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Extent of IFRS applicationStatusAdditional Information
IFRS Accounting Standards are required for domestic public companies The ASB Nepal has issued NFRS 2024, a new set of standards that are mostly converged with the 2024 IFRS Accounting Standards as issued by the IASB. NFRS 2024 comprises 25 Nepal Accounting Standards (NAS), 16 Nepal Financial Reporting Standards (NFRS), 15 IFRICs, 5 SICs, a Preface and the Conceptual Framework for Financial Reporting. These standards have completely replaced the earlier standards issued by the ASB as NFRS 2018.

Public companies are required to apply NFRSs.

Banks and financial institutions apply NFRS 2024 standards but with modifications to the expected credit loss model of IFRS 9 Financial Instruments.

IFRS Accounting Standards are permitted but not required for domestic public companies
IFRS Accounting Standards are required or permitted for listings by foreign companies Nepal Financial Reporting Standards (NFRS) converged with IFRS Accounting Standards are required.
The IFRS for SMEs Accounting Standard is required or permitted NFRS for SMEs has been developed and approved by the ASB Nepal, making it permitted for voluntary use from 17 July 2023 and mandatory from 16 July 2024.
The IFRS for SMEs Accounting Standard is under consideration

Profile last updated: 01 June 2026

RELEVANT JURISDICTIONAL AUTHORITY

Organisation
Accounting Standards Board, Nepal (ASB Nepal)
Role of the organisation

The ASB Nepal is an independent statutory body formed with the responsibility to formulate accounting standards for preparation and presentation of financial statements in Nepal. The ASB Nepal was formed by the Government of Nepal in July 2002 by an amendment to the Nepal Chartered Accountants Act, 1997.

The objective of the ASB Nepal is to issue accounting standards for business enterprises in line with IFRS Accounting Standards issued by International Accounting Standards Board. The ASB Nepal is also responsible for issuing interpretations of Nepal Financial Reporting Standards (NFRS) but to date has not issued any.

Website
http://www.asbnepal.gov.np
Email contact
secretariat@asbnepal.gov.np

COMMITMENT TO GLOBAL FINANCIAL REPORTING STANDARDS

Has the jurisdiction made a public commitment in support of moving towards a single set of high quality global accounting standards?

Yes.

The objective of the ASB Nepal, as formed under the Nepal Chartered Accountants Act, 1997, stipulates that its function is to prepare the accounting standards in line with IAS/IFRS Standards issued by the IASB.

Has the jurisdiction made a public commitment towards IFRS Accounting Standards as that single set of high quality global accounting standards?

Yes. See above.

Further to this, the Preface to Nepal Financial Reporting Standards states that one of the objectives of the ASB Nepal 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?

Nepal is converging with IFRS Accounting Standards as Nepal Financial Reporting Standards (NFRS) and with the IFRS for SMEs Accounting Standard as the NFRS for SMEs.

Additional comments provided on the adoption status?

The ASB Nepal has issued a new set of standards that converge with the 2024 IFRS Accounting Standards as issued by the IASB. This edition (NFRS 2024) comprises 25 Nepal Accounting Standards (NAS), 16 Nepal Financial Reporting Standards (NFRS), 15 IFRICs, 5 SICs, a Preface and the Conceptual Framework for Financial Reporting. These standards have completely replaced the earlier standards issued by the ASB as NFRS 2018.

All the NFRS, NAS, IFRICs and SICs are applicable as of today (9 November 2025).

The ASB Nepal is currently developing NFRS 18 and NFRS 19, which will be converged with IFRS 18 and IFRS 19, with the aim of completing this work by July 2026.

If the jurisdiction has NOT made a public statement supporting the move towards a single set of accounting standards and/or towards IFRS Accounting Standards as that set of standards, explain the jurisdiction's general position towards the adoption of IFRS Accounting Standards in the jurisdiction.
Not applicable.

