Frequently Asked Questions on IFRS

Introduction—What is IFRS?

What exactly is IFRS?

International Financial Reporting Standards (IFRSs) are a set of accounting rules that have been produced by the International Accounting Standards Board (IASB). Many countries still prepare financial statements using their own national accounting standards (for example, the United States Generally Accepted Accounting Practice (US GAAP)), but many other countries have adopted the use of IFRS as an acceptable financial reporting framework.

Take, for example, countries in the European Union: the June 2002 European Commission Regulation requires that all EU-listed companies from 2005 must prepare their consolidated financial statements using IFRS as opposed to national GAAP. As a consequence, the preparation of consolidated financial statements of listed companies under IFRS is now well-established. This is particularly the case, for example, in the UK; however, not every entity in the UK adopted IFRS and very many remained on UK GAAP. The IFRS regime is permissible for entities that still report under UK GAAP, although very few do actually report under IFRS if they are not mandated to do so.

At the time of writing, there are 40 International Financial Reporting Standards (IFRSs) and International Accounting Standards (IASs) in issuance, which are detailed as below.

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 ...