The International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board have been chosen by many countries as the accounting framework that will fulfill the aforementioned objective.
The global position is to harmonize the financial reporting of economic entities in the respective markets of the different jurisdictions. The purpose is to guarantee a high degree of transparency and comparability of financial statements and the promotion of an efficient operation of capital markets, including the reduction of costs for public or private entities, with presence or involved in transnational public issues, as well as in financing operations and normal purchases and sales of goods and services.
The Dominican Republic as well as other countries requires the implementation of IFRS’S as issued by the IASB for a global convergence of accounting standards.
The Institute of Certified Public Accountants of the Dominican Republic (ICPARD) is the professional authority in accounting as established by Law No. 633 on Certified Public Accountants dated June 16, 1944 and its regulation, Executive Decree No. 2032 dated June 1, 1984.
Article 31 of the General Law of Commercial Companies and Individual Limited Liability Companies (Law No. 479-08) establishes that the financial statements must be prepared in accordance with the accounting principles and/or standards established by the Institute of Certified Public Accountants of the Dominican Republic (ICPARD).
It is worth mentioning that the ICPARD is a professional body member of the International Federation of Accountants (IFAC), the highest authority of the accounting profession worldwide, responsible for the issuance of the International Financial Reporting Standards, through the International Accounting Standards Board (IASB), responsible for the issuance of the International Financial Reporting Standards (IFRS) and interpretations on their application.
Accounting framework in the Dominican Republic
The ICPARD empowers accounting professionals to use the International Financial Reporting Standards IFRS full IFRS and IFRS for SMEs, issued by the IASB, in the financial statements published by Dominican companies, through the following resolutions:
- Resolution 001 act 2010– 04 dated February 18, 2010, Adoption and Implementation IFRS’S .
- Resolution 002 act 2010– 04 dated February 18, 2010, Adoption and Implementation of IFRS for SMEs .
- Resolution 20-03-2014 MINUTES 222014 dated March 20, 2014 Confirmation Implementation of IFRS.
In the Dominican Republic, the full framework of Full IFRS must be applied:
- Companies that are listed on the Dominican Republic Stock Exchange and regulated by the Superintendence of Securities of the Dominican Republic.
- Companies that are in the process of issuing financial instruments in the Dominican Republic securities market.
In the Dominican Republic, the full IFRS for SMEs framework must be applied:
- Companies that are not listed on a stock exchange, as is the concept of IFRS for SMEs, but it is not applicable for regulated companies.
- They are mandatory for companies classified as medium-sized in Law 488-08 and those that exceed the medium-sized limit but are not listed in the Dominican Republic’s stock market, nor are they listed in the Superintendence of Securities of the Dominican Republic.
Companies may voluntarily adopt full IFRS or IFRS for SMEs, even if they do not comply with the mandatory requirements established by the resolution, if management believes that this accounting framework is more applicable.
These resolutions do not apply to regulated entities, which will maintain their accounting records on the basis established by their regulators, nor to companies that currently use the accounting principles of the United States of America.