The Status and Use of IAS/IFRS Around The World: Introduction: Where Have IFRS Standards Been Adopted?

Module 2: The status and use of IAS/IFRS around the world
Introduction: Where have IFRS Standards been adopted?

- In many countries, stock exchange listing requirements or national securities
legislation permit (or sometimes require) foreign companies that issue securities in
those countries to prepare their consolidated financial statements using IFRS
Standards.
- Since 1 January 2005, all publicly listed companies in the European Union have
been required to prepare their financial statements in conformity with IFRS
Standards.
UK  fully listed and AIM listed companies:
- must prepare their financial statements in accordance with IFRS
Standards.
 other companies: may choose to do so.
- adopted national standards that are IFRS Standards-equivalents.
Australia - must be used by all domestic listed companies & some large unlisted
& companies.
New Zealand
- they are permitted for other companies.
countries split between those:
- that require domestic listed companies to use IFRS Standards: South
Africa
Africa, Ghana and Kenya.
- that permit their use and those that prohibit their use.
 Hong Kong, and Malaysia: have issued national standards that
are identical to IFRS Standards.
Asia  Singapore: FRSs are converged with IFRS Standards with some
minor exceptions.
 Korea: translated IFRS Standards word for word to become Korean
GAAP.
India - allows IFRS Standards to be used in consolidated financial statements.
- developed Ind-AS which are similar to IFRS Standards (although not
fully converged).
China - IFRS Standards may not be applied.
- CAS are substantially converged & remaining differences will be
eliminated over time.
Japan - Differences between Japanese GAAP and IFRS Standards have been
reduced & new Japanese standards issued in the future will be in line
with IFRS Standards.
 Several economies: require the use of IFRS Standards for
South domestic listed companies: Brazil, Chile, Mexico and Ecuador.
America  Argentina: require some listed companies to prepare financial
statements in accordance with IFRS Standards.
 Bolivia and Paraguay: allow but do not require the use of IFRS
Standards for domestic listed companies.
North  Canada: adopted IFRS Standards in full as Canadian FRSs with
America effect.
 USA: domestic listed companies are not permitted to use IFRS
Standards.
2002: The IASB meets the US Financial Accounting Standards Board (FASB). They
conclude the Norwalk Agreement, a memorandum of understanding that commits the
boards to work together to remove differences between IFRS Standards and US GAAP
and to co-ordinate their future work programmes
 Choose whether IFRS Standards are required or not permitted for use by domestic
listed companies in the following countries.
(Required – ‫ مطلوبة‬not permitted ‫)غير مسموج بها‬
 IFRS for Small and Medium-sized Entities (IFRS for SMEs (:

- Published in July 2009.
- is designed for non-publicly accountable entities, meaning it cannot be applied by
listed companies. Other non-eligible companies include banks, insurance companies
and securities brokers/dealers.
- is derived from full IFRS Standards with appropriate modifications based on the needs
of users of SME financial statements and cost-benefit considerations.
- The IFRS for SMEs Standard is available for any jurisdiction to adopt, whether or not it
has adopted full IFRS Standards. it may not be used by public entities or financial
institutions.
Questions
1. Which national standards are closest to the IASB's?

- Several countries have adopted IFRS Standards to be their own national
standards, without any modification. These countries include South Korea,
Australia and Hong Kong.
2. Is it necessary to adhere to all requirements of IFRS Standards for

financial statements to state compliance?
- Yes, in order to claim compliance with IFRS Standards, all the requirements of
the IFRS Standards must be met. There are no exceptions. Use of local GAAP
and IFRS Standards together is not allowed.
Q: Which of the following countries prohibits the use of IFRS Standards by

domestic listed companies?
The correct answer is D

Chinese companies may not apply IFRS Standards, however Chinese Accounting
Standards (CAS) are substantially converged with IFRS Standards and it is expected that
remaining differences will be eliminated in the future.
Q: Which of the following type(s) of entity is (are) eligible to use the

IFRS for SMEs Standard?
1. An unlisted bank
2. A listed company that meets size thresholds for a small entity
3. An unlisted company of any size.
The correct answer is B
The IFRS for SMEs Standard may only be applied by non-publicly accountable entities i.e.
unlisted entities. It may not be applied by financial institutions.
Q: What is the Norwalk Agreement?
The correct answer is C
Q: Which of the following statements is true?
The correct answer is C

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Module 2: The status and use of IAS/IFRS around the world

Introduction: Where have IFRS Standards been adopted?

 IFRS for Small and Medium-sized Entities (IFRS for SMEs (:

1. Which national standards are closest to the IASB's?

2. Is it necessary to adhere to all requirements of IFRS Standards for

Q: Which of the following countries prohibits the use of IFRS Standards by

The correct answer is D

Q: Which of the following type(s) of entity is (are) eligible to use the

Q: What is the Norwalk Agreement?

The correct answer is C

Q: Which of the following statements is true?

The correct answer is C

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