EXTENT OF IFRS APPLICATION

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 Accounting Standards in their consolidated financial statements?
Yes
If YES, are IFRS Accounting Standards REQUIRED or PERMITTED?

Those entities are required to prepare and publish the financial statements based on NFRS.

Does that apply to ALL domestic companies whose securities trade in a public market, or only SOME? If some, which ones?
All.
Are IFRS Accounting Standards also required or permitted for more than the consolidated financial statements of companies whose securities trade in a public market?
NFRS converged with IFRS Accounting Standards are required.
For instance, are IFRS Accounting Standards required or permitted in separate company financial statements of companies whose securities trade in a public market?
NFRS are required.
For instance, are IFRS Accounting Standards required or permitted for companies whose securities do not trade in a public market?
Corporate bodies/entities not defined as SMEs and entities with economic significance are required to follow NFRS. For all other entities, NFRS are permitted but not required.
If the jurisdiction currently does NOT require or permit the use of IFRS Accounting Standards for domestic companies whose securities trade in a public market, are there any plans to permit or require IFRS Accounting Standards for such companies in the future?
Not applicable.

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 Accounting Standards in their consolidated financial statements?

NFRS converged with IFRS Accounting Standards are required.

No foreign companies are currently listed on NEPSE.

If YES, are IFRS Accounting Standards REQUIRED or PERMITTED in such cases?
NFRS are required.
Does that apply to ALL foreign companies whose securities trade in a public market, or only SOME? If some, which ones?
All.

IFRS ENDORSEMENT

Which IFRS Accounting Standards are required or permitted for domestic companies?
  • Listed companies, banks and financial institutions, insurance companies, state-owned enterprises: NFRS 2024.
  • Corporate bodies or entities not defined as SMEs, and entities with economic significance: NFRS 2024.
  • Entities that fall under the definition of SMEs or micro entities (MEs): required to follow NFRS for SMEs or NAS for MEs, respectively.
  • Others: All for-profit domestic companies in Nepal are covered by the three standards mentioned above. Additionally, NAS for NPOs (Nepal Accounting Standard for Not-for-Profit Organizations) must be followed by not-for-profit organisations.
The auditor’s report and/or the basis of presentation footnote states that financial statements have been prepared in conformity with:

Nepal Financial Reporting Standards (NFRS 2024).

Otherwise, non-compliance with the applicable standards must be stated.

Does the auditor's report and/or the basis of preparation footnote allow for ‘dual reporting’ (conformity with both IFRS Accounting Standards and the jurisdiction’s GAAP)?
While ‘dual reporting’ (conformity with both NFRS and the jurisdiction’s GAAP is not prohibited), it is not common.
Are IFRS Accounting Standards incorporated into law or regulations?

No. The Companies Act of Nepal requires the preparation of the financial statements in accordance with the accounting standards enforced by the statutory body under the prevailing law. The Institute of Chartered Accountants of Nepal is the statutory body responsible for pronouncing accounting standards, it has pronounced the implementation of the NFRS and NFRS for SMEs in the country, as applicable on the basis of such standards being issued by the Accounting Standards Board, Nepal.

As per Section 15B of the Nepal Chartered Accountants Act, 2053 (1997), the ASB Nepal shall provide accounting standards, based on international accounting standards, in order to systematise and regulate accountancy and financial reports.

If yes, how does that process work?
Not applicable.
If no, how do IFRS Accounting Standards become a requirement in the jurisdiction?
The preparers of the financial statements are required to follow the applicable reporting standards while preparing the financial statements that are audited. The auditors are required to report if those statements have been prepared in conformity with NFRS or NFRS for SMEs.
Does the jurisdiction have a formal process for the 'endorsement' or 'adoption' of new or amended IFRS Accounting Standards (including Interpretations) in place?

Yes.

If yes, what is the process?

