International Accounting Regulations

Up to now, we have discussed accounting regulations and the bodies that oversee them in the United States. But what about companies that must answer to the accounting regulations of other countries?

Fortunately, there has been unprecedented convergence between the accounting standards for the United States and other countries over the last 30 years. Here is a brief recap of the history of this convergence.

In 1973, the International Accounting Standards Committee (IASC) was founded by accountancy bodies in Australia, Canada, France, Germany, Ireland, Japan, Mexico, the Netherlands, the United Kingdom, and the United States, with the goal of developing global accounting standards.

In 2001, the IASC was replaced by the International Accounting Standards Board (IASB), an independent entity based in London, in order to oversee the continued convergence of global accounting standards.

IASB comprises 14 board members appointed by the Trustees of the IASC Foundation, a parent organization. IASB has the sole responsibility of developing International Financial Reporting Standards (IFRS).

In 2005, all EU countries adopted IFRS. In addition, accounting standards for many countries outside of Europe, including Japan, are largely equivalent to IFRS.