IFRS Regulatory Framework: Complete Structure Guide
Regulatory framework of IFRS
You study individual standards — IFRS 9, IFRS 15, IFRS 16 — but who actually writes them, and how do they become the rules that companies in 140+ jurisdictions must follow? This guide breaks down the whole regulatory framework of IFRS in plain language: the governing bodies, how a standard is developed, who oversees the process, and how adoption and enforcement work around the world.
The regulatory framework of IFRS is run by the IFRS Foundation, a not-for-profit body with a three-tier governance structure: a Monitoring Board of public authorities (oversight), the Trustees (governance, funding, appointments), and two independent standard-setting boards — the IASB (accounting standards) and the ISSB (sustainability standards).
Standards are developed through a rigorous six-stage due process and supported by the IFRS Interpretations Committee and Advisory Council. The IASB has no enforcement power — each jurisdiction adopts and enforces IFRS locally.
The IFRS Foundation: the parent organisation
At the top sits the IFRS Foundation — an independent, not-for-profit organisation incorporated in the US (Delaware) in 2001. Its mission is to develop high-quality, understandable, enforceable and globally accepted accounting and sustainability disclosure standards. Prefer to watch? Here's the video explainer.
The Foundation itself does not write standards. It provides governance and oversight, secures funding, promotes consistent global adoption, and safeguards the independence of the standard-setting boards. The standards are the exclusive job of the boards beneath it.
The three-tier governance structure
The framework is deliberately layered so that oversight, governance and technical work stay separate — protecting the boards' independence while keeping them publicly accountable.
Tier 1 — the Monitoring Board
The Monitoring Board is a formal link between the Trustees and public authorities. It approves and oversees Trustee appointments, holds the Trustees to their Constitution duties, and provides public accountability — but it takes no part in technical standard-setting. Its members are capital-market authorities:
- IOSCO Board and the IOSCO Growth & Emerging Markets Committee
- European Commission
- US Securities and Exchange Commission (SEC)
- Financial Services Agency of Japan (JFSA)
- Financial Conduct Authority (FCA), United Kingdom
- Comissão de Valores Mobiliários (CVM), Brazil
- Financial Services Commission (FSC), Korea
- Ministry of Finance of the People's Republic of China
Tier 2 — the IFRS Foundation Trustees
The 22 Trustees are the governing body, appointed for renewable three-year terms with a required geographical balance:
| Region | Trustees |
|---|---|
| Asia-Oceania | 6 |
| Europe | 6 |
| Americas | 6 |
| Africa | 1 |
| At large (any region, for balance) | 3 |
They set strategy, secure funding, oversee due process, and appoint members of the IASB, ISSB, Interpretations Committee and advisory bodies. Crucially, Trustees are not involved in technical decisions — that authority rests solely with the boards.
Tier 3 — the standard-setting boards
International Accounting Standards Board (IASB)
The IASB develops and issues IFRS Accounting Standards — the standards you study in DipIFR and apply in practice. Members are technical experts (auditors, preparers, users, academics, regulators) appointed for renewable terms, up to a maximum of 10 years in total. The IASB has sole responsibility for standard-setting: neither the Trustees nor the Monitoring Board can override its technical decisions. It also issues the IFRS for SMEs Standard and approves Interpretations.
The IASB has historically had up to 14 members. In June 2025 the Trustees decided to gradually reduce both the IASB and the ISSB from 14 to 10 members by the end of 2028, as members' terms end, while maintaining geographical balance. So if an exam or older text quotes "14", note the transition now under way.
See the full IFRS standards list for what the IASB has issued.
International Sustainability Standards Board (ISSB)
Established in November 2021, the ISSB develops IFRS Sustainability Disclosure Standards, reflecting the rise of ESG reporting. Its first two standards are:
- IFRS S1 — General Requirements for Disclosure of Sustainability-related Financial Information
- IFRS S2 — Climate-related Disclosures
The ISSB sits alongside the IASB under the same governance — the "two boards under one Foundation" model — and the two work on connectivity so financial and sustainability reporting tell a joined-up story.
Erkki Liikanen chairs the Trustees, Andreas Barckow chairs the IASB, Emmanuel Faber chairs the ISSB, and Michel Madelain is Managing Director of the IFRS Foundation. (Office-holders change — always check ifrs.org for the current line-up.)
