IFRS

IFRS stands for International Financial Reporting Standards. It is a set of accounting standards developed and maintained by the International Accounting Standards Board (IASB), under the oversight of the IFRS Foundation. The goal of IFRS is to provide a single, high-quality global framework for preparing and presenting financial statements to enhance comparability, transparency, and efficiency in capital markets.

The IFRS concept emerged from the International Accounting Standards Committee (IASC) era in 1973 and evolved into the IASB in 2001, which now issues IFRS and related interpretations (IFRIC and SIC). IFRS Standards are principle-based and require entities to provide faithful representations that are relevant, comparable, and understandable. The framework emphasizes accrual accounting, going concern, materiality, comparability, and consistency across periods.

Scope and adoption: IFRS is required or permitted for many public companies and entities in more than 140 jurisdictions. The European Union requires IFRS for consolidated financial statements of listed companies since 2005. In the United States, companies generally report under US GAAP, with ongoing but limited convergence initiatives. IFRS is also available in a simplified form for small and medium-sized entities (IFRS for SMEs).

Governance and process: The IFRS Foundation provides funding and oversight, while the IASB develops standards through a due process involving exposure drafts, public consultation, and debate. Interpretations issued by the IFRS Interpretations Committee explain ambiguous applications of standards.

Selected core standards: IFRS 9 Financial Instruments, IFRS 15 Revenue from Contracts with Customers, IFRS 16 Leases, IFRS 17 Insurance Contracts. Foundational standards include IFRS 1 First-time Adoption and the IASB’s Conceptual Framework.

Impact and limitations: IFRS aims for comparability and efficiency; differences remain between IFRS and other regimes, and implementation can be complex, requiring significant judgments.

---