International Financial Reporting Standards (IFRS)

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International Financial Reporting Standards (IFRS) are principles-based Standards, Interpretations and the Framework adopted by the International Accounting Standards Board (IASB). IFRS represent a set of internationally accepted accounting principles used by companies to prepare financial statements.

The goal with IFRS is to make international comparisons as easy as possible. More than 100 countries around the world currently require or permit IFRS reporting. Approximately 85 of those countries require IFRS reporting for all domestic, listed companies. All member states of the EU are required to use IFRS as adopted by the EU for listed companies since 2005. The US is also gearing towards IFRS. While some countries require all companies to adhere to IFRS, others merely allow it or try to coordinate their own country’s standards to be similar.

IFRS include the following Standards:

  • 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
  • IAS 1 Presentation of Financial Statements
  • IAS 2 Inventories
  • IAS 7 Statement of Cash Flows
  • IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
  • 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 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 31 Interests 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: Recognition and Measurement
  • IAS 40 Investment Property
  • IAS 41 Agriculture

International Accounting Standards (IAS) are the older standards that IFRS are gradually replacing (IAS were issued from 1973 to 2000).

A complete set of IFRS financial statements includes a statement of financial position, a statement of comprehensive income, a statement of changes in equity, a statement of cash flows, and accounting policies and explanatory notes. 

Current use of IFRSs in the countries of the G20*

Country Status for listed companies
Argentina Required for financial years beginning on or after 1 January 2012
Australia Required for all private sector reporting entities and as the basis for public sector reporting since 2005
Brazil Required for consolidated financial statements of banks and listed companies from 31 December 2010 and for individual company accounts progressively since January 2008
Canada Required from 1 January 2011 for most listed entities and permitted for private entities including not-for-profit organisations
China Substantially converged standards, active convergence initiatives; Hong Kong SAR adopted IFRSs for listed companies in 2005
European Union All member states of the EU are required to use IFRSs as adopted by the EU for consolidated financial statements of listed companies since 2005
France Required via EU adoption and implementation process since 2005
Germany Required via EU adoption and implementation process since 2005
India Converging with IFRSs; implementation date of new converged standards to be confirmed
Indonesia Convergence process ongoing; a decision about a target date for full compliance with IFRSs is expected to be made in 2012
Italy Required via EU adoption and implementation process since 2005
Japan Permitted from 2010 for a number of international companies; decision about mandatory adoption expected around 2012
Mexico Required from 2012
Republic of Korea Required from 2011
Russia Required for consolidated financial statements of banks since 2004, for insurance and listed companies from 2012
Saudi Arabia Not permitted for listed companies
South Africa Required for listed entities since 2005
Turkey Required for listed entities since 2005
United Kingdom Required via EU adoption and implementation process since 2005
United States Allowed for foreign issuers in the US since 2007, not publicly traded US companies are permitted to use IFRSs; target date for substantial convergence between IFRSs and US GAAP is 2011; decision about possible adoption for US publicly traded companies expected in 2011
* Data actuality - July, 2011

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