The Financial Accounting Standards Board

The SAC confers with the IASB on major policy issues as well as any technical issues that arise. The IASB structure is very similar to that of the Financial Accounting Standards Board (FASB) of the United States with the exception of the size of each board, the IASB having fourteen members and the FASB having only seven members. Like the FASB, the IASB issues pronouncements of which there are three types. They include International Financial Reporting Standards, Framework for financial reporting, and International financial reporting interpretations. The IASB has issued nine IFRS standards so far that cover such things as business combinations and share based payments. The Framework for Financial Reporting states fundamental objectives and concepts that the board uses when working on future financial reporting standards. The Framework, however, does not contain any IFRS standards and does not override any specific international standards. The IASB relies on the International Financial Reporting Interpretations Committee (IFRIC) to issue International Financial Reporting Interpretations which cover two topics. The first being “newly identified financial reporting issues that have not been specifically dealt with in IFRS” and the second being “ issues where unsatisfactory or conflicting interpretations have developed, or seem likely to develop, in the absence of authoritative guidance.” The IFRIC has issued more than fifteen interpretations thus far and uses a principles based approach like the IASB. Basically the IFRIC is going to be handling the more short term emerging issues while the IASB will be handling the long term more widespread issues.