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. |
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):
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.”