UK adopted international accounting standards are the IFRS Accounting Standards that have been formally adopted for use in the UK under SI 2019/685. The starting set was the EU adopted standards in force at the end of the Brexit transition period, and since 22 May 2021 the UK Endorsement Board has decided whether each new or amended IFRS is adopted. A new IASB standard has no legal effect for UK company accounts until that adoption has happened.

What exactly are UK adopted international accounting standards?

Section 474(1) of the Companies Act 2006 defines UK adopted international accounting standards as the international accounting standards adopted for use within the UK by virtue of Chapter 2 or 3 of Part 2 of SI 2019/685, the regulations made for the UK’s exit from the EU. Chapter 2 deals with the opening position and Chapter 3 with adoptions made after that.

Regulation 4 of SI 2019/685 sets the opening position: the standards adopted for use in the UK on IP completion day were those contained in Commission Regulation (EC) No 1126/2008 as it had effect immediately before that day. In plain terms, the UK took over the EU adopted IFRS that existed at the end of 2020 and has curated its own list since.

Wherever the Companies Act refers to IAS accounts, it means accounts prepared under this UK list. It does not mean whatever the International Accounting Standards Board (IASB) has most recently published, and it does not mean EU adopted IFRS for a UK company.

Which companies must use them, and which can choose them?

Section 403(1) of the Companies Act 2006 requires the group accounts of a parent company whose securities are admitted to trading on a UK regulated market at its balance sheet date to be prepared under UK adopted international accounting standards. For every other company the framework is a choice:

  • Individual accounts. Section 395(1) lets a company prepare Companies Act individual accounts or IAS individual accounts. A charity must use Companies Act accounts (section 395(2)).
  • Group accounts. Section 403(2) gives the same choice for group accounts of companies outside section 403(1), again excluding charities (section 403(3)).
  • Consistency within a group. Section 407 requires a parent’s directors to secure that the individual accounts of the parent and each subsidiary use the same framework unless there are good reasons not to. It does not apply where no group accounts are prepared, and section 407(5) frees the parent itself where it prepares both IAS group and IAS individual accounts.

Subsidiaries of IFRS groups often use FRS 101 rather than full IFRS. Paragraph 4A of FRS 101 is clear that such accounts are Companies Act accounts, not IAS accounts, even though they use IFRS recognition and measurement. Our guide to FRS 101 and the reduced disclosure framework explains how that works, and FRS 100 sets out how the UK GAAP options fit together.

Who decides which IFRS standards apply in the UK?

SI 2019/685 gives the adoption power to the Secretary of State. The International Accounting Standards (Delegation of Functions) (EU Exit) Regulations 2021, SI 2021/609, were made on 21 May 2021 and came into force on 22 May 2021. Regulation 2 designates the UK Endorsement Board to exercise the Secretary of State’s functions under Chapter 3 of Part 2 of SI 2019/685. Its full name is the UK Accounting Standards Endorsement Board, an unincorporated association established on 26 March 2021.

Two functions stay with the Secretary of State: the power in regulation 7(3) to amend the long term public good factors, and the annual report to Parliament under regulation 12. SI 2021/609 also requires the Board to keep proper records of its decisions and exempts it from liability in damages for issuing standards.

HMRC’s Business Income Manual at BIM31025 describes the Board as the body that influences, endorses and adopts new or amended standards issued by the IASB for use by UK companies. GOV.UK describes it as accountable to the Secretary of State and to the Board of the Financial Reporting Council.

Regulation 5 sets the purpose of adoption: harmonising the financial information of companies within section 403(1), to secure a high degree of transparency and international comparability and the efficient allocation of capital, and taking part in developing a single set of international standards.

What tests must a standard pass before it is adopted?

Regulation 7 of SI 2019/685 allows a standard to be adopted only if three conditions are met:

  1. It is not contrary to the principle that an undertaking’s accounts, or consolidated accounts, must give a true and fair view of assets, liabilities, financial position and profit or loss.
  2. Its use is likely to be conducive to the long term public good in the UK.
  3. It meets the criteria of understandability, relevance, reliability and comparability needed for economic decisions and for assessing the stewardship of management.

On the public good test, regulation 7(2) requires regard in particular to whether the standard is likely to improve the quality of financial reporting, its likely costs and benefits, and whether it is likely to have an adverse effect on the UK economy, including on economic growth. Regulation 8 requires consultation with those representative of people with an interest in the quality and availability of accounts, including users and preparers.

In exceptional circumstances regulation 6 allows a standard to be adopted in part, provided the parts left out are severable and removed only to the extent necessary, or allows an option in a standard to be extended to a wider range of undertakings.

What happens once a decision is made?

Regulation 9 requires the final decision on any standard considered to be published with reasons, whether it is adopted in whole, in part, with an extended option, or not at all. Where a standard is adopted, a statement, the wording of the standard and a description of the financial years for which it must be used are published within 3 working days, beginning with the day after adoption. A consolidated, up to date text of UK adopted standards must be kept and published on the same website.

Where adoption is likely to lead to a significant change in accounting practice, regulation 11 requires an impact review with a report published no later than 5 years after the standard takes effect.

What does adoption look like in practice?

IFRS 18 Presentation and Disclosure in Financial Statements, which replaces IAS 1, is a recent example. ICAEW reported in December 2025 that the UK Endorsement Board had formally adopted it after engaging with regulators, professional bodies, industry associations and users, and consulting on a Draft Endorsement Criteria Assessment. The standard takes effect in the UK from 1 January 2027 and applies retrospectively, so companies need comparatives for 2026 prepared on the new basis.

Illustration only. A listed group with a 31 December year end will present its 2027 accounts under IFRS 18, with a 2026 comparative income statement restated into the new operating, investing and financing categories. A private subsidiary using FRS 101 is affected too, because FRS 101 follows adopted IFRS, although the FRC has amended FRS 101 to give exemptions from some of the new disclosures.

Can a company move from IAS accounts back to UK GAAP?

Yes, within limits. Once a company has prepared IAS individual accounts, section 395(3) requires later individual accounts to stay on UK adopted standards unless there is a relevant change of circumstance, such as becoming a subsidiary of an undertaking that does not prepare IAS individual accounts, ceasing to be a subsidiary, or ceasing to have securities on a UK regulated market. Section 395(4A) also allows a voluntary switch to Companies Act accounts, provided the directors have not made such a switch in the previous five years. Section 403 contains matching rules for group accounts.

How does HMRC treat accounts prepared under these standards?

HMRC’s guidance on the meaning of international accounting standards for income tax and corporation tax is at BIM31025. It confirms that where an adopted standard is modified on adoption, accounts prepared with or without the modification still count as prepared under international standards. It also notes that international standards use fair presentation rather than the term true and fair view, citing paragraph 15 of IAS 1. The wider rules are in our guide to corporation tax.

What mistakes come up most often?

  • Assuming a new IASB standard applies automatically. It applies to UK IAS accounts only once adopted, and for the years stated in the adoption.
  • Using the wrong compliance wording. UK companies’ IAS accounts are prepared under UK adopted international accounting standards. FRS 101 accounts must not claim full IFRS compliance.
  • Ignoring group consistency. Mixing frameworks across subsidiaries needs good reasons under section 407.
  • Switching back too often. A voluntary move to Companies Act accounts is limited to once in five years.

Groups weighing up their framework may also want to compare the measurement effects of key standards such as IFRS 16 on leases and IFRS 15 on revenue.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.