This chapter aims to provide context to the way the IASB works and an understanding of its evolution. The chapter starts chronologically, with the creation of the International Accounting Standards Committee (IASC) and analyses its evolution over what I have called the start-up phase, then consolidation of its position followed by significant change under David Cairns. It then goes on to the IASB and analyses its first decade including its relations with the US and Europe, the convergence process and the financial crisis.

If your main interest in IFRS is their technical content, this chapter will not advance that. However, in my view a knowledge of the history of an organization, particularly one with a difficult political context, is helpful in understanding its decisions. This chapter aims to show where the standard-setter came from and identify something of the political environment within which it works.

With the benefit of hindsight, one can see that the creation of the International Accounting Standards Committee (IASC) in 1973 was very prescient, and yet, like many inventions, it came about almost as an accident. The international standard-setting organization has gone through many metamorphoses since. The nearly 40 years of life of the international standard-setter can be split into four periods: the start-up phase, the development of basic standards, the enhancement phase, and finally the leader of world convergence.

the creation of the ...

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