The International Accounting Standards Board (IASB) is an independent standard-setting body that develops and approves IFRS Accounting Standards, the financial reporting rules required or permitted for listed companies in more than 140 jurisdictions, including the European Union, the United Kingdom, Australia, Canada, Brazil, South Africa and many countries in Asia and the Middle East. Based in London, it is part of the IFRS Foundation, a not-for-profit organization that funds and oversees its work.
The IASB's aim is to produce a single set of high-quality, globally accepted accounting standards so that financial statements prepared in different countries are transparent and comparable. Its standards are the main alternative to US GAAP, set by the Financial Accounting Standards Board. The IASB has no legal power of its own; its standards become mandatory only when national or regional authorities adopt them into law or listing rules.
History
The IASB succeeded the International Accounting Standards Committee (IASC), founded in 1973 by professional accountancy bodies from a group of countries that included the United States, the United Kingdom, Japan and Germany. The IASC issued International Accounting Standards (IAS) but was a part-time body with limited authority. Following a restructuring, the IASB began work in 2001, adopting the existing IAS and issuing new standards under the name International Financial Reporting Standards. A turning point came in 2005, when the European Union required listed companies to use IFRS in their consolidated statements, followed by many other countries. In 2007 the US Securities and Exchange Commission allowed foreign companies listed in the United States to file IFRS statements without reconciling them to US GAAP.
Governance and structure
The IFRS Foundation's trustees appoint the IASB's members, oversee its strategy and raise its funds, mainly from contributions by jurisdictions and from publications. The trustees are in turn accountable to a Monitoring Board of capital markets authorities, including representatives of securities regulators such as the SEC, the European Commission and the Financial Services Agency of Japan. The Board itself has up to 14 members, selected for technical expertise and a geographical balance. It is supported by technical staff and by the IFRS Interpretations Committee, which addresses questions about how existing standards should be applied.
In 2021 the IFRS Foundation created a sister body, the International Sustainability Standards Board (ISSB), which issues IFRS Sustainability Disclosure Standards. The Foundation also took over the SASB standards and the monitoring of climate disclosures previously associated with the TCFD.
Due process
The IASB follows a public due process. Projects are added to its agenda after consultation, often starting with a discussion paper. Board meetings are held in public. The Board publishes exposure drafts of proposed standards or amendments for public comment, usually for at least 120 days, and holds outreach meetings and field tests before issuing a final standard. After a new standard has been in use for a few years, the Board carries out a post-implementation review to see whether it is working as intended.
Major standards
Notable IASB standards include IFRS 9 on financial instruments, which introduced the expected credit loss model; IFRS 15 on revenue recognition, developed jointly with the FASB; IFRS 16 on leases, which brought almost all leases onto lessees' balance sheets; and IFRS 17 on insurance contracts. IFRS 18, issued in 2024 and effective from 2027, replaces IAS 1 and introduces new required subtotals in the statement of profit or loss, including operating profit.
Criticism and challenges
The IASB has been criticized for producing complex standards that are costly to apply, for being slow in some areas and for the influence of large economies on its agenda. Fair value accounting in IFRS 9 and its predecessor came under political pressure during the 2008 financial crisis, when European authorities pushed for relief for banks. Convergence with US GAAP, pursued actively between 2002 and the mid-2010s, did not lead to US adoption of IFRS, and differences remain in areas such as leases and impairment. Some jurisdictions adopt IFRS with local amendments or carve-outs, which reduces comparability, and specialized bodies such as the AAOIFI set separate standards for Islamic financial institutions.