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Use of IFRSs by jurisdiction - G20 domestic listed companies

Introduction

The table below summarises our understanding of the use of International Financial Reporting Standards (IFRSs) as the primary GAAP by domestic listed companies of the Group of Twenty (G20) in their consolidated financial statements for external financial reporting.

'Standards that differ from IFRSs as issued by the IASB to a certain degree' are not IFRSs as issued by the IASB. These standards have been modified, some only by adding additional disclosures or reducing the permitted alternatives, some by modifying IFRS principles. Entries in the first four columns are to be read in combination with the entries in the last three columns and the footnotes. Modifications made by a jurisdiction to IFRSs as issued by the IASB do not necessarily preclude individual entities from stating compliance with IFRSs as issued by the IASB per IAS 1 Presentation of Financial Statements (e.g. when the modification does not affect the entity's business or circumstances).

If you have additions or corrections to this table, please send us an email. If possible, please include links to, or citations of, documents from which the information can be verified.

Consolidated financial statements of domestic listed companies of the G20

Note: Click here or scroll down to end of table for column totals.

Code Jurisdiction Note IFRSs or Standards that differ from IFRSs as issued by the IASB to a certain degree Degree to which Standards differ from the latest issued IFRSs Jurisdictional application guidance issued by a national group IFRSs not permitted
Required for all Required for most Required for some Permitted* Standards subject to an endorsement process Modification of a principle Reduction of permitted alternatives / Addition of supplemental disclosures
AR Argentina Note 1 X   X
AU Australia Note 2 X X X X X
BR Brazil Note 3 X X X X X
CA Canada Note 4 (X) X
(required for all from 2015)
X
CN China Note 5 X X X X
EU European Union Note 6 X X X
FR France Note 7 X X X X
DE Germany Note 7 X X X X
IN India Note 8 (Effective application date to be announced) (X) (X) (X) (X) X
(Effective application date to be announced)

 

ID Indonesia Note 9 X
IT Italy Note 7 X X X X
JP Japan Note 10 X X
KR Korea (South) Note 11 (X) X
(required for all from 2016)
X X X X
MX Mexico Note 12 X
RU Russia Note 13 X X
SA Saudi Arabia Note 14 X X X
ZA South Africa Note 15 X X
TR Turkey Note 16 X X
UK United Kingdom Note 7 X X X
US United States Note 17 X

* 'Permitted' means that jurisdictional requirements to present national GAAP financial statements are waived if financial statements according to IFRSs or similar Standards are presented.

Important: This tabulation should be read in conjunction with the notes below.

Totals for listed companies

Information, to the best of our knowledge, for 20 jurisdictions for domestic listed companies:

  • IFRSs or Standards that differ from IFRSs to a certain degree required for all — 12 jurisdictions
  • IFRSs or Standards that differ from IFRSs to a certain degree required for most — 4 jurisdictions
  • IFRSs or Standards that differ from IFRSs to a certain degree permitted — 1 jurisdictions
  • IFRSs not permitted — 3 jurisdictions

Of the 17 jurisdictions (12 + 4 + 1) that permit or require IFRSs or Standards that differ from IFRSs to a certain degree for at least some domestic listed companies:

  • Standards subject to an endorsement process — 14 jurisdictions
  • Modification of IFRS principles — 10 jurisdictions
  • Reduction of permitted IFRS alternatives/ Addition of supplemental disclosures — 5 jurisdictions
  • Jurisdictional application guidance issued by a national group — 7 jurisdictions

Footnotes

Note 1 – Argentina

IFRSs or Standards that differ from IFRSs to a certain degree required for most:

IFRSs required for all listed companies (beginning 2012) except for banks and insurance companies.

Standards subject to an endorsement process:

Endorsement usually happens within three months after the newly published or amended standards have been translated into Spanish.

