View source for International Financial Reporting Standards

'''[[International Financial Reporting Standards]]''' ('''IFRS''') are a set of internationally recognized accounting standards developed by the [[International Accounting Standards Board]] (IASB) for the preparation and presentation of financial statements. IFRS establishes principles for the recognition, measurement, presentation, and disclosure of financial information with the objective of improving the transparency, comparability, and consistency of financial reporting across jurisdictions. The standards are used or permitted in more than 140 jurisdictions worldwide and provide a common accounting framework for publicly accountable entities, including listed companies, financial institutions, and multinational corporations. IFRS plays a central role in [[financial accounting]], [[corporate finance]], [[financial management]], auditing, and international capital markets.

== History ==
Efforts to develop internationally harmonized accounting standards began in 1973 with the establishment of the [[International Accounting Standards Committee]] (IASC), which issued the [[International Accounting Standards]] (IAS).

In 2001, the IASC was reorganized into the [[International Accounting Standards Board]] (IASB), an independent standard-setting body operating under the [[IFRS Foundation]]. The IASB adopted the existing IAS standards and subsequently began issuing new standards known as International Financial Reporting Standards (IFRS).

Since their introduction, IFRS has been progressively adopted or permitted by numerous jurisdictions, including the [[European Union]], the [[United Kingdom]], [[Australia]], [[Canada]], [[South Korea]], and many other countries. Some jurisdictions, including the [[United States]], continue to use domestic accounting standards while allowing IFRS in certain circumstances.

== Objectives ==
The principal objectives of IFRS include:

* improving comparability of financial statements;
* enhancing transparency in financial reporting;
* increasing consistency in accounting practices;
* supporting investor decision-making;
* facilitating international investment;
* promoting efficient global capital markets.

These objectives aim to improve confidence in financial reporting across national boundaries.

== Development ==
IFRS is developed through a formal due process administered by the [[International Accounting Standards Board]].

The standard-setting process generally includes:

* research and agenda consultation;
* publication of discussion papers;
* exposure drafts;
* public consultation;
* analysis of stakeholder feedback;
* issuance of final accounting standards.

This process is intended to ensure transparency, technical quality, and broad stakeholder participation.

== Structure ==
The IFRS framework consists of several components.

These include:

* International Financial Reporting Standards (IFRS);
* [[International Accounting Standards]] (IAS);
* IFRS Interpretations;
* the IASB's ''Conceptual Framework for Financial Reporting''.

Earlier IAS standards remain in force unless replaced or amended by subsequent IFRS standards.

== Financial statements ==
IFRS establishes requirements for the preparation of the principal financial statements.

These include:

* [[balance sheet]] (statement of financial position);
* [[income statement]] (statement of profit or loss and other comprehensive income);
* [[cash flow statement]];
* statement of changes in equity;
* notes to the financial statements.

The standards also prescribe recognition, measurement, presentation, and disclosure requirements for assets, liabilities, equity, income, and expenses.

== Applications ==
IFRS is widely applied in:

* corporate financial reporting;
* multinational corporations;
* publicly listed companies;
* banking;
* insurance;
* auditing;
* financial analysis;
* cross-border investment.

Its use facilitates the comparison of financial statements prepared in different countries.

== Relationship with GAAP ==
IFRS and [[Generally Accepted Accounting Principles]] (GAAP) are the two principal accounting frameworks used globally.
{| class="wikitable"
!Characteristic
!IFRS
!GAAP
|-
|Standard-setting body
|[[International Accounting Standards Board]]
|[[Financial Accounting Standards Board]]
|-
|Primary scope
|International
|Primarily United States
|-
|Accounting approach
|Generally principles-based
|Generally rules-based
|-
|Adoption
|Used or permitted in many jurisdictions
|Primarily used in the United States
|}
The IASB and the FASB have undertaken convergence initiatives aimed at reducing differences between IFRS and GAAP in several accounting areas.

== Advantages ==
IFRS provides several benefits.

These include:

* greater international comparability;
* improved transparency;
* increased consistency;
* enhanced investor confidence;
* facilitation of cross-border investment;
* reduced reporting complexity for multinational corporations.

The adoption of common accounting standards may also reduce the cost of preparing financial statements across multiple jurisdictions.

== Limitations ==
Despite its widespread adoption, IFRS has several limitations.

These include:

* differences in national implementation;
* reliance on professional judgment;
* transition costs;
* complexity of certain accounting standards;
* continuing differences from domestic accounting frameworks.

Interpretation and enforcement may also vary among jurisdictions.

== Impact ==
International Financial Reporting Standards have become one of the principal accounting frameworks used in global financial reporting. By establishing common principles for the preparation and presentation of financial statements, IFRS has improved the comparability and transparency of financial information across international markets. Its widespread adoption has supported cross-border investment, multinational business operations, capital market development, and international economic integration.

== See also ==

* [[International Accounting Standards]]
* [[International Accounting Standards Board]]
* [[IFRS Foundation]]
* [[Generally Accepted Accounting Principles]]
* [[Financial Accounting Standards Board]]
* [[Financial accounting]]
* [[Accounting]]
* [[Accounting standard]]
* [[Financial statement]]
* [[Balance sheet]]
* [[Income statement]]
* [[Cash flow statement]]
* [[Corporate finance]]
* [[Financial management]]
* [[Auditing]]