipt and comments, IASB
would develop and Publish an Exposure
Draft.
Following receipt of comments, IASB would
publish a final IFRS

Current IASs/IFRSs

30
13

IASs
IFRSs

Alternative treatments
No more Benchmark and Alternative
treatments, ie, Borrowing Costs on
IAS 23
Some standards do allow more than
one Policy, ie, IAS 16

INTERPRETATIONS OF IFRSs
Done by IFRS IC

(Previously done by SIC)

Objectives:
To interpret the application of IFRSs
Publish draft interpretations for public comment
To report to board and seek board approval of final
interpretations.

Scope and interpretation of IFRSs

Scope: IFRSs to be applied to material
items only
Application: Within individual country
local regulation.

In favour of Accounting
Standards
Reduce variations/differences in the
methods used to prepare accounts
Provide a focal point for debate
about accounting practice.
Are less rigid
Force companies to disclose more
accounting information.

Against Accounting
Standards
Standards may be subject to lobying
by pressure groups or the Govt.
Many National Standards are not
based on. conceptual framework.
They are rigid.

?
Questions?