Other:

Currently, in Argentina IFRS should be applied by listed companies (all listed companies are under the supervision of the Comisión Nacional de Valores) except financial entities and insurance companies (these entities are also under the supervision of the Banco Central de la República Argentina and the Superintencia de Seguros, respectively). In addition, the Argentine Federation of Professional Councils in Economic Sciences (FACPCE) approved in December 2010 the Technical Resolution No. 29, amending prior Technical Resolution No. 26, which establishes that all entities not reached by, or exempted from the mandatory use of IFRS, will have the option of IFRS, or the IFRS for SMEs, or the accounting standards issued by the Federation or to be issued in the future that are not related to this resolution. Entities that are out of scope of the IFRS for SMEs are not allowed to use the IFRS for SMEs. The resolution is effective for financial statements for annual periods beginning on or after 1 January 2012.

Note 2 – Australia

Standards subject to an endorsement process:

The Australian Accounting Standards Board (AASB) generally issues exposure drafts and other consultative documents as they are released by the IASB and conducts its own consultative process on the IASB’s proposals concurrently with the IASB. When the IASB issues a new pronouncement, the AASB considers the adoption of the Standard in the Australian environment in light of its own consultative process and will generally issue an equivalent Australian Accounting Standard in due course (usually within a number of months). At any point in time, there may be pronouncements issued by the IASB for which an Australian equivalent has not been issued by the AASB. In practice, all such pronouncements are issued by the AASB with equivalent wording and application dates to the IASB pronouncement (changes are made for application paragraphs, to include other legal requirements and to include modifications for the public and not-for-profit sectors).

Modification of IFRS principles:

The requirements of Australian Accounting Standards contain minor modifications to IFRS. These modifications are not considered to prevent a for-profit entity that is fully compliant with Australian Accounting Standards from making a statement of compliance with IFRS. The modifications generally incorporate additional guidance on Australian specific issues or include Australian regulatory requirements. In addition, in some limited circumstances, the modifications may prevent an entity complying with Australian Accounting Standards from adopting a treatment which may be available under IFRSs. For instance, AASB 6 Exploration for and Evaluation of Mineral Resources (equivalent to IFRS 6) requires the use of an ‘area of interest’ method to account for exploration and evaluation assets whereas IFRS 6 has no such restriction.

Although from 1 July 2011 Australian Accounting Standards permit a departure from IFRS when management concludes that compliance with the requirements of IFRS would be misleading, entities governed by the Corporations Act 2001 are effectively prohibited from making a departure by legislation.

Reduction of permitted IFRS alternatives/ Addition of supplemental disclosures:

Additional disclosures are required as designated by ‚‘Aus‘ paragraphs, e.g. audit fees, franking credits, additional disclosures about key management personnel (KMP). With effect from 1 July 2011, a number of the additional ‘Aus’ disclosures applying to for-profit entities were removed and those few disclosures retained (in relation to for-profit entities, with the exception of the additional KMP disclosures which may be deleted) have been moved to a separate domestic standard.

Jurisdictional application guidance issued by a national group:

The AASB issues all standards and interpretations in Australia. The AASB has issued a number of standards dealing with specific topics not covered, or not covered in detail, in IFRS, e.g. specific guidance on general insurance and life insurance, the application of materiality, and the preparation of concise financial reports under the Corporations Act 2001 (as Australian entities can chose to send such reports to members in lieu of full general purpose financial statements).

Other:

Australian Accounting Standards include the requirement from IAS 1.16 that "an entity whose financial statements comply with IFRSs shall make an explicit and unreserved statement of such compliance in the notes". In addition to including this statement in the notes to the financial statements, for entities reporting under the Corporations Act 2001, the directors’ declaration attached to the financial statements must include reference to the statement of compliance in the notes to the financial statements. The independent audit report also includes the auditors’ opinion as to whether the financial statements comply with IFRSs.

 

Note 3 – Brazil

Standards subject to an endorsement process:

Local GAAP (as issued by the Brazilian standard-setter CPC) is substantially converged with IFRS. All pronouncements issued by the IASB need to be approved by the CPC following the terms of a Memorandum of Understanding among the CPC, the IASB and the CFC (the Brazilian Accountants Body). Approval requires translation into Portuguese which causes a certain lag, and also some pronouncements that are/were not considered relevant or are pending further analysis/developments related to ongoing projects at IASB and have not yet been issued locally. Companies are generally prohibited from adopting or early adopting IFRS as issued by IASB in the absence of a locally-issued CPC equivalent.

