In line with European Commission (EC) Regulation No. 1606/2002, listed companies in Ireland are required to use International Financial Reporting Standards (IFRSs) in their consolidated accounts. The 2006 EC report on the implementation of this regulation points out that Ireland permits IFRSs in the annual accounts for listed companies and annual and consolidated accounts for all other companies, except for companies "not trading for gain." Companies which choose not to apply IFRSs are required to use accounting standards issued by the United Kingdom Accounting Standards Board (ASB) and its Urgent Issues Task Force (UITF), as promulgated by the Institute of Chartered Accountants in Ireland (ICAI). According to a number of publications on the subject, UK standards differ from IFRSs. However, in March 2004, the ASB released its "Discussion Paper: UK Accounting Standards -- A Strategy for Convergence with IFRS," in which it announced its intention to bring national accounting standards in line with IFRSs to avoid the use of two different sets of accounting rules in the United Kingdom.

General Overview

According to a 2006 self-assessment by the Institute of Chartered Accountants in Ireland (ICAI), the implementation of International Financial Reporting Standards (IFRSs) for the consolidated accounts of listed companies is mandatory in Ireland. Ireland thereby complies with European Commission (EC) Regulation No. 1606/2002, which requires all European Union (EU) listed companies to prepare consolidated accounts following IFRSs as endorsed by the EC starting January 1, 2005. The EC Regulation allows EU member states to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Ireland passed the enabling legislation, European Communities (International, Financial Reporting Standards and Miscellaneous Amendments) Regulations, in March 2005. These regulations permit all companies to use IFRSs, except for companies "not trading for gain." Companies which choose not to apply IFRSs have to follow Irish accounting requirements, based on the Companies Act of 1963-2006, the European Communities (Companies: Group Accounts) Regulations of 1992, and accounting standards issued by the United Kingdom Accounting Standards Board (ASB) and its Urgent Issues Task Force (UITF), as promulgated by the Institute of Chartered Accountants in Ireland (ICAI).

UK standards differ from IFRSs. However, in March 2004, the ASB released its "Discussion Paper: UK Accounting Standards -- A Strategy for Convergence with IFRS," announcing that it intends to bring national accounting standards in line with IFRSs in order to avoid the use of two different sets of accounting rules in the UK. In the paper, the ASB proposed a phased approach to convergence. First, it would introduce " new standards that will enhance existing UK financial reporting requirements and keep them in step with changes in the law" (p. 12). These new standards would be effective in 2005 and 2006. Second, it would introduce "a series of 'step changes' replacing one or more existing UK accounting standards with standards based on IFRS, as IASB [International Accounting Standards Board] projects are completed" (p. 12). According to McDonnell and O'Rourke (2005), the Irish GAAP relies on UK standards and, consequently, "the ASB's plan to converge to IFRS is of significant interest and importance to Irish companies."

The 2005 self-assessment prepared by the ICAI provides information on the regulatory and standard-setting framework for accounting in Ireland. According to the self-assessment, Irish financial reporting requirements are specified in the Companies Act of 1963-2006, supplemented by the Companies (Auditing and Accounting) Act of 2003, Financial Reporting - Companies (Amendment) Act of 1986, and the Listing Rules of the Irish Stock Exchange. Per the PricewaterhouseCoopers (PWC) report of 2004, the Companies Act of 2003 also specifies the rules for accounting disclosures by Irish companies.

The Irish Financial Services Reporting Authority (IFSRA) is the main regulator for all financial services firms in Ireland. It regulates the securities market, banks, non-banking financial institutions, and the insurance sector. The IFSRA monitors and enforces regulatory reporting requirements. Non-compliance can lead to fines, suspension of licenses, and criminal prosecution. However, the IFSRA does not set additional accounting standards for entities under its supervision, nor does it monitor compliance with financial reporting standards. It may review audited financial statements of regulated entities to assess compliance with IFSRA rules, however.

