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.
• 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
• IAS 1 Presentation of Financial Statements
• IAS 2 Inventories
• IAS 7 Statement of Cash Flows
• IAS8 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