Modification of IFRS principles:

Brazilian entities are required to present individual and consolidated financial statements. Individual financial statements are required by statutory law and the only modifications from separate financial statements are: (i) as a transition rule certain deferred costs (including start-up costs) which had been capitalised and amortised under prior local GAAP and remain outstanding at transition, that otherwise would not qualify for asset recognition under IFRS, are permitted to continue to be recognised and amortised; after transition, only qualifying assets may be recognised and (ii) investments in subsidiaries, jointly controlled entities and associates are measured using the equity method rather than the cost or fair value method prescribed by IAS 27 Separate Financial Statements.

Reduction of permitted IFRS alternatives/ Addition of supplemental disclosures:

  • IAS 16 and IAS 38: revaluation model currently prohibited for PP&E and Intangible Assets
  • IAS 1: requires only a separate statement of comprehensive income (prohibits combined income statement presentation)
  • IAS 31: requires that investments in jointly-controlled entities be presented only under proportionate consolidation method (prohibits equity method)
  • IAS 11 and IAS 18: additional disclosures on gross revenue required by force of law
  • IFRS 7: additional disclosures required by the regulator
  • All Brazilian public companies are required to present a Statement of Added Value (DVA).
Jurisdictional application guidance issued by a national group:

The CPC (Accounting Pronouncements Committee) provides interpretive guidance (ICPC) and orientations (OCPC) related to the converged local GAAP. ICPC generally correspond to IFRIC interpretations or interpretations specific to Brazil. Those specific to Brazil include guidance related to the accounting of Proposed Dividends, presentation of Individual, Separate and Consolidated Financial Statements and the Application of the Equity Method of Accounting, and the Initial application of CPC 27, 28, 37 and 43 Regarding Fixed Assets and Investment Property. The CPC has also issued 5 OCPC which provides orientation on the application of certain standards, which have been to date generally focused on industry topics or and local convergence issues, i.e. related to the Real Estate Construction Industry, Clarifications regarding 2008 Financial Statements (first year of partial convergence) and Concession Contracts.

Other:

Relief provided for certain industries or market segments:

Regulated Financial Institutions and Insurance companies are generally required to present consolidated financial statement in accordance with IFRS as issued by IASB beginning in 2010. For certain of these institutions, regulators will permit the presentation of 2010 only (no comparative). Note this is NOT applicable to any of these entities that are publicly listed. The exclusion of comparative data will inhibit unreserved statement of IFRS.

Real Estate Construction companies have some relief from provisions of IFRIC 15 (may continue recognise revenues based on percentage of completion method). Local regulator (CVM - the Brazilian SEC) will accept such practice for local BR GAAP, which could inhibit compliance with IFRS as issued by IASB.

 

Note 4 – Canada

IFRSs or Standards that differ from IFRSs to a certain degree required for most:

For rate regulated entities and investment companies, IFRSs are permitted but not required for 2011. Investment companies benefit from a deferral until January 1, 2014. With respect to rate regulated entities, they benefit from a deferral until January 1, 2015.

The application of IFRSs in Canada is broader than in Europe and it applies to many more types of entities. Canada has adopted the notion of the publicly accountable entity (PAE) – a concept very similar to the one use in IFRS for SMEs. In that respect many Crown Corporations or State Entities have to apply IFRSs. Similarly, brokerage firms and investment companies not listed but with a broad number of investors are being required to apply IFRSs.

Standards subject to an endorsement process:

Canada has an endorsement process but it is not done through political means. The Canadian Accounting Standards Board (composed of a paid Chair and volunteers) endorses the standards. All IFRSs applicable today have been endorsed without changes and it is not expected that the Board will ever modify any IFRSs before adoption. There is a slight delay in endorsement which is in part due to translation issues; the standards are integrated into the Canadian Handbook with a few months time lag when the French version becomes available. The endorsement process is in fact more of a legal issue: Since many laws and contracts refer to Canadian GAAP, IFRSs have to be adopted as Canadian GAAP for legal reasons.

