The IFRS Foundation has completed the first phase of an important initiative to assess the progress toward global adoption of IFRSs. The G20 has called for global adoption of a single set of high-quality financial reporting standards. This initiative is intended to provide a central source of information that permits interested parties to chart jurisdictional progress toward the achievement of that goal.
The completion of the first phase of this project sees the publication of IFRS profiles for all G20 jurisdictions, as well as profiles for a further forty-six jurisdictions that responded to a survey of national and regional bodies with overall responsibility for accounting standards within their jurisdiction. The profiles are available on the IFRS website. A second phase of the project is underway, and further profiles will be posted on the website during the coming months, with the ultimate goal of providing profiles for most jurisdictions in the world by the end of 2013.
Of the sixty-six jurisdictions that responded to the survey:
- Ninety-five percent have made public commitments supporting IFRSs as the single set of financial reporting standards suitable for global application.
- Eighty percent have already adopted IFRSs as a requirement for all or nearly all companies whose securities are publicly traded, while most of the remaining jurisdictions have made significant progress toward use of IFRSs.
- Jurisdictions that have adopted IFRS have made very few modifications to IFRSs, while the few that were made are generally regarded as temporary steps in the jurisdiction's plans to adopt IFRSs. Furthermore, in almost all cases, the IASB has active projects on its agenda that will result in an updated version of the standard to which the jurisdiction has made modifications.
- More than half of jurisdictions have either already adopted the IFRS for SMEs or are planning to do so in the near future.
The profiles describe each jurisdiction's decision regarding use of IFRSs. They also cover, if applicable, each jurisdiction's process for adopting or endorsing IFRSs under local law or regulations as well as the process (if any) for translating IFRSs into the local language.
In their February 2012 strategy review report, the trustees recognized that adoption of IFRSs is a voluntary public interest decision by the legislative and regulatory authorities in individual jurisdictions, and it is for individual public authorities to determine the most appropriate method for bringing IFRSs into national law. Regardless of the mechanics of IFRS adoption, the end result should be the same – full adoption of IFRSs in order to achieve the goal of a single set of global accounting standards.
The jurisdiction profiles were prepared by the IFRS Foundation under the direction of former IASB member Paul Pacter on the basis of information from multiple sources. The starting point was the answers provided by standard-setting and other relevant bodies in response to a survey that the foundation conducted between August and December 2012 on the application of IFRSs around the world. The foundation drafted the profiles and invited the respondents to the survey and others, including regulators and international audit firms, to review the drafts, and their comments are reflected in the published profiles.
Commenting on the initiative, Michel Prada, chairman of the IFRS Foundation Trustees, said: "This is an important initiative that seeks to describe progress around the world toward the G20-endorsed goal of a single set of high-quality global accounting standards. Collectively, the profiles illustrate the remarkable progress that has been achieved in little more than ten years. Although different countries are at different stages along the path to IFRS adoption, the direction of travel is clear and the momentum is unstoppable.
"I would like to thank the many people around the world who are helping us with this project, especially former IASB member Paul Pacter, whose knowledge has helped us to assemble such an impressive library of information."
Also, Hans Hoogervorst, chairman of the IASB, spoke extensively about this project during a speech given at the IFRS Asia-Oceania Policy Forum in Hong Kong. A copy of his speech – "Are We There Yet?" – is available to download from the IASB speeches section of the IFRS website.
Source: June 5, 2013, IFRS Press Release