2017 IFRS® Foundation Pocket Guide to IFRS® Standards: the global fnancial reporting language Paul Pacter If we really believe in open international markets and the benefts of global fnance, then it can’t make sense to have different accounting rules and practices for companies and investors operating across national borders. That is why we need global standards. Ultimately this will get done. Paul A Volcker Chairman of the US Federal Reserve (1979–1987) Chairman of the IFRS Foundation Trustees (2000–2005) ® This Pocket Guide has been published by the IFRS Foundation (the Foundation) and has not been approved by the International Accounting Standards Board (the Board). Disclaimer: The Board, the Foundation, the authors and the publishers do not accept responsibility for any loss caused by acting or refraining from acting in reliance on the material in this publication, whether such loss is caused by negligence or otherwise. ® ® IFRS Standards and Interpretations (including IAS Standards, SIC ® Interpretations and IFRIC Interpretations), Exposure Drafts and other Board and IFRS Foundation publications are copyright of the IFRS Foundation. Copyright © 2017 IFRS Foundation ISBN: 978-1-911040-49-1 All rights reserved. Reproduction and use of rights are strictly limited. No part of this publication may be translated, reprinted, reproduced or used in any form either in whole or in part or by any electronic, mechanical or other means, now known or hereafter invented, including photocopying and recording, or processed in any information storage and retrieval system, without prior permission in writing from the Foundation. 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Please address publications and copyright matters to: IFRS Publications Department 30 Cannon Street, London EC4M 6XH, United Kingdom Tel: +44 (0)20 7246 6410 Fax: +44 (0)20 7246 6411 Email: Pocket Guide to ® IFRS Standards—the global fnancial reporting language 2017 Paul Pacter IFRS Foundation 30 Cannon Street London EC4M 6XH United Kingdom IFRS Standards by numbers 93% (140/150 jurisdictions) have made a public commitment to IFRS Standards as the single set of global accounting standards. 84% (126/150 jurisdictions) already require the use of IFRS Standards by all or most domestic public companies, with most of the remaining jurisdictions permitting their use. 27,000 of the 49,000 companies listed on the 88 largest securities exchanges in the world use IFRS Standards. 90% of the companies that don’t use IFRS Standards are in China, India, Japan and the United States. $27 trillion non-EU While the European Union remains the single biggest jurisdiction using IFRS Standards, the combined GDP of jurisdictions outside the EU using IFRS Standards ($27 trillion) is now greater than that of the EU itself ($19 trillion). 57% In less than eight years since its publication, the IFRS for SMEs Standard is required or permitted in 57 per cent, or 85 of 150 profled jurisdictions while a further 11 jurisdictions are considering doing so. Of 150 jurisdictions profled, most require IFRS Standards for domestic reporting by listed companies and fnancial institutions Natonal standards (including those moving towards IFRS Standards): 11 IFRS Standards required for all/most IFRS Standards companies: 126 required only for fnancial insttutons: 1 IFRS Standards permited for all/most companies: 12 4 | Pocket Guide to IFRS® Standards: the global fnancial reporting language | 2017 Contents page Use of IFRS Standards—the ‘Big Picture’ from 150 profles 6 Foreword 7 Purpose of this guide 8 The vision 9 What are IFRS Standards? 10 Standards as of April 2017 1 Mision of the IFRS Foundation and the International Accounting Standards Board (the Board) 14 How IFRS Standards are developed 15 IFRS Foundation history 16 Structure of the IFRS Foundation and the Board 20 Proces for developing IFRS Standards 21 Members of the Board 2 Why adopt IFRS Standards? 23 Profles on the use of IFRS Standards 24 What the profles show 25 The jurisdiction summaries 29—177 Overview of IFRS Standards 178 IFRS learning resources 209 Resources on the IFRS website 210 Contact us 21 The author 212 Pocket Guide to IFRS® Standards: the global fnancial reporting language| 2017 | 5 Use of IFRS Standards—the big picture from 150 profles Number of jurisdictions profled Region in the that require that require that permit or that neither region IFRS IFRS require IFRS require nor Standards Standards Standards for at permit IFRS for all as % of total least some (but Standards for any or most jurisdictions not all or most) domestic publicly domestic in the region domestic publicly accountable publicly accountable entities accountable entities entities Europe 44 43 