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What is IFRS?

Ketan , 26 October 2013  
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IFRS stands for International Financial Reporting Standards and are a set of accounting standards developed by International Accounting Standards Board (IASB), an independent accounting standard setting body, based in London. IFRS is becoming a global standard for the preparation of public financial statements.

Before some time, IFRS were called IAS (International Accounting Standards). Indeed, the first standards carried the name starting with “IAS”, e.g. IAS 1—Presentation of Financial Statements. Exactly 41 standards started with IAS.

Need for IFRS

Different countries employ different standards (as required by their regulatory body) while preparing their financials. Like United States have their US GAAP, Canada has its Canadian GAAP, United Kingdom has its UK GAAP and India has its own Accounting Standards. So this poses a problem in consolidating financials of a company having its subsidiary in multiple countries as well as while comparing companies across geographies.

So to bring the accounting standards at par, more and more countries are now allowing IFRS. Presently approx. 120 countries permit or require IFRS for domestic listed companies, although approx. 90 countries have fully conformed with IFRS. United States still follow their US GAAP and it is planned to converge to IFRS by 2015.

Benefits of IFRS

1. As corporates are going multinational even faster than ever, so it is very important that they are able to prepare their financials with the same set of standards everywhere.

2. It is easier to compare the competitors working in different geographies.

3. It is easier for investors as well as practitioners to follow and understand one set of accounting standards.

List of IFRS

Since IFRS were earlier named as IAS, standards issued in the name of IAS still continue as IASs.

IFRSs:

IFRS 1 First-time Adoption of International Financial Reporting Standards

IFRS 2 Share-based Payment

IFRS 3 Business Combinations

IFRS 4 Insurance Contracts

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations

IFRS 6 Exploration for and evaluation of Mineral Resources

IFRS 7 Financial Instruments: Disclosures

IFRS 8 Operating Segments

IFRS 9 Financial Instruments

IFRS 10 Consolidated Financial Statements

IFRS 11 Joint Arrangements

IFRS 12 Disclosure of Interests in Other Entities

IFRS 13 Fair Value Measurement

IASs:

IAS 1 Presentation of Financial Statements

IAS 2 Inventories

IAS 7 Statement of Cash Flows

• IAS Accounting Policies, Changes in Accounting Estimates and Errors

IAS 10 Events After the Balance Sheet Date

IAS 11 Construction Contracts

IAS 12 Income Taxes

IAS 16 Property, Plant and Equipment

IAS 17 Leases

IAS 18 Revenue

IAS 19 Employee Benefits

IAS 20 Accounting for Government Grants and Disclosure of Government Assistance

IAS 21 The Effects of Changes in Foreign Exchange Rates

IAS 23 Borrowing Costs

IAS 24 Related Party Disclosures

IAS 26 Accounting and Reporting by Retirement Benefit Plans

IAS 27 Consolidated and Separate Financial Statements

• IAS 28 Investments in Associates

IAS 29 Financial Reporting in Hyperinflationary Economies

IAS 32 Financial Instruments: Presentation

IAS 33 Earnings per Share

IAS 34 Interim Financial Reporting

IAS 36 Impairment of Assets

IAS 37 Provisions, Contingent Liabilities and Contingent Assets

IAS 38 Intangible Assets

IAS 39 Financial Instruments: Recognition and Measurement

IAS 40 Investment Property

IAS 41 Agriculture


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