Extent of IFRS application | Status | Additional Information |
---|---|---|
IFRS Accounting Standards are required for domestic public companies | IFRS Standards adopted as Nepal Financial Reporting Standards (NFRS) are required. | |
IFRS Accounting Standards are permitted but not required for domestic public companies | ||
IFRS Accounting Standards are required or permitted for listings by foreign companies | Required. | |
The IFRS for SMEs Accounting 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 Accounting Standard is under consideration | No. |
Profile last updated: 16 June 2016
Yes.
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).
Yes.
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.”
Yes.
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):
1. | 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; |
2. | study of national accounting requirements and practice and an exchange of views about the issues with national regulators. |
3. | consulting the ASB members and the Advisory group about the advisability of adding the topic to the ASB's agenda; |
4. | formation of an advisory group and expert team to give advice to the ASB on the project; |
5. | publishing for public comment a discussion document; |
6. | publishing for public comment an exposure draft (including any dissenting opinions held by ASB members) approved by ASB ; |
7. | normally publishing with an exposure draft a basis for conclusions and the alternative views of any ASB member who opposes publication; |
8. | consideration of all comments received within the comment period on discussion documents and exposure drafts; |
9. | 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; |
10. | approval of a standard by at least seven members of ASB; and |
11. | if desirable, publishing with a standard |
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.”