International Accounting Standards Board (IASB)

in This Video We discuss The International accounting standards board other know As The iasb so IB is the organization that creates International accounting standards and it was created in 2001 to replace an Organ called The International accounting standards committee The International accounting standards committee had multiple issues The First was basically it was a bunch People doing This it wasn't Full J to International and They didn't have a very large Staff some they were Ring on these volunteers that were helping them Draft The accounting standards and so The IC is Out they were replaced by the

iasb that Now creates The International accounting standards and the iasb is based Out Of London and their Goal is to Create A sle Set of Global accounting standards One A of accounting standards that could theoretically be used by All countries all firms in the world That's The Goal and so they issue What are called ifrs or International financial standards Okay so they they issue these ifrs and they're based On A Framework so The iasb has A conceptual Framework that they use to Guide them in creating International accounting standards and their standards are tend to be

More principles based So if We were to compare them for Example to the generally accepted accounting principles that are created US so We Think of Us GAP US GAP tends to be More Rules based More complicated explains a lot of the exceptions to the rule and so forth When they When The fasb creates a new Standard but the ifrs are More based on principles and thinking about Okay What is the principle Behind This accounting Standard so it's not As Complex and not As Long and lengthy As The standards that are issued by the fasb in

the United States Now The International accounting standards that are created by the iasb They have been adopted by More than 100 countries and something to Bear in Mind is this so The isb It's a Standard Setter It Just creates High Quality accounting standards That's What It's trying to do But ultimately it Can't Force any Country to adopt those accounting standards so and it enforce it Can't Go into Germany and Start Telling firms He you Haven been doing countries To ifrs and then To Go enforce and make that firms are preparing their financial statements according to

ifrs IB Just creates The standards I want to talk you a little about The structure of the isb typically People refer to it you Might hear iter structure and When they sayer structure For The isb and International accounting they to is this got got organizations Here We got the ifrs Foundation Monitoring board Right so they are Above The ifrs Foundation trustees so they oversee The Foundation trustees and these Foundation trustees they Select The board members The iasb so isb is the Most important organization Here Because they the one actually creating The accounting standards Right so

they're creating The ifrs That's The isb Role but the isb has about They have anywhere between 12 to 16 depending on What Year You Look at they They have different Number of members uh But They have these board members Who Put Together and issue these ifrs and They have a support Staff It's a much larger support Staff than they previously had When you had The International accounting standards committee there's a large support Staff that supports these board members at the isb As they Go and Create these ifrs But these board members are chosen by trustees

on This ifrs Foundation Now so That's This Is The Three tiered structure those three those three organizations Now The ifrs advisory council they Exist To provide advice and guidance in terms of you know putting Together standards what what are accounting issues that should be addressed they provide that advice to the board members on the iasb so there you can Think of them As support Group and there's Another support Group which is the ifrs interpretations committee So what the ifrs interpretations committee does is they'll basically Look at current issues or problems in International accounting and they'll

see If they can be addressed Within The existing ifrs Framework So what they're trying to do with This interpretation committee is not Go Out and issue New standards But to say Look based on the ifrs have been issued by the iasb Is there A way to settle a current issue in accounting Where Maybe there's diversity of practice so Two firms Are accounting For The Same transaction differently and the ifrs interpretations committee Comes in and Says OK based on the ifrs that currently Exist Is there A Way that We should say that This transaction should properly

be accounted for so We don't have multiple firms For The Same transaction differently When That's not allowed by ifrs So You can Think about The Counter usap Think issu TK Sim To interpretations committee and then there advisory council to the FB US GAP so US GAP inad having International accounting standards you have fasb Standard and then They have advisory council Foundation actually lot similarities in terms of the structure Of The International accounting standards these committees But not The Same Right these are All different organizations and so Now in terms of the hierarchy we have a

hierarchy Here in terms What Is The International accounting Because The to Most important is the If are stats issued International accounting standards toor in Internal accounting also have The International accounting standards before that issued by I so We got the iasc they had issued those and then the ifrs were issued by the iasb so Number One AT The Top We got the ifrs and have Inter Inter accounting still in Force But anything that has been issued by iasb that is the Most author so We got ifrs and then We got the Old International accounting standards

issued by I and then we have Third we have these interpretations again interpretations are issued by the ifrs interpretations committee and again This is to Try and clarify try clarify issues and and say He We got of Here We that based gotor ACC