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Chapter 4

Interaction with local frameworks

The IASB invites comments from national standard-setters on exposure drafts and in
the past have worked together with both the FASB® (Financial Accounting Standards
Board − US) and IASB (International Accounting Standards Board) to develop
accounting standards.

The IFRS advisory council also consults national standard-setters and coordinate the
agendas and priorities of the IASB and national standard-setters. Some countries will
adopt International Financial Reporting Standards as their local accounting
standards, or will be heavily influenced by IFRS Standards when preparing local
standards. This may particularly be the case in countries without a strong
accountancy profession.

A country choosing to adopt international standards can apply them in a number of
ways:

 Adoption of international standards as local GAAP – This is usually countries
where the accounting profession isn't well developed and they adopt the
international standards with little or no amendments. This is quick to implement
but does not take into account any specific requirements of that country.

 International standards used as a model to create local GAAP – This involves
countries taking the international standards and then amending them to reflect
the country’s needs.

 International standards used as persuasive influence in preparing local GAAP –
This is where a country already has their own standards but they may differ to
the international ones. They will use the international standards to update their
local ones to ensure that they comply with IFRS Standards in all material
aspects.

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