Financial Reporting · Regulatory framework

IFRS Foundation and IASB Structure Explained

Updated 11 October 2026 · Fact-checked

The IFRS Foundation is the not-for-profit parent body that governs and funds standard-setting. Its Trustees oversee the IASB, which issues IFRS Accounting Standards. The IFRS Advisory Council advises on priorities and views. The IFRS Interpretations Committee deals with application issues. Learn each body's role and who reports to whom.

Understand IASB, IFRS Foundation and Standard-Setting Structure

Financial reporting needs one set of rules that many countries can use. The body behind the rules is the IFRS Foundation. It is an independent, not-for-profit organisation. Its job is to see that the standard-setting system works, is funded and is accountable. It does not write the standards itself.

The IASB (International Accounting Standards Board) is the standard-setting arm. It is a group of technical experts who develop and issue IFRS Accounting Standards. It follows a set due process, which is covered in its own topic. The IASB is the body that actually decides the wording of a standard.

The Trustees of the IFRS Foundation sit above the IASB. They appoint the members of the IASB, the Interpretations Committee and the Advisory Council. They also oversee governance, strategy and funding. They do not get involved in technical decisions on a standard. This keeps the IASB independent. Trustees are in turn accountable to a monitoring body of public authorities.

Two other bodies support the IASB. The IFRS Advisory Council is a wide forum of organisations and individuals with an interest in international reporting. It gives advice to the IASB on its agenda and priorities and on the views of those affected by standards. The IFRS Interpretations Committee deals with application issues. It looks at problems where practice differs or is unclear. It can publish interpretations, or it can decide the matter is best handled by the IASB, for example through an amendment to a standard.

A simple way to remember it: Trustees govern, the IASB sets, the Advisory Council advises, and the Interpretations Committee clarifies.

Key rules to remember

Reporting line: Monitoring body → Trustees (IFRS Foundation) → IASB, Interpretations Committee, Advisory Council; Trustees appoint and oversee the other bodies. Trustees do not set standards.
Role summary: Foundation = governance and funding; IASB = sets standards; Advisory Council = advises; Interpretations Committee = guidance on application; Use this as a one-line test when a question asks which body does what.
Output of the system: IASB issues IFRS Accounting Standards; Interpretations Committee issues IFRIC Interpretations; Do not say the Foundation issues standards.

How to solve IASB, IFRS Foundation and Standard-Setting Structure questions

Use this method for any question about the structure or roles of the IFRS bodies.

1Read the question and underline the action described, such as appoints, sets, advises, interprets or funds.
2Match the action to the body: governing or funding points to the Foundation and Trustees; issuing standards points to the IASB.
3If the action is giving views on priorities or reaction to proposals, choose the Advisory Council.
4If the issue is unclear or divergent application of an existing standard, choose the Interpretations Committee.
5Check the reporting line. Trustees appoint, and the IASB stays independent on technical matters.
6For written answers, name the body, state its role in one sentence, then link it to the scenario.
7Check you have not given the Foundation or Trustees a technical standard-setting role.

Quickest way: Verb-to-body matching

When to use it: Use in Section A and Section B objective questions where you must pick the correct body or role.

Find the verb in the question.
Govern, fund, appoint: Foundation or Trustees.
Develop and issue standards: IASB.
Advise on agenda and views: Advisory Council.
Clarify application issues: Interpretations Committee.
Eliminate options that mix up the roles.

Common mistakes in IASB, IFRS Foundation and Standard-Setting Structure

Saying the IFRS Foundation issues IFRS Accounting Standards.
The names sound alike and the Foundation is the parent body.
Fix: The IASB issues the standards. The Foundation governs, funds and oversees.
Saying the Trustees decide technical content of standards.
Students assume the top body makes every decision.
Fix: Trustees appoint and oversee but stay out of technical decisions, which protects IASB independence.
Thinking the Advisory Council approves or votes on standards.
The word Council suggests authority.
Fix: It only advises. It gives input on priorities and views, and has no power to approve standards.
Treating the Interpretations Committee as a second standard-setter that rewrites standards.
Its outputs are called interpretations and sound authoritative.
Fix: It addresses application issues within existing standards. Changes to a standard itself go through the IASB.
Mixing up the IASB with the IFRS Foundation in written answers.
Both names appear in the same sentences in study notes.
Fix: Write the full name once and state the role right after it, for example: the IASB, which sets standards.

Worked examples

Example 1

Explain the roles of the IFRS Foundation and the IASB, and how they differ. (4 marks)

Show the solution

State the Foundation: an independent not-for-profit body that governs and funds the standard-setting system through its Trustees.
Add that the Trustees appoint the members of the IASB and other bodies and oversee strategy and governance.
State the IASB: the technical body that develops and issues IFRS Accounting Standards using due process.
State the difference: the Foundation oversees and funds, and the IASB makes the technical decisions independently.

Answer: The IFRS Foundation is the independent, not-for-profit parent body. Its Trustees appoint members, oversee governance and strategy and arrange funding. The IASB is the standard-setting body that develops and issues IFRS Accounting Standards. The Foundation does not set standards, and the IASB keeps technical independence.

Example 2

Entities in one industry are applying a requirement of an existing IFRS Accounting Standard in different ways. Which body would consider the issue, and what might it do? (3 marks)

Show the solution

Identify the problem: divergent application of an existing standard, not a need for a new standard.
Match it to the IFRS Interpretations Committee, which deals with application issues.
State possible outcomes: it may issue an interpretation, or refer the matter to the IASB if a change to the standard is needed.
Note that the Advisory Council only advises and does not resolve application issues.

Answer: The IFRS Interpretations Committee would consider it. It could publish an interpretation to clarify how the standard applies, or refer the matter to the IASB so that the standard is amended if the wording itself is the problem.

Exam tips

Learn the four bodies with one verb each: governs, sets, advises, clarifies.
In Section A, watch for options that give the Foundation or Trustees the job of issuing standards. They are wrong.
In written answers, give the body, its role and one link to the scenario. Short and accurate beats long and vague.
Keep this topic separate from due process. Structure asks who does what, and due process asks how a standard is developed.
Remember objective questions are all or nothing, so read every option before choosing.

Practice questions from Regulatory framework

IASB, IFRS Foundation and Standard-Setting Structure in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

IASB, IFRS Foundation and Standard-Setting Structure: frequently asked questions

What is the difference between the IFRS Foundation and the IASB?

The IFRS Foundation is the governing and funding body. The IASB is the technical board that develops and issues IFRS Accounting Standards. The Foundation's Trustees appoint the IASB members but do not decide technical content.

What does the IFRS Interpretations Committee do?

It considers application issues on existing standards where practice is unclear or varies. It can issue an interpretation or refer the issue to the IASB for a possible amendment.

What is the role of the IFRS Advisory Council?

It is a broad forum that advises the IASB on its agenda and priorities and gives the views of organisations and individuals affected by standards. It does not approve standards.

Who sets IFRS standards and who oversees them?

The IASB sets IFRS Accounting Standards. The Trustees of the IFRS Foundation oversee governance and funding, and the Trustees are accountable to a monitoring body of public authorities.