|Extent of IFRS application||Status||Additional Information|
|IFRS Standards are required for domestic public companies||IFRS Standards adopted as Nepal Financial Reporting Standards (NFRS) are required.|
|IFRS Standards are permitted but not required for domestic public companies|
|IFRS Standards are required or permitted for listings by foreign companies||Required.|
|The IFRS for SMEs Standard is required or permitted||No. SMEs may use either full NFRS or Nepal Accounting Standards. An NFRS for SMEs is under development.|
|The IFRS for SMEs Standard is under consideration||No.|
Role of the organisation
Has the jurisdiction made a public commitment in support of moving towards a single set of high quality global accounting standards?
The March 2003 amendment to the Institute of Chartered Accountants of Nepal Act 1997 that created the ASB requires that the ASB develop Nepal Financial Reporting Standards for business enterprises in line with the International Financial Reporting Standards (IFRS Standards).
Has the jurisdiction made a public commitment towards IFRS Standards as that single set of high quality global accounting standards?
See above. Further the Preface to Nepal Financial Reporting Standards states that one of the objectives of the ASB is “to develop, on the basis of IFRSs and IASs issued by IASB in the public interest, a single set of high quality, understandable, enforceable and globally accepted financial reporting standards based on clearly articulated principles. These standards should require high quality, transparent and comparable information in financial statements and other financial reporting to help investors, other participants in the capital markets and other users of financial information make economic decisions.”
What is the jurisdiction's status of adoption?
Additional comments provided on the adoption status?
If the jurisdiction has NOT made a public statement supporting the move towards a single set of accounting standards and/or towards IFRS Standards as that set of standards, explain the jurisdiction's general position towards the adoption of IFRS Standards in the jurisdiction.
For DOMESTIC companies whose debt or equity securities trade in a public market in the jurisdiction:
Are all or some domestic companies whose securities trade in a public market either required or permitted to use IFRS Standards in their consolidated financial statements?
If YES, are IFRS Standards REQUIRED or PERMITTED?
Does that apply to ALL domestic companies whose securities trade in a public market, or only SOME? If some, which ones?
Are IFRS Standards also required or permitted for more than the consolidated financial statements of companies whose securities trade in a public market?
For instance, are IFRS Standards required or permitted in separate company financial statements of companies whose securities trade in a public market?
For instance, are IFRS Standards required or permitted for companies whose securities do not trade in a public market?
If the jurisdiction currently does NOT require or permit the use of IFRS Standards for domestic companies whose securities trade in a public market, are there any plans to permit or require IFRS Standards for such companies in the future?
For FOREIGN companies whose debt or equity securities trade in a public market in the jurisdiction:
Are all or some foreign companies whose securities trade in a public market either REQUIRED or PERMITTED to use IFRS Standards in their consolidated financial statements?
If YES, are IFRS Standards REQUIRED or PERMITTED in such cases?
Does that apply to ALL foreign companies whose securities trade in a public market, or only SOME? If some, which ones?
Which IFRS Standards are required or permitted for domestic companies?
The auditor's report and/or the basis of presentation footnotes states that financial statements have been prepared in conformity with:
Does the auditor's report and/or the basis of preparation footnote allow for ‘dual reporting’ (conformity with both IFRS Standards and the jurisdiction’s GAAP)?
Are IFRS Standards incorporated into law or regulations?
If yes, how does that process work?
If no, how do IFRS Standards become a requirement in the jurisdiction?
Does the jurisdiction have a formal process for the 'endorsement' or 'adoption' of new or amended IFRS Standards (including Interpretations) in place?
If yes, what is the process?
NFRSs are developed through due process that involves accountants, financial analysts and other users of financial statements, the business community, stock exchanges, regulatory and legal authorities, academics and other interested individuals and organisations of the country. The ASB if required consults, in public meetings, the Advisory Council on major projects, agenda decisions and work priorities, and discusses technical matters in meetings that are open to public observation. Due process for projects normally, but not necessarily, involves the following steps (the steps that are required under the terms of the ASB):
- The Executive Director or staff are asked to identify and review all the issues associated with the topic and to consider the application of the Conceptual Framework to the issues;
- study of national accounting requirements and practice and an exchange of views about the issues with national regulators.
- consulting the ASB members and the Advisory group about the advisability of adding the topic to the ASB's agenda;
- formation of an advisory group and expert team to give advice to the ASB on the project;
- publishing for public comment a discussion document;
- publishing for public comment an exposure draft (including any dissenting opinions held by ASB members) approved by ASB ;
- normally publishing with an exposure draft a basis for conclusions and the alternative views of any ASB member who opposes publication;
- consideration of all comments received within the comment period on discussion documents and exposure drafts;
- consideration of the desirability of holding a public hearing and of the desirability of conducting field tests and. if considered desirable holding such hearings and conducting such tests;
- approval of a standard by at least seven members of ASB; and
- if desirable, publishing with a standard
- a basis for conclusions, explaining, among other things, the steps in the ASB’s due process and how the ASB dealt with public comments on the exposure draft, and
- the dissenting opinion of any ASB member.
Once NAS/NFRS are approved by ASB board,, they sent to Institute of Chartered Accountants of Nepal for pronouncement. The Institute determines the effective dates. As noted above, NFRS fully converged with IFRS Standards are being implemented over a three-year period 2014 to 2016 for listed companies and state-owned enterprises.
Further, the Preface to NFRS states: “When IASB revises amends or withdraws International Accounting Standards, IFRSs, IFRIC or SIC such revision, amendments and withdrawals shall accordingly be treated as effected with immediate revision, amendments and withdrawals in NFRS by ASB as well to the extent not in conflict with existing National laws.”