Note 5 – China

Standards subject to an endorsement process:

China (PRC) GAAP converged with IFRS, but those new or revised IFRS standards, amendments or interpretations that have been issued but are not yet effective to 2010 financial statement have not all been reflected. Those effective in 2011, 2012 and 2013 have not been reflected yet.

Modification of IFRS principles:

There are some GAAP differences between China GAAP and IFRS, e.g. the reversal of impairment loss.

Reduction of permitted IFRS alternatives/ Addition of supplemental disclosures:

Only cost model is permitted for fixed assets and intangible assets under China GAAP. In the consolidated financial statements, an investment in a joint venture shall be accounted for under equity method only, etc.

Other:

The new Chinese Accounting Standards for Business Enterprises (CAS) were published by the Ministry of Finance (MoF) in 2006 and became effective on January 1, 2007. These standards are substantially converged with IFRSs, except for certain modifications (e.g. disallow the reversal of impairment loss on long term assets) which reflect China's unique circumstances and environment.

In April 2010, the MoF released the roadmap for continuing convergence of CAS with IFRSs. China has made a commitment to convergence with IFRSs. Standard convergence is an ongoing process and the MoF is continuing to spend significant effort on the ongoing convergence between CASs and IFRSs.

The CASs are now mandatory for entities including PRC-listed companies, financial institutions (including entities engaging in securities business permitted by China Securities Regulatory Commission), certain state-owned enterprises, private companies in certain provinces. In the roadmap, the MoF has indicated its intention to have all large and medium-sized enterprises (regardless whether they are listed companies or private companies) adopt the new CAS by 2012.

In December 2007, the HKICPA recognised CAS equivalence to HKFRS, which are identical to IFRSs, including all recognition and measurement options, but have in some cases different effective dates and transition requirements. From then the CASC and HKICPA together with IASB created an ongoing mechanism to reinforce continuously such equivalence.

In December 2010, the Hong Kong Stock Exchange decided to allow mainland-incorporated companies listed in Hong Kong to have an option to present financial statements using CASs and audited by an approved mainland audit firm. A number of such companies have chosen to present financial statements using CASs for annual reporting.

The EU Commission permits Chinese issuers to use CAS when they enter the EU market without adjusting financial statement in accordance with IFRS endorsed by EU.

The US SEC does not accept CAS financial statements.

Note 6 – European Union (EU)

Standards subject to an endorsement process:

The EU has adopted virtually all IFRSs, though there is a time lag in adopting several recent IFRSs. Currently IFRSs 9, 10, 11, 12 and 13, IASs 27 (2011) and 28 (2011) as well as amendments to IFRS 7, IAS 12 and IFRS 1 are awaiting adoption.

Modification of IFRS principles:

IAS 39 was modified. The modification affects approximately 25 banks in France and the Benelux following IFRSs (as adopted in the EU).

Jurisdictional application guidance issued by a national group:

The ESMA (formerly CESR) has published 10 batches of national securities exchange regulators enforcement decisions that are interpretive in nature.

Other:

This is a general description of EU requirements. Individual member states may have added requirements or may have their own interpretive body. The following EU member states are G20 members: France, Germany, Italy, United Kingdom.

 

Note 7 – European Union member states

This country is an EU member state.

Standards subject to an endorsement process:

The EU has adopted virtually all IFRSs, though there is a time lag in adopting several recent IFRSs. Currently IFRSs 9, 10, 11, 12 and 13, IASs 27 (2011) and 28 (2011) as well as amendments to IFRS 7, IAS 12 and IFRS 1 are awaiting adoption.

Modification of IFRS principles:

IAS 39 was modified. The modification affects approximately 25 banks in France and the Benelux following IFRSs (as adopted in the EU).

