(a) What do we mean when we refer to the whole corpus of international accounting
standards as issued by the IASB? (b) How do these standards relate to the financial
statements of
limited liability companies in the EU Member States? (c) Which is the basic EU
regulation that
concerns the adoption of such standards in the EU Member states, and when did it
come into force?
The framework governing international financial reporting is a structured system of
standards and legal regulations designed to ensure transparency and comparability
across borders.1
(a) The Corpus of International Accounting Standards
When we refer to the "whole corpus" of international accounting standards issued
by the International Accounting Standards Board (IASB), we are referring to
the complete set of pronouncements known collectively as International
Financial Reporting Standards (IFRS).2
This corpus consists of four main components:
International Financial Reporting Standards (IFRS): Standards issued
by the IASB after 2001.3
International Accounting Standards (IAS): Older standards originally
issued by the predecessor body (IASC) and adopted by the IASB.4
IFRIC Interpretations: Interpretations issued by the IFRS Interpretations
Committee.5
SIC Interpretations: Older interpretations issued by the Standing
Interpretations Committee.6
It also includes the Conceptual Framework for Financial Reporting, which
provides the theoretical foundation for these standards.7
(b) Application to Limited Liability Companies in the EU
In the European Union, the application of these standards depends on whether a
company is "publicly traded" (listed) or "private":
Listed Companies: All EU-incorporated limited liability companies whose
securities are traded on a regulated market (e.g., the Paris or Frankfurt Stock
Exchanges) must use these international standards for their consolidated
financial statements.8
Non-Listed (Private) Companies: For private companies or for the
individual (standalone) accounts of listed companies, Member States have
the discretion to either permit or require the use of IFRS.9 If not using IFRS,