Supporting bodies
| Body | Role |
|---|---|
| IFRS Interpretations Committee (14 members) | Develops interpretations for IASB approval and addresses divergence in practice; approved interpretations carry the same authority as standards |
| IFRS Advisory Council | Strategic advice to the IASB, ISSB and Trustees from preparers, users, auditors, academics, regulators and national standard-setters |
| Accounting Standards Advisory Forum (ASAF) | National and regional standard-setters advising the IASB on technical matters |
The standard-setting process (due process)
IFRS standards aren't created overnight. The IASB follows a rigorous, transparent six-stage due process:
| Stage | Activity | Transparency |
|---|---|---|
| 1. Agenda setting | Identify issues, decide whether to add to the work programme | Public agenda consultation |
| 2. Research | Analyse the issue and possible solutions | Discussion papers published |
| 3. Standard development | Develop draft requirements | Exposure drafts for public comment |
| 4. Publication | Finalise and issue the standard | Basis for Conclusions explains decisions |
| 5. Implementation | Support through guidance and education | Transition Resource Groups may form |
| 6. Post-implementation review | Assess whether the standard works as intended | Public feedback requested |
This consultation is what gives IFRS its quality, legitimacy and practicality — and why the standards look the way they do. For the bigger picture, see the objectives of IFRS.
How IFRS is adopted around the world
The IASB issues standards but has no enforcement power. Adoption happens jurisdiction by jurisdiction, in different ways:
| Method | Description | Example |
|---|---|---|
| Full adoption | IFRS required as issued by the IASB | EU (listed companies), Australia, South Africa |
| Adoption with modifications | Local carve-outs or additions | India (Ind AS), China |
| Convergence | Local standards aligned but not identical | Japan, Indonesia |
| Permitted, not required | Companies may choose IFRS | USA (foreign private issuers) |
Enforcement is local too — securities regulators review filings, stock exchanges set listing rules, auditors give opinions on compliance, and professional bodies enforce ethics and quality. For Indian professionals, the difference between IFRS and Ind AS is essential reading.
The role of the Conceptual Framework
Underneath all the standards sits the Conceptual Framework for Financial Reporting. It sets the objective of financial reporting, the qualitative characteristics of useful information, the definitions of the elements (assets, liabilities, equity, income, expenses) and the recognition and measurement concepts. The IASB uses it to keep new standards consistent — and it's where principles like substance over form live.
Recent developments in IFRS governance
- ISSB created (2021) — a major expansion of the Foundation's scope into sustainability disclosure.
- Consolidation of CDSB and the VRF (2022) — folding in the Climate Disclosure Standards Board and the Value Reporting Foundation (home of SASB) to build a comprehensive sustainability framework.
- Connectivity — the IASB and ISSB working together so financial and sustainability reporting align.
- Smaller boards (2025 → 2028) — a planned reduction of both boards from 14 to 10 members by the end of 2028.
Why the framework matters
| For… | Why it helps |
|---|---|
| Exams | DipIFR and ACCA SBR test governance, due process and the IASB's relationship with other bodies |
| Practice | Anticipate changes by watching IASB projects; understand why requirements exist; navigate IFRS vs local GAAP |
| Career | Valued in technical accounting, reporting policy, regulatory affairs and group consolidation roles |
Understand IFRS from the ground up
Knowing who sets the standards — and how — is the "big picture" that DipIFR and ACCA SBR reward. Study with CA Vicky Sarin's team at Eduyush: materials, registration and coaching, with world-class pass rates.
Explore the DipIFR course ACCA SBR coachingFrequently asked questions
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What is the difference between the IASB and the ISSB?
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Final thoughts
The regulatory framework of IFRS is a carefully balanced system — independence for the boards, accountability through the Monitoring Board, and stakeholder input via due process. Seen this way, IFRS standards aren't arbitrary rules but considered answers to real reporting problems. Whether you're sitting DipIFR, working in a multinational finance team or advising on IFRS adoption, that big-picture understanding is what separates good accountants from great ones.
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This is quite interesting. Only one question comes up in my mind about hierarchy
What is the position of the Advisory Council? Should it not be at the top?
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