International accounting standards (IASC)

The International Accounting Standard Committee (IASC) came into existence on June 29 1973 when sixteen accounting bodies from nine nations (designated as founder members) signed the agreement and constitution for its formation with headquarters at London.

The objective of the committee is "to formulate and publish in the public interest standards to be observed in the presentation of audited financial statements and to promote their worldwide acceptance and observance". This would facilitate flow and communication of financial information and in turn investment. The International Accounting Standards Committee (IASC) announced in January 1975, the following standards regarding disclosure of fundamental accounting assumptions and policies. Fundamental Accounting Assumptions refer to those accounting standards whose acceptance and use are assumed in the preparation of financial statements.

International accounting standards are being used as national standards in some developing countries. These standards are also forming the basis of research for national standards.  IASC is permitting alternatives in many areas of reporting practice, but the Board of the IASC believes that the time is ripe to reduce the alternatives. As a step in this direction, the Board set up a Special Steering Committee in March 1987 to find ways of reducing or eliminating alternatives. If all the countries follow the policy as being followed in UK, and some other countries that departures from the international standards be disclosed in the financial statement, international accounting standards will be harmonised throughout the world and the real purpose of developing IAS will be achieved.

The IAASC Board has set up a Standing Interpretation Committee (SIC) to consider on a timely basis accounting issues that are likely to receive divergent or unacceptable treatment in the absence of authoritative guidance. The SIC reviews accounting issues within the context of existing International Accounting Standards and IASC framework. SIC have issued 17 interpretations on various issues such a consistency on different cost formulas for inventories, Introduction to Euro, Primary basis of accounting, alternative methods, etc.