IFRS (International Financial Reporting Standards)

IFRS (International
Financial Reporting Standards) is
a set of accounting standards
developed by an independent,
not-for-profit organization called
the International Accounting
Standards Board (IASB). The goal
of IFRS is to provide a global
framework for how public
companies prepare and disclose
their financial statements.
IFRS provides general guidance
for the preparation of financial
statements rather than setting
rules for industry-specific
reporting. Currently, over 100
countries permit or require IFRS
for public companies, with more
countries expected to transition
to IFRS by 2015. Having an
international standard is
especially important for large
companies that have subsidiaries
in different countries. Adopting a
single set of world-wide
standards will simplify accounting
procedures by allowing a
company to use one reporting
language throughout. A single
standard will also provide
investors and auditors with a
cohesive view of finances.
Proponents of IFRS as an
international standard maintain
that the cost of implementing
IFRS could be offset by the
potential for compliance to
improve credit ratings.
IFRS is sometimes confused with
IAS (International Accounting
Standards), which are older
standards that IFRS has replaced.