According to the 2005 ICAI self-assessment, the Irish Auditing and Accounting Supervisory Authority (IAASA), empowered by the Companies (Auditing and Accounting) Act of 2003, oversees the accounting profession and is responsible for the supervision of professional accounting bodies, promotion of high quality professional standards, monitoring accounts of certain types of companies for compliance with the Companies Act requirements, and advising the Minister for Enterprise, Trade, and Employment on auditing and accounting matters. According to a 2005 PWC report titled "Accounting and Company Law: Challenges Facing Corporate Ireland," under the Companies Act, accounts of listed and large companies are also subject to scrutiny and challenge by the IAASA. The ICAI, the Institute of Certified Public Accountants in Ireland (ICPAI) and the Institute of Accounting Technicians in Ireland (IATI) are listed as members on the IFAC website.

The Principles

IFRS 1: First-time Adoption of International Financial Reporting Standards (effective 2006)

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There is no equivalent standard in the UK, according to the comparison between IFRSs and Irish/UK GAAP provided on the ICAI website.

IFRS 2: Share-based Payment (effective 2005)

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Requirements for Accounting for Share-Based Payment are specified in FRS 20 (IFRS 2), effective since January 1, 2005 for listed companies and January 1, 2006 for unlisted entities (other than those applying the Financial Reporting Standard for Smaller Entities FRSSE). According to the summary of FRS 20 (IFRS 2) provided on the ASB website, "Apart from the delayed implementation for unlisted entities and the exemption for entities applying the FRSSE, FRS 20 is identical to the IASB's IFRS 2 and therefore has the effect of implementing that IFRS in the UK."

IFRS 3: Business Combinations (effective 2004)

ID

Requirements for Accounting for Business Combination are specified in FRS 10, effective December 1998; FRS 7, effective December 1994; and FRS 6, effective December 1994. As noted in the PWC report of 2004, there are significant differences between the IFRS and the UK GAAP in this area. The ASB website notes that, as part of the convergence process, in July 2005 ASB issued Financial Reporting Exposure Drafts (FREDs) 36 to 39 in response to phase 1 and 2 of the IASB project on business combinations. The package comprised FRED 36 Business Combinations (IFRS 3) and amendments to a few other FRSs. In the 2005 FRED 36, the ASB stated that "the Board considers that it would prefer to maintain its strategy of converging with International Accounting Standards in a phased approach. However, given its reservations in relation to the second-phase findings, the Board would prefer to defer implementation of the Business Combinations 'package' until a period of time has elapsed such that IASB proposals are more fully researched through practical implementation" (p. 18).

IFRS 4: Insurance Contracts (effective 2006)

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There is no equivalent standard in the UK and Ireland, according to the comparison between IFRSs and Irish/UK GAAP provided on the ICAI website. However, certain requirements of IFRS 4 are specified in FRS 27, Life Assurance effective from December 2005.

IFRS 5: Non-current Assets Held for Sale and Discontinued Operations (effective 2005)

ID

Requirements for Accounting for Non-current Assets Held for Sale and Discontinued Operations are specified in FRS 3: Reporting financial performance effective since June 1993. As indicated on the ASB website, the ASB issued FRED 32 Disposal of Non-current Assets and Presentation of Discontinued Operations in July 2003. FRED 32 comprised the text of Exposure Draft (ED) 4 Disposal of Non-current Assets and Presentation of Discontinued Operations issued by the IASB. FRED 32 would eventually replace parts of FRS 3 and introduce new requirements for non-current assets held for disposal. IFRS 5 was issued in March 2004 and became applicable for annual periods beginning on or after January 1, 2005.

IFRS 6: Exploration for and Evaluation of Mineral Resources (effective 2006)

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There is no equivalent standard in the UK and Ireland, according to the comparison between IFRSs and Irish/UK GAAP provided on the ICAI website. The 2005 Deloitte & Touche report points out that Statement of Recommended Practice (SORP) - Accounting for oil and gas exploration, development, production, and decommissioning activities sets requirements for accounting for oil and gas exploration and production activities.

