Accounting and Auditing Research and Databases: Practitioner's Desk Reference

International Financial Reporting Standards (IFRS) Research

International accounting research is complex, with numerous accounting standards, rules, and recommended practices. Although all IFRSs are considered to be of equal authority, there is a hierarchy when applying them to a situation.

IFRS Hierarchy

As previously discussed, the IASB issues pronouncements labeled IFRSs and the IFRS Interpretation Committee issues interpretations of pronouncements known as IFRICs. The IASB recognizes predecessor pronouncements and interpretations known as IASs and SICs. Collectively, all pronouncements and interpretations are known as IFRS or IFRSs. A hierarchy exists among the standards issued within and related to IFRS. This hierarchy shows the researcher where to begin the search for a solution to a problem or issue under review. Although all IFRSs, IASs, IFRICs, and SICs have the same authority, IFRS application is hierarchical, and the researcher may find that an IFRS does not contain the needed information to address the question. International Accounting Standards (IAS) No. 8, “Accounting Policies, Changes in Accounting Estimates and Errors,” establishes a hierarchy for choosing IFRS accounting policies.

1. Apply specific IFRSs and consider relevant implementation guidance. If specific IFRSs do not apply, choose the relevant and reliable accounting policy from the listed sources in the following order:

a. Apply other IFRSs that involve similar or related issues.

b. Apply the IASB Framework. ...