Know the intricate details of IFRS for increasing transparency in your financial records
Confused about the types and several other aspects of IFRS? If you are struggling with such concepts and find it challenging to utilize in your business strategies, then it is time to hire a professional who can guide you through the elaborate idea of such standards for the benefit of your business. An expert in this field would help your company to incorporate every aspect of this standard for the best financial decisions of the company.
IFRS is an acronym for the International Financial Reporting Standards. It refers to the accounting standards set by the International Accounting Standards Board or IASB in short, with the sole objective of providing total transparency in the financial records and information to a business. This formulation includes:
- International Financial Reporting standards
- International Accounting Standards which is being adopted by IASB
- Interpretations that originated from the International Financial Reporting Interpretations Committee
- Standing Interpretations Committee
Formed in 2001, the International Accounting Standards Board refers to an independent body that was established to construct International Financial Reporting Standards. This standard hence made provides a conceptual understanding and a framework for the accounting practices of different kinds of businesses.
Features of IFRS
The IFRS services come in all possible sizes and shapes for each sector of companies. However, they all have some fundamental aspects common between each other. The essential features of IFRS include:
- It helps to make a potential difference between the financial statements of a company established by the users of the reports.
- The financial reports are complete and are free from any kind of predisposition and error.
- You get the chance to compare the financial reports of two seasons of the same company of the same reports of two different companies belonging to the same industry. Such comparisons help to understand the economic trends and hence make decisions about the respective trades and the reputation of the company.
- Due to the verified information based on specific standards, different people can reach to same conclusions but might not provide the perfect and matched agreement at the same time.
- Information is readily available to the users at a given period.
- The companies are bound to present easy to understand information which is clear and concise for the users.
Types of IFRS
The standards used in the list of International Financial Reporting Standards are:
- IFRS 1 belongs to the First-time Adoption of International Financial Reporting Standards
- IFRS 2 belongs to Share-based Payment
- IFRS 3 belongs to Business Combinations
- IFRS 4 belongs to Insurance Contracts
- IFRS 5 belongs to Non-current Assets Held for Sale and Discontinue Operations
- IFRS 6 belongs to the Exploration and Evaluation of Mineral Resources
- IFRS 7 belongs to Financial Instruments: Disclosures
- IFRS 8 belongs to Operating Segments
- IFRS 9 belongs to Financial Instruments
- IFRS 10 belongs to Consolidated Financial Statements
- IFRS 11 belongs to Joint Arrangements
- IFRS 12 belongs to Disclosure of Interests in Other Entities
- IFRS 13 belongs to Fair Value Measurement
- IFRS 14 belongs to Regulatory Deferral Accounts
- IFRS 15 belongs to Revenue from Contracts with Customers
- IFRS 16 belongs to Leases
- IFRS 17 belongs to Insurance Contracts