International Financial Reporting Standards, commonly called IFRS, are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB). They constitute a standardised way of describing the company's financial performance and position so that company financial statements are understandable and comparable across international boundaries. They are particularly relevant for companies with shares or securities publicly listed.
The historical cost of an asset at the time it is acquired or created is the value of the costs incurred in acquiring or creating the asset, comprising the consideration paid to acquire or create the asset plus transaction costs. Historical cost accounting involves reporting assets and liabilities at their historical costs, which are not updated for changes in the items' values. Consequently, the amounts reported for these balance sheet items often differ from their current economic or market values.
The Financial Accounting Standards Board (FASB) is a private standard-setting body whose primary purpose is to establish and improve Generally Accepted Accounting Principles (GAAP) within the United States in the public's interest. The Securities and Exchange Commission (SEC) designated the FASB as the organization responsible for setting accounting standards for public companies in the U.S. The FASB replaced the American Institute of Certified Public Accountants' (AICPA) Accounting Principles Board (APB) on July 1, 1973. The FASB is run by the nonprofit Financial Accounting Foundation.
The Global Reporting Initiative is an international independent standards organization that helps businesses, governments, and other organizations understand and communicate their impacts on issues such as climate change, human rights, and corruption.
Materiality is a concept or convention within auditing and accounting relating to the importance/significance of an amount, transaction, or discrepancy. The objective of an audit of financial statements is to enable the auditor to express an opinion on whether the financial statements are prepared, in all material respects, in conformity with an identified financial reporting framework, such as the Generally Accepted Accounting Principles (GAAP) which is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC).
The Australian Accounting Standards Board (AASB) is an Australian Government agency that develops and maintains financial reporting standards applicable to entities in the private and public sectors of the Australian economy. Also, the AASB contributes to the development of global financial reporting standards and facilitates the participation of the Australian community in global standard setting. The AASB's functions and powers are set out in the Australian Securities and Investments Commission Act 2001. The AASB uses a conceptual framework to develop and evaluate accounting standards.
The International Accounting Standards Board (IASB) is the independent accounting standard-setting body of the IFRS Foundation.
International Accounting Standard 1: Presentation of Financial Statements or IAS 1 is an international financial reporting standard adopted by the International Accounting Standards Board (IASB). It lays out the guidelines for the presentation of financial statements and sets out minimum requirements of their content; it is applicable to all general purpose financial statements that are based on International Financial Reporting Standards (IFRS).
International Accounting Standard 37: Provisions, Contingent Liabilities and Contingent Assets, or IAS 37, is an international financial reporting standard adopted by the International Accounting Standards Board (IASB). It sets out the accounting and disclosure requirements for provisions, contingent liabilities and contingent assets, with several exceptions, establishing the important principle that a provision is to be recognized only when the entity has a liability.
The convergence of accounting standards refers to the goal of establishing a single set of accounting standards that will be used internationally. Convergence in some form has been taking place for several decades, and efforts today include projects that aim to reduce the differences between accounting standards.
The Sustainability Accounting Standards Board (SASB) is a non-profit organization, founded in 2011 by Jean Rogers to develop sustainability accounting standards. Investors, lenders, insurance underwriters, and other providers of financial capital are increasingly attuned to the impact of environmental, social, and governance (ESG) factors on the financial performance of companies, driving the need for standardized reporting of ESG data. Just as the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) have established International Financial Reporting Standards and Generally Accepted Accounting Principles (GAAP), respectively, which are currently used in the financial statements, SASB's stated mission “is to establish industry-specific disclosure standards across ESG topics that facilitate communication between companies and investors about financially material, decision-useful information. Such information should be relevant, reliable and comparable across companies on a global basis.”
The Climate Disclosure Standards Board (CDSB) is a non-profit organization working to provide material information for investors and financial markets through the integration of climate change-related information into mainstream financial reporting. CDSB operates on the premise that investors and financial institutions can make better and informed decisions if companies are open, transparent and analyse the risks and opportunities associated with climate change-related information. To this end, CDSB acts as a forum for collaboration on how existing standards and practices can be used to link financial and climate change-related information using its Framework for reporting environmental information, natural capital and associated business impacts.
IFRS 9 is an International Financial Reporting Standard (IFRS) published by the International Accounting Standards Board (IASB). It addresses the accounting for financial instruments. It contains three main topics: classification and measurement of financial instruments, impairment of financial assets and hedge accounting. The standard came into force on 1 January 2018, replacing the earlier IFRS for financial instruments, IAS 39.
IFRS 10, IFRS 11 and IFRS 12 are three International Financial Reporting Standards (IFRS) promulgated by the International Accounting Standards Board (IASB) providing accounting guidance related to consolidation and joint ventures. The standards were issued in 2011 and became effective in 2013. IFRS 10 addresses consolidated financial statements, IFRS 11 addresses joint ventures and IFRS 12 address disclosures of interests in other entities. The standards were developed in part in response to the 2007–2008 financial crisis. During the crisis, accounting rules were criticized for permitting certain risky arrangements to be excluded from company balance sheets. IFRS 10 revised the definition of having "control" of another entity, and thus requiring that entity to be consolidated onto the controlling entity's balance sheet. The revised definition is expected to increase the likelihood that an entity is deemed to have control over another. IFRS 11 largely retained previous accounting guidance for joint ventures, but adopted the IFRS 10 definition of "control," meaning that "joint control" would be deemed to exist in some circumstances where it wasn't previously, and vice versa. IFRS 12 requires the disclosures related to subsidiaries, joint ventures and interests in other entities which are not consolidated to be combined into a single disclosure. It also requires disclosures about judgements used to determine whether control exists, why it determined that control did not exist and its relationship with entities it did not consolidate. These extra disclosures were also in response of criticism of the previous accounting guidance after the 2007–2008 financial crisis.
IFRS 4 is an International Financial Reporting Standard (IFRS) issued by the International Accounting Standards Board (IASB) providing guidance for the accounting of insurance contracts. The standard was issued in March 2004, and was amended in 2005 to clarify that the standard covers most financial guarantee contracts. Paragraph 35 of IFRS also applies the standard to financial instruments with discretionary participation features.
IFRS 16 is an International Financial Reporting Standard (IFRS) promulgated by the International Accounting Standards Board (IASB) providing guidance on accounting for leases. IFRS 16 was issued in January 2016 and is effective for most companies that report under IFRS since 1 January 2019. Upon becoming effective, it replaced the earlier leasing standard, IAS 17.
IFRS 7, titled Financial Instruments: Disclosures, is an International Financial Reporting Standard (IFRS) published by the International Accounting Standards Board (IASB). It requires entities to provide certain disclosures regarding financial instruments in their financial statements. The standard was originally issued in August 2005 and became applicable on 1 January 2007, superseding the earlier standard IAS 30, Disclosures in the Financial Statements of Banks and Similar Financial Institutions, and replacing the disclosure requirements of IAS 32, previously titled Financial Instruments: Disclosure and Presentation.
The Task Force on Climate Related Financial Disclosures (TCFD) provides information to investors about what companies are doing to mitigate the risks of climate change, as well as be transparent about the way in which they are governed. It was established in December 2015 by the Group of 20 (G20) and the Financial Stability Board (FSB), and is chaired by Michael Bloomberg. It consists of governance, strategy, risk management, and metrics and targets. It will become mandatory for companies to report on these disclosures by 2025 in the UK, although some companies will have to report earlier.
The International Sustainability Standards Board (ISSB) is a standard-setting body established in 2021–2022 under the IFRS Foundation, whose mandate is the creation and development of sustainability-related financial reporting standards to meet investors' needs for sustainability reporting.
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