Jurisdictional application guidance issued by a national group:

France: The ANC (Autorité des Normes Comptables, formerly Conseil National de la Comptabilité), French Accounting Standard Setter, has over time provided some guidance in particular regarding the application of IAS 1 (presentation of the income statement being the matter that was emphasised on) and on some discrete transactions peculiar to the French context (share based compensation schemes, taxes). The AMF (Securities Exchange Regulator) issues annually recommendations that are usually 'plain' disclosures oriented and in rare situations interpretive (e.g. put on minority interests).

Germany: The Accounting Standards Committee of Germany (ASCG), comprising the German Accounting Standards Board (GASB) and the Accounting Interpretations Committee (AIC). The AIC provides guidance by interpreting the standards/interpretations (actually concerning IAS 1, IAS 32 and IFRIC 6).

Italy: The Organismo Italiano di Contabilità (OIC) is the Italian standard setter, and provides interpretive guidance with IFRSs. This Group, which is composed of the preparers, the auditors, the accounting profession, under the supervision of the Regulators, has until now provided interpretative guidance on the following matters: Practical Guidance for IFRS Transition, Practical Guidance for IFRS Disclosure, Practical Guidance on IFRS Application issues, Practical Guidance on IFRS Reserves distribution to shareholders, Application no. 1: accounting treatment of the substitute tax on goodwill, Application no. 2: impairment and goodwill, Application no. 2/1: impairment and goodwill in the banking industry, Application no. 2/2 Impairment and goodwill in the insurance industry, Application no. 3: service concessions agreements according to IFRIC 12.

Other:

Italy: On 26 February 2011, the Legislative Decree no. 225/2010, converted into Law no. 10/2011, introduced modifications to article 4 of Decree 38/2005, stating that new IFRSs issued by the IASB and adopted by the EU after 1 January 2011 need to be endorsed by the Italian Ministry of Justice before they can be applied in the separate financial statements of Italian listed companies. The endorsement process that is conducted in cooperation with the Italian standard setter is designed to verify the compatibility of each newly published IFRS with the Italian accounting principles. This new endorsement process only applies for IFRSs used in separate financial statements, not for consolidated financial statements. At the moment it is difficult to evaluate whether this endorsement process will generate any impact on the entities' separate financial statements.

Note 8 – India

IFRSs not permitted:

In January 2015, the Indian Ministry of Corporate Affairs (MCA) released a revised roadmap that reflects that, in essence, companies with a net worth of Rs. 500 crore or more will have to mandatorily follow Indian Accounting Standards (Ind AS), which are largely converged with International Financial Reporting Standards (IFRSs), from 1 April 2016. Corporates having a net worth of less than Rs. 500 crore but are listed, or in the process of getting listed, and companies with a net worth of Rs. 250 crore or more will have to follow the new norms from 1 April 2017. The new road map exempts banking, insurance and non-banking finance companies. The roadmap still needs to be officially notified, which is expected "shortly".

Currently while IFRSs are not permitted for primary reporting requirements in India, the Securities and Exchange Board of India has provided an option to listed entities having subsidiaries to submit their consolidated financial results either in accordance with the accounting standards specified in section 211(3C) of the Companies Act, 1956, or in accordance with IFRS. This option is permitted only for consolidated financial results by listed entities and submission of stand-alone financial results to the stock exchanges shall continue to be in accordance with Indian GAAP.

Standards subject to an endorsement process:

IFRS 6, IFRS 9, IFRIC 4, IFRIC 12,IFRIC 15,IAS 41 not yet endorsed

Modification of IFRS principles:

IFRS 1 - Transition date is the beginning of the period of first fully compliant IFRS statements (not the beginning of the comparative period)

IFRS 1 - Previous GAAP carrying amount of property, plant and equipment can be brought forward as at transition date

IFRS 3 - Bargain purchase to be recognised directly in equity/ in other comprehensive income and accumulated in equity as capital reserve and not income statement

IAS 11 - IFRIC 15 has not been incorporated in Ind AS and accounting for agreements for construction of real estate are proposed to be included within the scope of IAS 11

IAS 21 - Foreign currency gain/loss on long-term monetary assets and liabilities to be recognised in equity and amortised to income statement over the period to maturity

