IFRS – International Financial Reporting Standards Guide

Overview of the Sections for (IFRS)

The organization is simple – in 2001 the International Accounting Standards Board (IASB) began issuing standards that began with the prefix IFRS followed by a number. Prior to 2001, a group called the International Accounting Standards Committee (IASC) issued International Accounting Standards, or IAS. These older standards, which are still used yet superseded by IFRS standards, begin with the prefix IAS followed by a number. This guide will provide high level explanations of each of these standards, making complex concepts simple to understand.

IFRS 1 – First time adoption of IFRS – What is it?

IFRS 2 – Share based payment

IFRS 3 – Business Combinations

IFRS 4 – Insurance Contracts

IFRS 5 – Assets held for sale and discontinued operations

IFRS 6 – Exploration for and evaluation of mineral resources

IFRS 7 – Financial Instrument 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

International Accounting Standards (IAS)
IAS 1 – Presentation of Financial Statements

IAS 2 – Inventories

IAS 7 – Statement of Cash Flows

IAS 8 – Changes in Accounting Policies, Estimates, and error correction

IAS 10 – Events after the reporting period

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 – Government Grants and Assistance Disclosure

IAS 21 – Foreign Exchange Rates

IAS 23 – Borrowing Costs

IAS 24 – Related Party Disclosures

IAS 26 – Retirement Benefit Plans

IAS 27 – Consolidated and Separate Financial Statements

IAS 28 – Investment in Associates

IAS 29 – Financial Reporting in Hyper Inflationary Economies

IAS 31 – Interest in Joint Ventures

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

IAS 40 – Investment property

IAS 41 – Agriculture

International financial reporting standards are important because they provide a backbone for financial statements to conform to that creates the two elements of comparability and consistency.

IFRIC Interpretations
IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities

IFRIC 7 Approach under IAS 29 Financial Reporting in Hyperinflationary Economies

IFRIC 9 Reassessment of Embedded Derivatives

IFRIC 10 Interim Financial Reporting and Impairment

IFRIC 12 Service Concession Arrangements

IFRIC 13 Customer Loyalty Programs

IFRIC 14 IAS 19 – Limit on Defined Benefit Asset, Minimum Funding Requirement

IFRIC 15 Agreements for the Construction of Real Estate

IFRIC 16 Hedges of a Net Investment in a Foreign Operation

IFRIC 17 Distributions of Non-cash Assets

IFRIC 18 Transfers of Assets from Customers

Financial statements prepared under IFRS are comparable between companies that adopt these standards, therefore it is easy to understand which company is over-performing or under-performing the industry. Thus, conformity to the standard allows the users of the financial statements to understand more easily, saving hundreds of hours performing accounting calculations to make the companies comparable, which ones are doing better than the others financially. Consistency between periods is achieved through using the standards to allow better tracking of a company’s progress from, for example, year 1 to year 2, and so on. This aids investors in tracking improvements in operating effectiveness of a company, as the same accounting standards are in place. Therefore, if a company earns more net income in year 2, we know it was not due to manipulation of accounting but due to the business being ran better. IFRS has many useful applications and is long becoming a useful tool for investors and management in an ever increasingly global economy. Technical versions of the international standards can be found at the IFRS Foundation website.