An Executive Guide to IFRS: Content, Costs and Benefits to Business

Conventions

IAS 1 also mentions the regular accounting conventions of going concern, consistency and accruals (leaving aside the cash flow statement). There is no mention of prudence, though. The standard also discusses the issue of materiality and aggregation, saying that each material class of similar items should be presented separately. There is a prohibition on offsetting assets and liabilities and income and expenses, unless a specific IFRS requires it, as is the case in IAS 20 Accounting for Government Grants and Disclosure of Government Assistance. The US does permit offsetting of derivatives, and this remains an area for convergence. It is discussed further in Chapter 8, which focuses on differences between IFRS and US GAAP.