IAS 32 - Convertibles if "fixed for fixed" in foreign currency then conversion option not accounted as a derivative but as a equity instrument

IAS 39 - In determining the fair value of the financial liabilities designated at FVTPL upon initial recognition, any change in fair value due to changes in the entity’s own credit risk are ignored

Reduction of permitted IFRS alternatives/ Addition of supplemental disclosures:

IAS 40 - Carrying investment properties at fair value

IAS 1 - Income statement to be presented by nature of expense only

IAS 19 - Actuarial gains/ loss to be recognised in other comprehensive income only

IFRS 3 - Common control transactions to be accounted under historical method only

IAS 1 - Single statement of comprehensive income

IAS 7 - Interest and dividends paid classification as financing activity only; interest and dividends received classification as investing activity only

IAS 20 - All grants to be measured at fair value and grants related to assets to be presented as deferred income

Jurisdictional application guidance issued by a national group:

Accounting Standards Board of the Institute of Chartered Accountants of India

National Advisory Committee on Accounting Standards

 

Note 9 – Indonesia

IFRSs not permitted:

Indonesia's approach to IFRS adoption is to maintain its national GAAP (Indonesian Financial Accounting Standards, IFAS) and converge it gradually with IFRSs as much as possible.  Currently there is no plan (and consequently no timetable) for a full adoption of IFRSs.

Indonesia is striving to minimise the significant differences between IFRSs and IFASs gradually.  Since 2012, the local standards applied in Indonesia are based on those IFRSs that were effective at 1 January 2009. However, some modifications were made. Indonesia will continue the convergence process by considering recent amendments, newer standards (eg IFRSs 9 to 13), and IFRS Exposure Drafts.

Currently, the DSAK is committed to maintain a one year difference with IFRS  as issued by the IASB until Indonesia decides when it will go for full adoption. Therefore, the expectation is to converge Indonesian national GAAP (PSAK) with IFRSs as they stood on1 January 2014 as of 1 January 2015, with IFRSs as they stood on1 January 2015 as of 1 January 2016 etc. unless there is a reason not to do so. For example, IFRS 9 will not be adopted piecemeal; Indonesia is waiting until all phases are completed before considering adopting the standard.

Indonesia will also consider results from the implementation of the first wave of standards resulting from the convergence process before new standards are developed. The jurisdiction will also provide for transition periods of three to four years for new standards, however, Indonesia is striving at the same time to keep the gaps between the effective dates of new IFRSs and new IFASs that are based on them as short as possible.

Domestic listed companies do not have the option to fully comply with IFRS.

Note 10 – Japan

IFRSs or Standards that differ from IFRSs to a certain degree permitted:

On 11 December 2009, the Financial Services Authority of Japan (FSA) published final Cabinet Office Ordinances that allow some Japanese public companies voluntarily to start using IFRSs designated by the Commissioner of the FSA ('Designated IFRSs') in their consolidated financial statements starting from the fiscal year ending 31 March 2010. To be eligible to voluntarily start using IFRSs in 2010, domestic Japanese companies must meet both of (1) and (2) below:

  • 1. All of the following requirements shall be met:
    • Shares issued by the company are listed on a Securities Exchange in Japan.
    • The company discloses in its Annual Securities Reports information regarding specific efforts to ensure appropriateness of its consolidated financial statements.
    • The company allocates executives or employees with ample knowledge about Designated IFRSs and has in place a structure that enables it to properly prepare consolidated financial statements in accordance with Designated IFRSs.
  • 2. The company, its parent, a related company, or the parent of the related company shall either:
    • disclose under laws and regulations of a foreign jurisdiction periodically as required thereby, documents on its business conditions prepared in accordance with IFRSs;
    • disclose under rules set by a foreign security exchange markets periodically as required thereby, documents on its business conditions prepared in accordance with IFRSs; or
    • own a foreign subsidiary whose capital is equal to or exceeds the equivalent of two billion Japanese yen.

In 2010, the scope of the permitted use of IFRS in consolidated financial statements has further been expanded to include subsidiaries of domestic Japanese companies meeting above criteria.