IFRS 7: Financial Instruments: Disclosures (effective 2007)

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Requirements for Accounting for Financial Instruments: disclosures are specified in FRS 29 (IFRS 7): Financial Instruments: Disclosures effective since December 2005. According to the ASB press notice of December 2005, "The FRS [29] has the effect of implementing in the UK the IASB's Financial Reporting Standard, IFRS 7 Financial Instruments: Disclosures, which was published in August 2005 and the related amendment to IAS 1 Presentation of Financial Statements - Capital Disclosures." FRS 29 applies only to entities applying FRS 26. The scope of that standard covers listed entities and entities that use the fair-value accounting rules of the Companies Act of 1985 to produce their financial statements. The ASB has issued proposals for extending the scope of FRS 26 to all entities (other than those who apply the requirements of Financial Reporting Standard for Smaller Entities) but has not yet reached a conclusion on implementing this proposal.

IAS 1: Presentation of Financial Statements (effective 2007)

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Requirements for Presentation of Financial Statements are specified in FRS 3: Reporting Financial Performance effective since June 1993 and FRS 18: Accounting policies effective since June 2001, according to the comparison between IFRSs and Irish/UK GAAP provided on the ICAI website. However, according to the PWC 2004 report and the 2005 Deloitte & Touche report, there are differences between UK GAAP and IAS 1, primarily in the area of equity reconciliation, order, and format of items to be presented and detailed disclosure of operating profit.

IAS 2: Inventories (effective 2005)

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Requirements for Accounting for Inventories are specified in Statement of Standard Accounting Practice (SSAP) 9: Stocks and Long-Term Contracts, effective since July 1988. As noted in the PWC 2004 report and the 2005 Deloitte publication, there are differences between IFRSs and UK GAAP in this area. SSAP 9 gives guidance on the accounting treatment of both stocks (inventories) and long-term contracts. In 2002, the ASB issued FRED 28: Inventories & Construction and Service Contracts which, when adopted, will supersede SSAP 9. According to the FRED 28, this exposure draft was issued as a part of the ASB's convergence program and it "sets out for comment two proposed UK accounting standards, based on proposed and existing IFRSs. They address, respectively, accounting for inventories and accounting for construction contracts and other contracts for services" (p. 2). As of September 2007, this exposure draft was outstanding. The revised IAS 2 Inventories was issued in December 2003 and became applicable to annual periods beginning on or after January 1, 2005.

IAS 7: Cash Flow Statements (effective 1994)

NC

Requirements for Cash-Flow Statements are specified in FRS 1 (Revised 1996): Cash-Flow Statements, effective since March 1997. As noted in the PWC 2004 and Deloitte & Touche 2005 reports, there are some major differences between cash-flow statements prepared under IAS 7 and those prepared under FRS 1. IAS 7 (revised 1992) became applicable for periods beginning on or after January 1, 1994.

IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors (effective 2005)

NC

Requirements for IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors are specified in FRS 18: Accounting policies effective since December 2001 and FRS 3 Reporting Financial Performance issued 1992. According to the PWC report of 2004 and the Deloitte & Touche 2005 report, there are differences between IFRSs and UK GAAP in this area. IAS 8 became effective for annual financial statements covering periods beginning on or after January 1, 1995. The IASB revised IAS 8 in December 2003. The revised standard became effective for the periods commencing on January 1, 2005.

IAS 10: Events after the Reporting Period (effective 2005)

EN

Requirements of IAS 10 are specified in FRS 21 (IAS 10): Events after the Balance Sheet Date. According to the summary of FRS 21 (IAS 10) provided on the ASB website, "apart from the exemption for entities applying the FRSSE, FRS 21 is identical to the IASB's IAS 10... and therefore has the effect of implementing that IAS in the UK and Republic of Ireland." FRS 21 superseded the existing UK accounting requirements set out in SSAP 17 'Accounting for post balance sheet events'. The IASB revised IAS 10 in December 2003. The revised standard became effective for the periods commencing on January 1, 2005.

