What are IFRS standards?
IFRS standards are International Financial Reporting Standards (IFRS) that consist of a set of accounting rules that determine how transactions and other accounting events are required to be reported in financial statements. They are designed to maintain credibility and transparency in the financial world, which enables investors and business operators to make informed financial decisions.
IFRS standards are issued and maintained by the International Accounting Standards Board and were created to establish a common language, so financial statements can easily be interpreted from company to company and country to country.
IFRS are the standard in over 100 countries, including the EU and many parts of Asia and South America. The United States, however, has not yet adopted them and the SEC is still deciding whether or not they should move towards them as the official standard of accounting.
List of IFRS Standards
Below is a list of IFRS standards from http://www.ifrs.org/issued-standards/list-of-standards/
|IFRS #||IFRS Standard|
|1||First-time Adoption of International Financial Reporting Standards|
|5||Non-current Assets Held for Sale and Discontinued Operations|
|6||Exploration for and Evaluation of Mineral Resources|
|7||Financial Instruments: Disclosures|
|10||Consolidated Financial Statements|
|12||Disclosure of Interests in Other Entities|
|13||Fair Value Measurement|
|14||Regulatory Deferral Accounts|
|15||Revenue from Contracts with Customers|
IFRS vs. US GAAP
The largest difference between the US GAAP and IFRS is that IFRS is principle-based while GAAP is rule-based. Rule-based frameworks are more rigid and allow less room for interpretation, while a principle-based framework allows for differences of interpretation.
There are pros and cons to both approaches, depending on how they are used. For example, using a standard that fits within a “rule” but clearly does not represent the principle behind the standard is a downside of GAAP. While conversely, taking an overly liberal interpretation of standards is a downside of IFRS.
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