A company that chooses to apply Designated IFRSs will be required to disclose in the initial fiscal year of such application:

  • unaudited condensed consolidated financial statements reported in accordance with Japanese GAAP (for the current and previous fiscal years) and
  • an unaudited description of differences between main items prepared in accordance with Designated IFRSs and Japanese GAAP.

In subsequent fiscal years, the company will be required to disclose only the information set out in (2) above.

Japan in the process of considering and deciding mandatory adoption of IFRS by public companies. In June 2011, the minister for financial services mentioned that 1) mandatory adoption would not be required for the fiscal year ending March 31, 2015, and 2) if mandatory adoption is decided, a preparation period of five to seven years will be provided.

Companies that do not voluntarily choose to use Designated IFRSs can use one of three other sets of accounting standards in their consolidated financial statements (subject to certain eligibility requirements), namely:

  • Japan’s Modified International Standards (JMIS),
  • Japanese GAAP, or
  • US GAAP.

Standards subject to an endorsement process:

Japan has a local endorsement process called 'designation'. There have been no modifications of IFRSs, however, designation is made only on a periodic basis (usually semi-annually). Thus not necessarily all IFRSs issued by the IASB will have been designated at specific point in time. So far the FSA of Japan has designated all standards/interpretations issued by the IASB before 31 December 2014.

In June 2015, the ASBJ issued "Japan’s Modified International Standards (JMIS): Accounting Standards Comprising IFRSs and the ASBJ Modifications" in June 2015. JMIS are standards and interpretations issued by the International Accounting Standards Board (IASB) with certain 'deletions or modifications' where considered necessary. The current list of JMIS contains standards issued by the IASB as at 31 December 2012. During the endorsement process it was determined that several standards should be modified with respect to guidance related to the accounting of goodwill and other comprehensive income. To this end, two ASBJ Modification Accounting Standards were also published: ASBJ Modification Accounting Standard No. 1 Accounting for Goodwill contains modifications to IFRS 3 Business Combinations and IAS 28 Investments in Associates and Joint Ventures and ASBJ Modification Accounting Standard No. 2 Accounting for Other Comprehensive Income contains modifications to IFRS 7 Financial Instruments: Disclosures, IFRS 9 Financial Instruments (2010), IAS 1 Presentation of Financial Statements, and IAS 19 Employee Benefits.

Note 11 – South Korea

IFRSs or Standards that differ from IFRSs to a certain degree required for most:

All listed companies are required to adopt K-IFRS (Korean version of IFRSs) from annual periods beginning on or after 1 January 2011 except for mutual savings banks, which are required to adopt K-IFRS from the annual periods beginning on or after 1 January 2016.

Standards subject to an endorsement process:

Korea has adopted virtually all IFRSs, though there is a time lag in adopting several recent IFRSs due to translation and endorsement process.

Modification of IFRS principles:

For listed companies with total assets of less than 2 trillion Korean won, consolidated financial statements are not required to be prepared in the interim financial reporting and only separate financial statements are required to be prepared with the information of equity method for subsidiaries, associates and joint ventures in the notes until 2012.

Reduction of permitted IFRS alternatives/ Addition of supplemental disclosures:

Korean version of IFRSs (K-IFRS) requires the following information additionally:

  1. presentation of operating profit in the statement of comprehensive income or in the notes;
  2. presentation of statement of appropriations of retained earnings (or statement of disposition of accumulated deficit) in the notes.

Jurisdictional application guidance issued by a national group:

The Joint Meetings of Questions and Answers for K-IFRS, of which the members are comprised of the regulator, the accounting standard setting body, preparers and large accounting firms participate, are held by the regulator or the accounting standard setting body to avoid any confusion in practice and promote consistent application of K-IFRS.

 

Note 12 – Mexico

IFRSs or Standards that differ from IFRSs to a certain degree required for most:

On 11 November 2008, the Mexican Securities and Exchange Commission (Comision Nacional Bancaria y de Valores, or CNBV) announced that all companies listed on the Mexican Stock Exchange with the exception of banks, insurance companies and other lending institutions will be required to use IFRSs starting 2012.