98% 1 0 Africa 23 19 83% 1 3 Middle East 13 13 100% 0 0 Asia-Oceania 33 24 73% 3 6 Americas 37 27 73% 8 2 Totals 150 126 84% 13 11 As % of 150 100% 84% 9% 7% 6 | Pocket Guide to IFRS® Standards: the global fnancial reporting language | 2017 Foreword This past year has seen continued progress in both the improvement of IFRS Standards and global adoption of those Standards. We issued a major new Standard on accounting for leases. IFRS 16 introduces a single lessee accounting model that requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. During 2016, also, we made targeted improvements to a number of IFRS Standards, including those on investment property, separate company fnancial statements, frst-time adoption, and disclosure of interests in other entities. Furthermore, Board completed its deliberations on a new comprehensive Standard on insurance contracts, which we expect to issue in the frst half of 2017. Our research continues to report a growing number of jurisdictions requiring the use of IFRS Standards. Of 150 jurisdictions studied 126 (84 per cent) require IFRS Standards for all or most domestic listed companies and fnancial institutions. Another 13 jurisdictions (9 per cent) permit or require the use of IFRS Standards for at least some of those entities. During the past year, we posted profles on the use of IFRS Standards in ten additional jurisdictions—The Gambia, Iran, Kazakhstan, Kuwait, Liberia, Malawi, Montenegro, Namibia, Qatar and Timor-Leste. All but Timor-Leste require IFRS Standards for domestic publicly accountable entities. Timor- Leste permits their use. We were pleased that, following a comprehensive research effort, Saudi Arabia decided to require IFRS Standards, starting in 2017 for all listed companies and in 2018 for all other publicly accountable entities. Until now, IFRS Standards were required only for fnancial institutions. Finally, in 2016 we undertook a study to determine the number of listed companies that use IFRS Standards. We found that more than 27,000 of approximately 49,000 domestic companies listed on the 88 largest securities exchanges in the world use IFRS Standards. It is fair to say that considering IFRS Standards to be the global framework for fnancial reporting is more than a vision. It is a reality today. Moreover, the quality of those Standards has been validated by a decade of use by markets in both advanced and developing economies, and by national and regional studies including those conducted recently in the European Union, Canada, Korea and Australia. I look forward to reporting even more progress in next year’s Pocket Guide. Hans Hoogervorst Chairman, International Accounting Standards Board April 2017 Pocket Guide to IFRS® Standards: the global fnancial reporting language| 2017 | 7 Purpose of this guide This guide is primarily an overview of the extent of adoption of IFRS Standards in 150 countries and other jurisdictions around the world. Together they represent around 98 per cent of the world’s gross domestic product (GDP). The guide includes summaries of the use of IFRS Standards in those 150 jurisdictions. The summaries provide a comprehensive picture of exactly where and how IFRS Standards are used globally. Detailed information underlying the summaries may be found on the IFRS Foundation’s website: www.ifrs.org. One overarching conclusion is evident from a review of the summaries and the underlying detailed information—the vision of a single set of global accounting standards frst set out by the leaders of key accounting organisations around the world over 40 years ago is today a reality. To provide a perspective on the use of IFRS Standards, this guide summarises: • what IFRS Standards are; • why countries and other jurisdictions, and companies in them, would want to adopt IFRS Standards—that is, the perceived benefts; • the history of the development of IFRS Standards; • how IFRS Standards are developed; • for 150 countries and other jurisdictions, information about: • the accounting standards required for publicly accountable entities (listed companies and fnancial institutions); • the accounting standards required for small and medium-sized entities (SMEs); and • how IFRS Standards are endorsed or otherwise authorised for use; • links to resources; and • requirements of current IFRS Standards. The purpose of these profles is to illustrate the extent of implementation of IFRS Standards around the globe only. The profles do not refect the intellectual property licensing status of IFRS Standards within any given jurisdiction. The IFRS Standards are protected by copyright and are subject to different licensing arrangements according to jurisdiction. For further information, please contact