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Saturday 25 October 2014

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IFRS application around the world

 Analysis of the IFRS jurisdiction 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 138 jurisdictions, including all of the G20 jurisdictions plus 118 others.

The 138 jurisdictions represent all parts of the globe, as follows:

 

Number of Jurisdictions Percent of total
Europe 42 30%
Africa 20 15%
Middle East 7 5%
Asia and Oceania 32 23%
Americas 37 27%
Totals 138 100%

 

The following overall observations can be made about the information in the profiles describing how IFRS are applied in each of the 138 jurisdictions:

  1. Commitment to a single set of global accounting standards: Nearly all of the jurisdictions (128 of the 138) have made a public commitment supporting a single set of high quality global accounting standards. Only Albania, Belize, Bermuda, Cayman Islands, Egypt, Macao, Paraguay, Suriname, Switzerland and Vietnam have not.
  2. Commitment to IFRS: The relevant authority in all but 8 of the 138 jurisdictions (Belize, Bermuda, Cayman Islands, Egypt, Macao, Suriname, Switzerland and Vietnam) has made a public commitment to IFRS as the single set of global accounting standards. Even in the absence of a public statement, IFRS are commonly used by publicly accountable entities (listed companies and financial institutions) in Belize, Bermuda, Cayman Islands, and Switzerland.
  3. Adoption of IFRS: 114 jurisdictions (82 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 2 of those have already begun using IFRS. Bhutan and Colombia will begin using IFRS in 2021, and 2015 respectively. Some comments on the remaining 24 jurisdictions that have not adopted:
    1. Twelve jurisdictions permit, rather than require, IFRS: Bermuda, Cayman Islands, Guatemala, Honduras, India, Japan, Madagascar, Nicaragua, Panama, Paraguay, Suriname, Switzerland;
    2. Two jurisdictions require IFRS for financial institutions but not listed companies: Saudi Arabia, Uzbekistan;
    3. One jurisdiction is in process of adopting IFRS in full: Thailand;
    4. One jurisdiction is in process of converging its national standards substantially (but not entirely) with IFRS: Indonesia; and
    5. Eight jurisdictions use national or regional standards: Bolivia, China, Egypt, Guinea-Bissau, Macao, Niger, United States, Vietnam.

The 114 jurisdictions classified as requiring IFRS for all or most domestic publicly accountable entities 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 114 also include several jurisdictions that have adopted IFRS word for word as their national accounting standards (including Australia, Hong Kong, and New Zealand).

The 114 also include four jurisdictions that have adopted recent, but not the latest, bound volumes of IFRS: Macedonia (2009); Myanmar (2010); Sri Lanka (2011); and Venezuela (2008). Those jurisdictions are working to update their adoption to the current version.

The 138 profiles include all 31 member states of the European Union and the European Economic Area, where IFRS are required for all companies whose securities trade in a regulated market.

  1. Scope of use of IFRS: The 114 jurisdictions that require IFRS for all or most domestic publicly accountable entities include 7 that have no stock exchange but that require IFRS for all financial institutions (Afghanistan, Angola, Belize, Brunei, Kosovo, Lesotho, Yemen).  Of the 107 jurisdictions that do have stock exchanges, 6 do not require IFRS for listed financial institutions (Argentina, El Salvador, Israel, Mexico, Peru, Uruguay) though they do require IFRS for other listed companies. All of the others require IFRS for all listed companies. Around 60 per cent of the 114 jurisdictions that require IFRS for all or most domestic publicly traded companies also require IFRS for some domestic companies whose securities are not publicly traded, generally financial institutions and large unlisted companies. Over 90 per cent of the 114 jurisdictions that require IFRS for all or most domestic publicly traded companies also require or permit IFRS for all or most non-publicly traded companies.
  2. Few modifications: The 138 jurisdictions made very few modifications to IFRS, and the few that were made are generally regarded as temporary steps in the jurisdiction’s plans to adopt IFRS. 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. Several modifications related to IASB agenda projects that are now completed, including loan loss provisioning, use of the equity method to account for subsidiaries in separate company financial statements, and bearer agricultural assets. Jurisdictions have already begun eliminating those modifications. Several other modifications relate to projects currently on the IASB's agenda, including accounting for rate-regulated activities. A few jurisdictions deferred the effective dates of some Standards, particularly IFRSs 10, 11 and 12 and IFRIC 15, though many of those deferrals have now ended.
  3. Auditor’s report: In 82 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 23 remaining jurisdictions the auditor’s report refers to conformity with national standards.
  4. IFRS for SMEs: 69 of the 138 jurisdictions require or permit the IFRS for SMEs, and it is currently under consideration in an additional 15 jurisdictions.

IFRS provide the financial information for capital markets covering over half of the world’s GDP:

  1. Analysis of IFRS jurisdictions by GDP shows that capital market investors and lenders in jurisdictions with 58% of the world’s GDP receive IFRS financial statements.  IFRS are also used in some of the remaining economies, for example, by nearly 500 foreign companies whose securities trade in the United States.
  2. While the European Union is the single biggest part of the IFRS usage base, the non-EU/EEA jurisdictions that use IFRS also are a large component of the IFRS users.   All EU/EEA jurisdictions require IFRS for all or most domestic listed companies.  The 2012 GDP of those 31 jurisdictions totals $17.2 trillion US dollars.  The combined 2012 GDP of the non-EU/EEA jurisdictions that either require or permit IFRS for all or most domestic listed companies is $23.8 trillion.

This page was last updated 9 October 2014.

 

Contact

Paul Pacter
Former Board member and project manager
email: ppacter@ifrs.org