IAS 11: Construction Contracts (effective 1995)

ID

Requirements for Accounting for Construction Contracts are specified in SSAP 9: Stocks and Long-Term Contracts, effective since July 1988. According to the 2004 PWC report, minor differences exist between IAS 11 and SSAP 9. In 2002, the ASB issued FRED 28 Inventories & Construction and Service Contracts which, when adopted, will supersede SSAP 9. According to FRED 28, this exposure draft was issued as a part of the ASB's convergence program and it "sets out for comment two proposed UK accounting standards, based on proposed and existing IFRSs. They address respectively accounting for inventories and accounting for construction contracts and other contracts for services" (p. 2). As of September 2007, this exposure draft was outstanding. IAS 11 Construction Contracts became applicable for periods beginning on or after January 1, 1995.

IAS 12: Income Taxes (effective 2001)

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Requirements for Accounting for Income taxes are specified in FRS 19 'Deferred Tax' (which superseded SSAP 15) effective since January 23, 2002 and FRS 16: Current Tax effective since 2000. According to the summary of FRS 19 provided on the ASB website, FRS 19 differs from IAS 12 "reflecting differences in the conceptual approaches underlying [the standards]." IAS 12 is applicable for periods beginning on or after January 1, 1998.

IAS 14: Segment Reporting (effective 1998)

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Requirements for Accounting for Segment Reporting are specified in SSAP 25: Segmental Reporting, effective since July 1990. As noted in the 2004 PWC report, there are significant differences between IFRSs and UK GAAP in this area. IAS 14 is applicable for periods beginning on or after July 1, 1998.

IAS 16: Property, Plant and Equipment (effective 2005)

ID

Requirements for Accounting for Property, Plant, and Equipment are specified in FRS 15: Tangible fixed assets effective since March 2000. According to the 2004 PWC report there are significant differences between IFRSs and UK GAAP in this area. FRED 29 Property, Plant, and Equipment; Borrowing Costs was issued in 2002 and, as of September 2007, was still outstanding. According to the FRED 29, this exposure draft is based on the revised IAS 16 and IAS 23. The IASB revised IAS 16 in December 2003. The revised standard became effective for periods commencing on January 1, 2005.

IAS 17: Leases (effective 2005)

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Requirements for Accounting for Leases are specified in SSAP 21: Accounting for leases and hire purchase contracts effective since July 1984. According to the 2005 Deloitte and Touche report, there are considerable differences between UK GAAP and IAS 17. The IASB revised IAS 17 Leases in December 2003. The revised standard became effective for periods commencing on January 1, 2005.

IAS 18: Revenue (effective 1995)

NC

According to the 2005 Deloitte & Touche report, there is no comprehensive standard in the UK on revenue. Requirements for accounting for revenue are specified in FRS 5: Reporting the Substance of Transactions with the additional application of Note G for further guidance effective since January 1995. IAS 18: Revenue is applicable for periods beginning on or after January 1, 1995.

IAS 19: Employee Benefits (effective 2006)

NC

Requirements for Accounting for Employee Benefit are specified in FRS 17: Retirements Benefits effective since January 2001. FRS 17 replaced SSAP 24 and superseded two UITF abstracts 6 and 18. According to FRS 17, differences persist between UK GAAP and IAS 19. In December 2006, the ASB published an amendment to FRS 17 which, according to the ASB's Press release of December 7, 2007, aligned the disclosures with those of IAS 19. The effective date of the amendment is April 6, 2007.

IAS 20: Accounting for Government Grants and Disclosure of Government Assistance (effective 1984)

NC

Requirements for Accounting for Government Grants and Disclosure of Government Assistance are specified in SSAP 4 effective since July 1990. The PWC report of 2004 noted that there were differences between IFRSs and UK GAAP in this area.

IAS 21: The Effects of Changes in Foreign Exchange Rates (effective 2005)

EN

Requirements for Accounting for Effects of Changes in Foreign Exchange Rates are specified in an amended FRS 23 (IAS 21) effective since January 2005. According to the summary of FRS 23 (IAS 21) provided on the ASB website, "FRS 23 (IAS 21) has the effect, for those entities that are applying it, of implementing IAS 21... and withdrawing an existing UK standard, SSAP 20 Foreign Currency Translation."