 

Note 13 – Russia

IFRSs or Standards that differ from IFRSs to a certain degree required for all:

IFRS are required for the consolidated financial statements of all entities whose securities are listed on stock exchanges, for banks and other credit institutions, insurance companies (except those with activities limited to obligatory medical insurance), non-governmental pension funds, management companies of investment and pension funds, and clearing houses. Additionally, certain state-owned companies are required to prepare consolidated IFRS financial statements by separate decrees of the Russian government.

Standards subject to an endorsement process:

Russia has a formal process for endorsement of new or amended IFRSs (including interpretations). Newly-issued standards go through a technical expertise by the National Accounting Standards Board (NSFO), an independent organization designated by the Ministry of Finance. Based on the results of the expertise the Ministry issues endorsement decisions.

Note 14 – Saudi Arabia

IFRSs or Standards that differ from IFRSs to a certain degree required for all:

All banks and insurance companies listed on the Saudi Stock Exchange must use IFRSs. Listed entities are required to report using the "national standards that are closely converged with full IFRSs" as issued by the Saudi Organization for Certified Public Accountants (SOCPA), which are IFRSs with some options removed and some disclosure requirements added as well as additional standards and pronouncements endorsed by the SOCPA for matters not covered by IFRSs but that are relevant in Saudi Arabia (for example for religious reasons).

Standards subject to an endorsement process:

The SOCPA needs to approve all accounting standards applicable in Saudi Arabia.

Reduction of permitted IFRS alternatives/ Addition of supplemental disclosures:

The options to use the revaluation model for property, plant, and equipment and intangible assets in IAS 16 and IAS 38 and the option to use the fair value model for investment property in IAS 40 is currently not available for listed companies.

The SOCPA did add disclosure requirements to several standards, mainly to reflect Sharia or local law.

Note 15 – South Africa

Jurisdictional application guidance issued by a national group:

The Accounting Practices Board is a private sector body consisting of a number of accounting and industry bodies and has been empowered to issue accounting standards for use by South African companies.

The Board approves IFRS, without change, and has approved the use of IFRS for SMEs where companies fall within the scope of that standard. It issues interpretations that contain issues that are specific to the South African market generally only after discussion with the IASB confirming that it will not be addressing the issue as it is a country specific issue.

During its existence, the Accounting Practices Board has issued a preface and four Interpretations being:

  • 501 Accounting for "Secondary Tax on Companies (STC)"
  • 502 Substantively Enacted Tax Rates and Tax Laws
  • 503 Accounting for Black Economic Empowerment (BEE) Transactions
  • 504 IAS 19(AC 116) The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction in The South African Pension Fund Environment.

 

Note 16 – Turkey

Listed companies in Turkey must apply all IFRSs as issued by the IASB. However, listed banks, factoring, leasing and consumer finance companies are regulated by the Banking Regulation and Supervision Agency (BRSA). BRSA standards are based on IFRSs but differ from IFRSs in relation to consolidation, allowance for loan losses and deferred tax.

Modification of IFRS principles:

Under BRSA standards, only subsidiary and associates operating in the financial services sector are required to be consolidated, the rest is carried at cost or at fair value.

Under BRSA standards, specific and general reserves for possible loan losses are provided in accordance with a communiqué issued by BRSA. The BRSA standards have prescribed certain minimum provisioning rates for non-performing loans after taking into account collateral (specific provision) and a separate rate for groups comprising performing loans (general provision).

 

Under BRSA standards it is not permitted to recognise deferred tax on general provision.

Note 17 – United States

IFRSs not permitted:

On 14 November 2008, the US SEC published for comment a proposed Roadmap for the Potential Use of Financial Statements Prepared in Accordance with International Financial Reporting Standards by US Issuers. Currently, domestic US SEC registrants are required to use US GAAP and are not permitted to use IFRSs. Foreign Private Issuers are permitted to use IFRS as issued by IASB in their financial reports filed with the SEC.

 

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Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.