NFRS are developed, revised and updated 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. Due process for projects normally, but not necessarily, involves the following steps (which are required under the present or current terms of the ASB Nepal):

(a)

Discussion of issues associated with the Standards: should be initiated by the Technical Committee: Issues related to Standards should be identified, reviewed and discussed by the Technical Committee of ASB Nepal. Thereafter, these issues should be brought before the ASB Nepal only with the appropriate suggestions for development of the Standards.

(b)

First discussion of the ASB Nepal:

(1)

The suggestions from the Technical Committee shall be included in the agenda of the meeting of the ASB Nepal.

(2)

After the first discussion of those Standards, the members of the ASB Nepal shall be given one month to express their comments.

(c)

Second discussion of the ASB Nepal: The Technical Committee reviews and discusses the received comments and submits the Standard with the suggestions to the ASB Nepal for the second discussion.

(d)

Publishing an exposure draft: If it is decided by the ASB Nepal to make the proposed Standard public as an exposure draft after the second discussion of the ASB Nepal, such an exposure draft shall be made public through the Secretariat of ASB Nepal.

(e)

Exposure draft for public comment:

(1)

The Secretariat shall make public the exposure draft as decided by the ASB Nepal, using the available resources, with a comment period of at least two months.

(2)

If necessary, workshops and seminars related to the exposure draft may be organised with the approval of the ASB Nepal.

(f)

Approval of the exposure draft as a Standard:

(1)

The Technical Committee shall submit a proposal to recommend the exposure draft as a Standard after addressing the comments and suggestions received as mentioned in section (e).

(2)

The members of the ASB Nepal shall be given 15 days to express their comments on the present proposal of the Standard.

(3)

The ASB Nepal shall approve the exposure draft, after discussion if any comments are received within the stipulated time, as a final Standard and recommend it to the Institute of Chartered Accountants of Nepal (ICAN) in order to comply with section 11 (da) of the Nepal Chartered Accountants Act, 1997 (first amendment, 2002).

(g)

Request for the regulators to implement the Standards: The ASB Nepal shall request that the regulatory bodies concerned facilitate the implementation of the NFRS.

If no, how do new or amended IFRS Accounting Standards become a requirement in the jurisdiction?
Not applicable.
Has the jurisdiction eliminated any accounting policy options permitted by IFRS Accounting Standards and/or made any modifications to any IFRS Accounting Standards?
Yes.
If yes, what are the changes?

Banks and financial institutions (BFIs) established or licensed by government authorities are permitted to recognise a loss allowance equal to the higher of the amount calculated in accordance with NFRS 9 Financial Instruments or the loss amount determined according to the applicable regulatory requirements; and they are permitted to recognise interest revenue according to applicable regulatory requirements. These alternative treatments were allowed until the financial period ending 16 July 2026. Nepal Rastra Bank however permits BFIs to continue to recognise this loss allowance (the higher of NFRS 9 or applicable regulatory requirements) for a minimum of 5 years or until further review.

Additionally, entities applying NFRS for SMEs are permitted to use an alternative treatment for recognition and disclosure of borrowing costs. Details of these modifications are available on the ASB Nepal website.

Other comments regarding the use of IFRS Accounting Standards in the jurisdiction?
Not applicable.

TRANSLATION OF IFRS ACCOUNTING STANDARDS

Are IFRS Accounting Standards translated into the local language?
No. The ASB Nepal currently has no plans to translate the NFRS into the local language.
If they are translated, what is the translation process? In particular, does this process ensure an ongoing translation of the latest updates to IFRS Accounting Standards?
Not applicable.

APPLICATION OF THE IFRS FOR SMEs ACCOUNTING STANDARD

Has the jurisdiction adopted the IFRS for SMEs Accounting Standard for at least some SMEs?
Yes. NFRS for SMEs has been developed and approved by the ASB Nepal and its implementation has been pronounced by the Institute of Chartered Accountants of Nepal, making it permitted for voluntary use from 17 July 2023 and mandatory from 16 July 2024.
If no, is the adoption of the IFRS for SMEs Accounting Standard under consideration?
Not applicable.
Did the jurisdiction make any modifications to the IFRS for SMEs Accounting Standard?
Yes, in the definition of SMEs.
If the jurisdiction has made any modifications, what are those modifications?

