Analysis of the IFRS jurisdictional 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.
Currently, profiles are completed for 122 jurisdictions, including all of the G20 jurisdictions plus 102 others. The following overall observations can be made about the information in the profiles describing how IFRSs are applied in each of the 122 jurisdictions:
- Commitment to a single set of global accounting standards: Nearly all of the jurisdictions (115 of the 122) have made a public commitment supporting a single set of high quality global accounting standards. Only Albania, Bermuda, Cayman Islands, Egypt, Macao, Paraguay and Switzerland have not.
- Commitment to IFRSs: The relevant authority in all but 5 of the 122 jurisdictions (Bermuda, Cayman Islands, Egypt, Macao, and Switzerland) has made a public commitment to IFRSs as the single set of global accounting standards. Even in the absence of a public statement, IFRS are commonly used by listed companies in Bermuda, Cayman Islands, and Switzerland.
- Adoption of IFRSs: 101 jurisdictions (83 per cent of the profiles) require IFRS for all or most domestic publicly accountable entities (listed companies and financial institutions) in their capital markets. All but 3 of those have already begun using IFRSs. Brunei, Bhutan, and Colombia will begin using IFRSs in 2014, 2015, and 2021 respectively. Some comments on the remaining 21 jurisdictions that have not adopted:
- Ten jurisdictions permit, rather than require, IFRS: Bermuda, Cayman Islands, Guatemala, Honduras, India, Japan, Madagascar, Paraguay, Singapore, Switzerland;
- Two jurisdictions require IFRS for financial institutions: Uzbekistan, Saudi Arabia;
- Two jurisdictions are in process of adopting IFRS in full: Indonesia, Thailand; and
- Seven jurisdictions use national or regional standards: Bolivia, China, Egypt, Guinea-Bissau, Macao, Niger, United States.
The 101 jurisdictions classified as having adopted IFRSs include the EU Member States to which the IAS 39 ‘carve-out’ applies. The carve-out affects fewer than two dozen banks out of the 8,000 IFRS companies whose securities trade on a regulated market in Europe.
The 101 also include several jurisdictions that have adopted IFRSs word for word as their national accounting standards (including Australia, Hong Kong, and New Zealand).
The 101 also include four jurisdictions that have adopted recent, but not the latest, bound volumes of IFRSs: Macedonia (2009); Myanmar (2010); Sri Lanka (2011); and Venezuela (2008). Those jurisdictions are working to update their adoption to the current version.
The 122 Profiles include all 31 member states of the European Union and the European Economic Area, where IFRSs are required for all companies whose securities trade in a regulated market.
- Scope of use of IFRSs: 93 of the 101 jurisdictions require IFRSs for all domestic publicly traded companies; 8 additional jursidictions require IFRSs for all domestic publicly traded companies other than financial institutions. Around 60 per cent of 101 jurisdictions that require IFRSs for all or most domestic publicly traded companies also require IFRSs for some domestic companies whose securities are not publicly traded, generally financial institutions and large unlisted companies. Over 90 per cent of the 101 jurisdictions that require IFRSs for all or most domestic publicly traded companies also require or permit IFRSs for all or most non-publicly traded companies.
- Few modifications: The 122 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. For example, the EU itself describes its IAS 39 ‘carve-out’ as ‘temporary’, and 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. The IASB currently has projects on its agenda to address most of the other modifications, including use of the equity method to account for subsidiaries in separate company financial statements; loan loss provisioning; and accounting for rate-regulated activities. A few jurisdictions have deferred the effective dates of some Standards, particularly IFRSs 10, 11 and 12 and IFRIC 15.
- Auditor’s report: In 70 jurisdictions, the auditor’s report (and/or basis of presentation note) refers to conformity with IFRS. In another 33 jurisdictions the auditor’s report refers to conformity with IFRS as adopted by the EU (including the 31 EU/EEA member states plus EU itself plus Albania, a potential accession country). In the 19 remaining jurisdictions the auditor’s report refers to conformity with national standards.
- IFRS for SMEs: 57 of the 122 jurisdictions require or permit the IFRS for SMEs, and it is currently under consideration in an additional 16 jurisdictions.