What is IFRS?

IFRS

On 22 December 2016, the Andorran Government issued a decree approving the accounting framework for entities and collective investment entities created under Andorran law operating in the Andorran financial system, repealing the decree of 19 January 2000 which had previously regulated banks and other operating players in the Andorran financial system.

Under the new decree, the Government of Andorra, on the recommendation of the Andorran Financial Authority (AFA), will require the entities operating in the Andorran financial system and the undertakings for collective investment under Andorran law to prepare their individual and consolidated annual accounts for the financial years beginning on or after 1 January 2017, in accordance with the international financial reporting standards adopted by the EU (IFRS-EU).

The Decree uses a specific system for the incorporation of International Financial Reporting Standards for entities operating in the Andorran financial system and for undertakings for collective investment under Andorran law, thereby allowing the regulations to be adapted to the specificities of the Principality of Andorra and its financial sector, if necessary.

A Technical Committee was created for this purpose whose mission is to maintain the accounting framework applicable to the entities operating in the Andorran financial system and the undertakings for collective investment created under Andorran law. The role of the Technical Committee is to analyse the International Financial Reporting Standards adopted by the European Union in order to determine the need and convenience of incorporating them, with the necessary nuances, into the Andorran legal system.