The following paragraphs have been inserted in NFRS for SMEs after paragraph 1.7 of Section 1:

Defining Small and Medium-sized Entities (SMEs)

1.8

Small and Medium-sized Entities (SMEs) are the entities that:

(a)

do not have public accountability; and

(b)

publish general purpose financial statements for external users External users also include owners who are not involved in managing the business, existing and potential creditors and credit rating agencies).

For financial reporting purposes,entities can be classified as:

1.

Those having public accountability: NFRS shall be applicable;

2.

Those not having public accountability: NFRS for SMEs shall be applicable;

3.

Those not having public accountability other than SMEs (micro entities): NAS for Micro Entities shall be applicable and needs to be followed on consistent basis.

1.9

Those entities having public accountability are required to prepare financial statements under NFRS 2024.

Who has public accountability? An entity:

(a)

whose debt or equity instruments are traded in public market or that is in process of issuing such instruments (except listed micro finance entities not having economic significance);

(b)

that holds assets in a fiduciary capacity for broad group of outsiders as one of its primary businesses:

(i)

a bank, credit union, insurance company, security dealer or mutual fund, or investment bank (except micro finance and cooperatives not having economic significance);

(ii)

a pension or retirement fund; or

(c)

that is a Government Business Enterprise (GBE), GBEs are public entities established under special acts not preparing financial statements under Nepal Public Sector Accounting Standards (NPSAS).

(d)

that has economic significance:

i.

borrowings from banks or financial institutions or public funds or from entities holding assets in fiduciary capacity total NRs 500 million or more;

ii.

statement of financial position (balance sheet) total (without off-setting current liabilities with current assets) is NRs 1000 million or more;

iii.

employing more than 300 employees including workers in an average;

iv.

annual turnover (revenue) is NRs 1000 million or more;

v.

holding assets in a fiduciary capacity in excess of NRs 500 million (including a securities broker handling dematerialised accounts, micro finance or cooperative entities).

An entity which attains at least one of the limits in the paragraph above in two consecutive years shall be deemed an entity having economic significance for purposes of qualifying as an entity with public accountability. Once qualified as an entity having public accountability, the entity must fall below all of the limits in the paragraph above for two consecutive years to cease to qualify.

1.10

Those NOT having public accountability and fall under the definition of NFRS for SMEs are required to prepare financial statements under NFRS for SMEs.

1.11

Those NOT having public accountability and are not SMEs are micro entities. Micro entities are required to prepare financial statements in accordance with the NAS for Micro Entities on a consistent basis.

What are micro entities?

(a)

Micro entities are entities that meet all of the following thresholds:

(i)

annual turnover (revenue) of NRs 200 million or less;

(ii)

borrowings from banks or financial institutions or public funds or from entities holding assets in fiduciary capacity of NRs 100 million or less;

(iii)

statement of financial position (balance sheet) total (without off-setting current liabilities in current assets) of NRs 200 million or less;

(iv)

holding assets in fiduciary capacity of NRs 100 million or less (includes security brokers handling dematerialised accounts, micro finance and cooperatives entities).

An entity must meet all of these criteria in two consecutive years to qualify as a micro entity and once qualified, must exceed at least one of these limits for two consecutive years to cease to qualify.

(b)

Micro Entities are not specifically required to follow NFRS or NFRS for SMEs but can prepare financial statements in accordance with the NAS for Micro Entities on consistent basis.

Which SMEs use the IFRS for SMEs Accounting Standard in the jurisdiction, and are they required or permitted to do so?
Those entities not having public accountability and falling under the SME definition are required to prepare financial statements under NFRS for SMEs.
For those SMEs that are not required to use the IFRS for SMEs Accounting Standard, what other accounting framework do they use?
NAS for Micro Entities.
Other comments regarding use of the IFRS for SMEs Accounting Standard?
None.