Analysis of the G20 IFRS profiles
To assess progress toward the goal of global accounting standards, the IFRS Foundation is developing profiles of application of IFRS in individual jurisdictions. View the jurisdiction profiles.
The following observations relate to the information in the profiles of the members of the Group of Twenty (informally, the G20), which is the premier forum for international cooperation on the most important issues of the global economic and financial agenda. The G20 brings together finance ministers and central bank governors from the following 19 countries plus the European Union: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, the Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, and the United States of America.
- Commitment to a single set of global accounting standards. All of the G20 jurisdictions have made a public commitment supporting a single set of high quality global accounting standards.
- Commitment to IFRSs. The relevant authority in all of the G20 jurisdictions has made a public commitment to IFRSs as the single set of global accounting standards.
- Adoption of IFRSs. 14 of the G20 jurisdictions have adopted IFRSs for all or most companies in their public capital markets. Of the remaining 6 G20 jurisdictions:
- three permit IFRSs on a limited voluntary basis for domestic and/or foreign issuers (India, Japan, United States);
- one (Saudi Arabia) requires IFRSs on a limited basis (banks and insurance companies only);
- one (China) has substantially converged its national standards to IFRSs; and
- one (Indonesia) has adopted some IASs/IFRSs but has not announced a plan or timetable for full adoption.
- Scope of use of IFRSs. Of the 14 G20 jurisdictions that have adopted IFRS for all or most publicly traded companies, 11 require IFRSs for all; 2 (Mexico and Argentina) require IFRSs for all other than financial institutions; and 1 (Canada) allows US GAAP for some and has deferred IFRSs for some others. 13 of the 14 G20 jurisdictions that have adopted IFRSs for all or most publicly traded companies also permit IFRSs for all or most non-publicly traded companies.
- Few modifications. The G20 jurisdictions made very few modifications to IFRSs, and the few that were made are generally regarded as temporary steps in the jurisdiction’s plans to adopt IFRSs. There are 5 EU jurisdictions in the G20. While the EU did make an optional ‘carve-out’ from IAS 39 that the EU itself describes as ‘temporary’, the ‘carve-out’ has been applied by fewer than two dozen banks out of the 8,000 IFRS companies whose securities trade on a regulated market in Europe. 2 jurisdictions in the G20 require use of the equity method to account for subsidiaries in separate company financial statements; this issue is now under consideration by the IASB. And the EU deferred the effective dates IFRSs 10, 11 and 12 for one year to 2014, though early application is permitted.
- Auditor’s report. In 18 of the G20 jurisdictions, the auditor’s report refers to conformity with IFRSs. In China and Indonesia it refers to conformity with national standards.
- IFRS for SMEs. 7 G20 jurisdictions have either adopted the IFRS for SMEs or are actively considering it.