Corporate Accounting

Lecture-1 Introduction to International Reporting Standards (IFRS)

International Financial Reporting Standards (IFRS) 

International Financial Reporting Standards (IFRS) are a set of accounting rules for the financial statements of public companies that are intended to make them consistent, transparent, and easily comparable around the world.

The IFRS is issued by the International Accounting Standards Board (IASB).

• International Financial Reporting Standards (IFRS) were created to bring consistency and integrity to accounting standards and practices, regardless of the company or the country.
• They were issued by the London-based Accounting Standards Board (IASB) and address record keeping, account reporting, and other aspects of financial reporting.
• The IFRS system replaced the International Accounting Standards (IAS) in 2001.
• IFRS fosters greater corporate transparency.
• IFRS is not used by all countries; for example, the U.S. uses generally accepted accounting principles (GAAP).

IFRS Foundation

            Multinational and global Companies across the world prepare financial statements for each country in which they did business , in accordance with each country's GAAP evolved from International Accounting Standard ( IAS ) issued by International Accounting Standards Committee ( IASC ) from 1973 to 2001. During this period 41 Accounting Standards were released . IASC lasted for 27 years till the year 2001. When it was restructured to become International Accounting Standards Board ( IASB ) . At the time of establishment of IASB they agreed to adopt the revised set of standards issued by IASC . But any standards to be published after that would follow series known as International Financial Reporting Standard (IFRS).

Meaning of IFRS

 IFRS is an acronym for International Financial Reporting Standards and covers full set of principles and rules on reporting of various items , transactions or situations in the financial statements . Often they are referred to as principles based " standards because they describe principles rather than dictate rigid accounting rules for treatment of certain items.

In simple words , IFRS are a set of international accounting standards , stating how particular types of transactions and other events should be reported in the financial statements.They are the guidelines and rules set by IASB which the company and organization can follow while preparing their financial statements.

IFRS includes:

1.International Financial Reporting Standards (IFRSs) issued by IASB

2.International Accounting Standards(IASs) issued by IASC

3.Interpretations originated from the International Financial Reporting Interpretations Committee(IFRICs)

4.Interpretations originated  Standing Interpretation Committee

IFRS Foundation

The IFRS Foundation is the legal entity under which the International Accounting Standards Board (IASB) operates. The Foundation is governed by a board of 22 trustees.