IAS 23: Borrowing Costs (effective 1995)

ID

Requirements for Accounting for Borrowing Costs are specified in FRS 15, effective since March 2000. According to the 2004 PWC report, there are some differences between IFRSs and UK GAAP in this area. However, in 2002 the ASB issued FRED 29 Property, Plant, and Equipment; Borrowing Costs which, as of September 2007, was still outstanding. According to the FRED 29, this exposure draft is based on the revised IAS 16 and IAS 23.

IAS 24: Related Party Disclosures (effective 2005)

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The requirements for Accounting for Related Party Disclosures are specified in FRS 8, effective since December 1995. The ASB issued FRED 41 in July 2007 with a proposal for replacing FRS 8 with IAS 24. FRED 41 replaces FRED 25 which was issued earlier, prior to the changes made to IAS 24 by the IASB in 2003. The IASB revised IAS 24 in December 2003 and proposed further amendments to IAS 24, in February of 2007. The revised standard became effective for the periods commencing on January 1, 2005. (IASB website)

IAS 26: Accounting and Reporting by Retirement Benefit Plans (effective 1998)

NC

According to the 2005 ICAI comparison there is no equivalent ASB standard. A Deloitte & Touche report the same year explained that "SORP - Financial reports of pension schemes sets out form and content of the financial statements of pension schemes in the context of current UK accounting standards" (p. 37).

IAS 27: Consolidated and Separate Financial Statements (effective 2005)

NC

Requirements for Presentation of Consolidated and Separate Financial Statements are specified in FRS 2: Accounting for Subsidiary Undertakings, effective since December 1992. The PWC report of 2004 noted that there were some differences between IFRSs and UK GAAP in this area. The IASB revised IAS 27 in December 2003. The revised standard became effective for the periods commencing on January 1, 2005.

IAS 28: Investments in Associates (effective 2005)

NC

Requirements for Accounting for Investments in Associates are specified in FRS 9: Associates and Joint Ventures, effective since June 1998. The 2004 PWC report noted that there are some differences between IFRSs and UK GAAP in this area. The IASB revised IAS 28 Investment in Associates in December 2003. The revised standard became effective for the periods commencing on January 1, 2005.

IAS 29: Financial Reporting in Hyperinflationary Economies (effective 1990)

ID

Requirements for Financial Reporting in Hyperinflationary Economies are specified in FRS 24 (IAS 29) effective since January 2005. According to the summary of FRS 24 (IAS 29) provided on the ASB website, "FRS 24 has the effect, for those entities that are applying it, of implementing IAS 29... and withdrawing the existing requirements on the subject, UITF Abstract 9 'Accounting for operations in hyper-inflationary economies."

IAS 31: Interests in Joint Ventures (effective 2005)

NC

Requirements for Accounting for Interests in Joint Ventures are specified in FRS 9: Associates and Joint Ventures, effective since June 1998. As noted in PWC 2004 report, there are significant differences between IFRSs and UK GAAP in this area. The IASB revised IAS 31 in December 2003. The revised standard became effective for the periods commencing on January 1, 2005.

IAS 32: Financial Instruments: Disclosure and Presentation (effective 2005)

EN

Requirements for Accounting for Financial Instruments are specified in FRS 25 (IAS 32) issued in December 2004. According to the summary of FRS 25 (IAS 32) provided on the ASB website, "FRS 25 implements the international standard IAS 32 and (for accounting periods ending 31 December 2006) covers both presentation and disclosure requirements. For accounting periods beginning on or after January 1, 2007 the revised disclosure requirements in FRS 29 replace the requirements in FRS 25."

IAS 33: Earnings per Share (effective 2005)

EN

Requirements for Accounting for Earnings per Share are specified in FRS 22 (IAS 33) issued in December 2004 effective since January 2005. According to the text of FRS 22 (IAS 33), " This standard has an effect of implementing the International Accounting Standards Board's (IASB's) International Accounting Standard (IAS) 33 (revised 2003) Earnings per Share in the UK and the Republic of Ireland for such entities not preparing their financial statements in accordance with international accounting standards adopted pursuant to the Regulation of the European Parliament and of the Council on the Application of International Accounting Standards... This standard contains only limited differences from the revised IAS 33" (p. 3). FRS 22 (IAS 33) supersedes FRS 14. FRS 14 was issued in October 1998 and had been effective for accounting periods ending on or after December 23, 1998. According to FRS 14, this standard was largely based on the IAS 33.The IASB revised IAS 33 Earnings per Share in December 2003. The revised standard became effective for the periods commencing on January 1, 2005.

