Summary of IFRS (International Financial Reporting Standards)

         

                                    

                                       

**Summary of IFRS (International Financial Reporting Standards)**  

International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the **International Accounting Standards Board (IASB)** for financial reporting by public companies worldwide. These standards aim to bring transparency, accountability, and efficiency to financial markets.  

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 **Key IFRS Standards:**  

**1. Financial Statements and Presentation**  

- **IFRS 1** – First-time Adoption of IFRS  

- **IAS 1** – Presentation of Financial Statements  

- **IAS 7** – Statement of Cash Flows  

- **IAS 8** – Accounting Policies, Changes in Accounting Estimates and Errors  

**2. Revenue and Income Recognition**  

- **IFRS 15** – Revenue from Contracts with Customers  

- **IAS 18** (Replaced by IFRS 15) – Revenue  

 **3. Financial Instruments and Liabilities**  

- **IFRS 9** – Financial Instruments (replacing IAS 39)  

- **IAS 32** – Financial Instruments: Presentation  

- **IAS 37** – Provisions, Contingent Liabilities, and Contingent Assets  

 **4. Assets and Leases**  

- **IFRS 16** – Leases (replaced IAS 17)  

- **IAS 16** – Property, Plant, and Equipment  

- **IAS 38** – Intangible Assets  

- **IAS 40** – Investment Property  

**5. Consolidation and Group Reporting**  

- **IFRS 10** – Consolidated Financial Statements  

- **IFRS 11** – Joint Arrangements  

- **IFRS 12** – Disclosure of Interests in Other Entities  

- **IAS 27** – Separate Financial Statements  

 **6. Employee Benefits and Share-Based Payments**  

- **IAS 19** – Employee Benefits  

- **IFRS 2** – Share-based Payment  

 **7. Business Combinations and Investments**  

- **IFRS 3** – Business Combinations  

- **IAS 28** – Investments in Associates and Joint Ventures  

 **8. Foreign Exchange and Inflation Accounting**  

- **IAS 21** – The Effects of Changes in Foreign Exchange Rates  

- **IAS 29** – Financial Reporting in Hyperinflationary Economies  

 **9. Sustainability and ESG Reporting (New Developments)**  

- **IFRS S1 & IFRS S2** – Sustainability-Related Disclosures  

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 **Recent Updates in IFRS (2024-2025)**  

1. **IFRS for SMEs Third Edition (2025)** – Aligns SME accounting with IFRS 15 (Revenue Recognition).  

2. **IAS 21 Amendments (Effective 2025)** – Addresses cases where currency exchangeability is lacking.  

3. **IFRS Practice Statement 1 (Updated)** – Enhances management commentary for better stakeholder communication.  

4. **Sustainability Reporting (IFRS S1 & S2)** – Expands ESG disclosures to increase corporate transparency.  

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 **IFRS vs. GAAP (Key Differences)**  

| Feature | IFRS | US GAAP |  

|---------|------|--------|  

| **Standards Type** | Principles-based | Rules-based |  

| **Inventory Methods** | No LIFO | LIFO & FIFO allowed |  

| **Revenue Recognition** | Based on IFRS 15 | Detailed industry-specific guidance |  

| **Asset Valuation** | Allows revaluation | Historical cost |  

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FRS is widely used in over **140 countries**, including the **UK, EU, Canada, and Australia**, while the **US follows GAAP**. Many countries are converging towards IFRS for global consistency.