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 124 jurisdictions, including all of the G20 jurisdictions plus 104 others. The following overall observations can be made about the information in the profiles describing how IFRS are applied in each of the 124 jurisdictions:
- Commitment to a single set of global accounting standards: Nearly all of the jurisdictions (116 of the 124) have made a public commitment supporting a single set of high quality global accounting standards. Only Albania, Bermuda, Cayman Islands, Egypt, Macao, Paraguay, Suriname, and Switzerland have not.
- Commitment to IFRS: The relevant authority in all but 6 of the 124 jurisdictions (Bermuda, Cayman Islands, Egypt, Macao, Suriname, and Switzerland) 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 listed companies in Bermuda, Cayman Islands, and Switzerland.
- Adoption of IFRS: 101 jurisdictions (81 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 IFRS. Brunei, Bhutan, and Colombia will begin using IFRS in 2014, 2015, and 2021 respectively. Some comments on the remaining 23 jurisdictions that have not adopted:
- Twelve jurisdictions permit, rather than require, IFRS: Bermuda, Cayman Islands, Guatemala, Honduras, India, Japan, Madagascar, Panama, Paraguay, Singapore, Suriname, 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 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 101 also include several jurisdictions that have adopted IFRS 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 IFRS: Macedonia (2009); Myanmar (2010); Sri Lanka (2011); and Venezuela (2008). Those jurisdictions are working to update their adoption to the current version.
The 124 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.
- Scope of use of IFRS: 93 of the 101 jurisdictions require IFRS for all domestic publicly traded companies; 8 additional jursidictions require IFRS for all domestic publicly traded companies other than financial institutions. Around 60 per cent of 101 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 101 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.
- Few modifications: The 124 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. 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 72 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: 58 of the 124 jurisdictions require or permit the IFRS for SMEs, and it is currently under consideration in an additional 16 jurisdictions.