IAS 34: Interim Financial Reporting (effective 1999)

NC

Requirements for Interim Financial Reporting are specified in the ASB's statement on Interim reports issued in September 1997 and statement on preliminary announcements issued in July 1998 that deals with the content, presentation, timescale, reliability and distribution of the report. As noted in the PWC 2004 report, there are minor differences between IFRSs and UK GAAP in this area. IAS 34 is applicable for periods beginning on or after January 1, 1999.

IAS 36: Impairment of Assets (effective 2004)

NC

Requirements for Accounting on Impairment of Assets are specified in FRS 11: Impairment of Fixed Assets and Goodwill effective since December 1998. As noted in PWC 2004, there were some differences between IAS 36 and FRS 11 arising from the UK view of intangible assets as being of a similar nature to goodwill, whereas under IFRSs, intangible assets are treated as akin to tangible fixed assets. The IASB issued IAS 36 in March 2004. It is applied to goodwill and intangible assets acquired in business combinations after March 31, 2004, and to all other assets for annual periods beginning on or after March 31, 2004.

IAS 37: Provisions, Contingent Liabilities and Contingent Assets (effective 1999)

EN

Requirements for Accounting for Provisions, Contingent Liabilities and Contingent Assets are specified in FRS 12 effective since March 1999. FRS 12 superseded SSAP 18 'Accounting for contingencies'. As noted in the 2005 Deloitte report "FRS 12 and IAS 37 were developed at the same time as part of a joint project between the ASB and the IASB. Consequently there are no differences of substance between the two standards" (p. 52). IAS 37 was issued in July 1998 and became applicable for periods beginning on or after July 1, 1999.

IAS 38: Intangible Assets (effective 2004)

NC

Requirements for Accounting for Intangible Assets are specified in FRS 10: Goodwill and Intangible Assets effective since December 1998. As noted in the PWC 2004 report, there are significant differences between IFRSs and UK GAAP in this area. A wider range of intangible assets are recognized under IFRSs, particularly with respect to business combinations. The IASB issued IAS 38 in March 2004. The revised standard is applied to the accounting for intangible assets acquired in business combinations after March 21, 2004, and to all other intangible assets for annual periods beginning on or after March 31, 2004.

IAS 39: Financial Instruments: Recognition and Measurement (effective 2006)

ID

Requirements for Accounting for Financial Instruments: Recognition and Measurement are specified in FRS 26 (IAS 39) effective from January 1, 2005 for listed companies and January 1, 2006 for unlisted companies. The standard was further amended in 2006 to incorporate into FRS 26 requirements of IAS 39 for recognition and de-recognition. The summary of FRS 26 (IAS 39) states that "FRS 26 implements the measurement and hedging requirements of IAS 39 in their full. However, entities applying FRS 26 will still be subject to the provisions of the Companies Act, which restricts the use of fair value measurement for liabilities. These entities will not, as a result, be able to take full advantage of the fair value option in FRS 26." The IASB revised IAS 39 and the revised standard is effective for the periods commencing on January 1, 2005.

IAS 40: Investment Property (effective 2005)

NC

Requirements for Accounting for Investment Property are specified in SSAP 19: Accounting for Investment Properties, issued in November 1981 and effective for accounting periods starting on or after July 1, 1981. As noted in the PWC 2004 report, there are significant differences between IAS 40 and SSAP 19 in terms of the measurement bases that may be used and the recognition of gains and losses on revaluation. The IASB revised IAS 40 in December 2003. The revised standard will be effective for the periods commencing on January 1, 2005. (IASB website)

IAS 41: Agriculture (effective 2003)

NC

According to the 2005 ICAI comparison, there is no equivalent ASB standard. IAS 41 Agriculture is applicable for periods beginning on or after 1 January 2003.