The AASB's functions and powers are set out in the Australian Securities and Investments Commission Act 2001.

In most instances, these requirements are either restricted to the not-for-profit or public sectors or include additional disclosures that address domestic, regulatory or other issues.

These requirements do not prevent publicly accountable for-profit private sector entities from complying with IFRSs.

Some public sector entities are required to apply Australian Accounting Standards under either Commonwealth, state or territory legislation, through specific instructions to preparers or reporting frameworks that set out guidelines or regulations.

Since 2002, the AASB implemented the broad strategic direction from the Australian Financial Reporting Council (FRC) to adopt International Accounting Standards Board (IASB) standards for financial reporting periods beginning on or after 1 January 2005.