Is your jurisdiction considering adopting IFRS Standards or the IFRS for SMEs Standard? Is there a standard approach? What is the process, and how can the IFRS Foundation assist you?
Every jurisdiction is different, and each has its own mix of expertise, professional infrastructure and regulatory interests. This might affect the means of adoption that is best suited.
The IFRS Foundation recommends adoption of IFRS Standards in a single step, but recognises that for some jurisdictions it may first be necessary to converge their local standards with IFRS Standards before moving to full adoption of IFRS Standards. We have an adoption guide which will provide invaluable guidance when mapping out your route to adoption.
The IFRS Foundation only allows the requirements of the Standards to be adopted into legislation. The IFRS requirements exclude additional material such as Bases for Conclusions, Implementation Guidance and Illustrative Examples. Any distribution of the additional material will require a separate licence. This is also the case for the IFRS for SMEs® Standard.
If a jurisdiction requires the IFRS requirements in English, or a language that already has an official translation, the IFRS Foundation will provide the requirements in the appropriate language. If an official translation does not yet exist, the IFRS Foundation will work with the appropriate entity to create a translation following the official translation process.
Each jurisdiction is allocated a project manager from the Translation, Adoption and Copyright team as a key support and contact. Please contact the team as early on in your process as possible, ideally before a road map is officially announced, so that we can discuss the various adoption and licensing methods and provide advice on translation where necessary.
There are copyright restrictions on all of the IFRS Foundation's materials.
To facilitate the process of adopting IFRS Standards into national legislation, the Translation, Adoption and Copyright team will work with the entity that has the legal authority to set financial reporting standards to ensure that the appropriate copyright permissions are put in place.
The below information shows the licensing options according to the single step and convergence methods of adoption, and is relevant to both IFRS Standards and the IFRS for SMEs® Standard.
There are two methods of single-step adoption.
Firstly, when legislation requires the reproduction of the IFRS requirements (or translation), for example, in the Official Gazette or the standard-setter's website. This requires an adoption agreement.
Secondly, in some jurisdictions the Standard can be adopted by referring to IFRS Standards in national law but with no reproduction of the IFRS requirements (or translation) in the legislation. No adoption contract is necessary; however, the jurisdiction should consider how its constituents will access the requirements. A contract will be necessary for any translation or distribution of IFRS requirements and/or accompanying material.
More information is available in our FAQs section, or please contact us.
Convergence that facilitates adoption over a transitional period is an acceptable method of making the transition to IFRS adoption. As the IFRS Foundation's objective is a single set of high quality accounting standards that are globally accepted, convergence should be seen as a means of making the transition to full adoption, and not an end in itself.
No claims of equivalence with IFRS Standards or reference to the local standards as IFRS Standards may be made during the convergence period. Distribution of the local standards will be restricted to the converging jurisdiction.
You will need a licence to use IFRS Foundation materials in local standards, as in order to converge the local standards with IFRS Standards some IFRS copyright material will need to be incorporated within the local standards. Permission from us for the use of IFRS Standards in local standards is therefore essential.
These are the most common questions we are asked by jurisdictions with an interest in adopting IFRS Standards.
Frequently asked questions
If you are required by law to publish the text of IFRS requirements in the Official Gazette or on the internet, you will need to sign an adoption agreement with us. This is because the Foundation owns the copyright to IFRS requirements in all languages, and therefore any distribution or reproduction of the requirements must be covered by a licence agreement.
If you do not need to reproduce the text of IFRS requirements in legislation (for example if your legislation contains a reference to IFRS Standards but no reproduction), you will not need to sign an adoption agreement with us. However, you will need to consider how to make the IFRS Standards available to users in your jurisdiction, and you may want to contact us to discuss licensing options.
Yes. This is because some IFRS Foundation copyright material is incorporated within your local standards, and therefore you will need to seek permission from the Foundation for its use and/or publication.
The Foundation's translation policy allows for only one official translation of IFRS Standards in each language. If an official translation already exists in your language, the Foundation will provide you with this translation when you sign an adoption agreement or licence to create local standards agreement with us (see above).
If an official translation does not exist, the Foundation will license the appropriate organisation in your jurisdiction to create a translation following the official translation process. In this case we will need to sign a translation agreement with that organisation.
If you need to sign an adoption agreement with us in order to reproduce the text of IFRS requirements in your legislation, or a licence to create local standards agreement in order to reproduce the text of IFRS Standards within your local standards, you will be asked to pay an annual fee. This fee is based on GDP.
If you decide to sign a commercial licence agreement with us in order to sell a print or online IFRS Foundation product, we will ask you to set a fair market price for your jurisdiction, and we will charge you a royalty fee on your gross sales price.