List of International Financial Reporting Standards in 2024

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What is IFRS (International Financial Reporting Standard)? 

IFRS which stands for International Financial Reporting Standards describes the standard policies in the field of accounting. This defines a certain way of gathering information and presenting a financial report.

International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB) that are intended to bring consistency, transparency, and efficiency to financial statements and reporting across different countries.

IFRS provides common rules in the field of finance and accounting so that business statements are understandable across the International Market.  This helps investors, regulators, and other stakeholders to compare the financial performance of companies from different countries more easily. The administrative center of IFRS is in London which helps in boosting global economic growth along with transparency, and accountability. This also helps in doing efficient work together.

The reporting period starting on or after 1st 2023 comes under the IFRS 17.  It demands that a corporation must evaluate insurance contracts using current estimates. It takes into account the timing of cash flows and uncertainty surrounding insurance contracts. This will demonstrate clear and comprehensive information regarding a company’s financial status and risk.

Significance of International Financial Reporting Standards ( IFRS)

Understanding international Financial Reporting standards is extremely critical, especially for those who dream of a career in finance. Below are the points that help us understand why.

• Primarily, following IFRS maintains consistency in the framework of financial reports across most countries on the globe; as a result, analyzing financial statements becomes easier for investors, stakeholders, and analysts. Subsequently comparing the financial statements with other companies or countries becomes easier.
• Following IFRS standards allows companies to generate crisp, clear, and accurate financial statements; as a result, stakeholders understand the financial strength of a company much better.
• Rapidly increasing globalization enabled businesses to operate from anywhere in the world. Therefore, relying upon IFRS for accounting purposes simplifies the financial reporting for multinational companies. In fact, it also cuts down the cost that comes with the use of various accounting standards.

Advantages of IFRS

IFRS, which is an accounting standard accepted worldwide provides a standardized framework for generating financial statements. Generating financial reports according to IFRS regulations produces consistent and comparable financial reports. Thereby, investors get a clear picture of a company’s financial picture.

• Today’s world is interconnected; as a result, various businesses are constantly changing and growing quickly, therefore, sticking to standard accounting practices that are accepted globally is extremely beneficial. And IFRS accounting standard is accepted by most countries worldwide.
• The guidelines and policies of IFRS enable international mergers and acquisitions by generating accurate financial statements and reports.
• One of the most important advantages of using IFRS is that it is considered a global accounting language since many across the globe abide by these standards. As a result, there is no necessity to generate multiple finance reports. Subsequently, the cost and time to create multiple reports is reduced.
• Additionally following IFRS produces accurate and comparable financial statements; as a result, investors and stakeholders can accurately assess the company’s financial position and make better decisions.

List Of IFRS Standards

1. IFRS 1: First-time Adoption of International Financial Reporting Standards

It sets out the procedures for a company to follow International Financial Reporting Standards for the first time as the basis for its general financial reporting. This IFRS provides limited exemptions from the general requirement. The purpose is that it can comply with any international financial reporting standards in effect at the end of the initial IFRS reporting period. There are many advantages of applying IFRS in India from the point of view of finance, industry, and investors.

2. Share-Based Payment

This requires a company to recognize share-based payments like issued shares, share options, or share appreciation rights in its financial statements. It consists of cash, other assets, or equity, or communication with employees. It includes specific requirements for cash-settled, equity-settled share-based transactions. As well as the extent to which the entity or supplier has the right to use an equity instrument

3. Business Combinations

This IFRS standard displays accounting information when the acquirer gains control of a business (for example, through an acquisition or merger). Such combined transactions are accounted for using the ‘acquisition method’. This generally requires assets acquired and liabilities that can be measured at their fair values at the acquisition date. The principal interest of IFRS is that it facilitates the comparison of different transactions, as data is presented in a single format.

4. Insurance Contracts

With few exceptions, it applies to both the insurance contract(s) issued by an entity and the reinsurance contracts it holds. In the course of the International Accounting Standards Committee’s comprehensive work on insurance contracts, the standard provides a temporary exemption from certain other IFRS requirements. For example, on selecting the accounting policies for insurance contracts, one can get exemptions from International Accounting Standard- 8 Accounting Policies, Changes in Accounting Estimates.

5. IFRS 5: Non-current assets held for sale and disposal of business

This IFRS standard says how non-current assets held for sale (or distribution to owners will be accounted for. Assets held for sale are generally not amortized and are measured at the lower of carrying amount and a fair value free costs to sell. They are presented separately in the statement of financial position. Discontinued business and real estate use also require specific disclosures.

6. IFRS 6: Survey and Valuation of Minerals

It has the effect of allowing entities to adopt the standard for the first time to use accounting policies for the exploration and evaluation of assets that were applied before adopting international financial reporting standards. It also modifies impairment testing of exploration and evaluation assets by introducing different impairment indicators and allowing the carrying amount to be tested at an aggregate level (not greater than a segment).

7. IFRS 7: Financial Instrument: Disclosures

It calls for an entity to disclose information approximately the materiality of economic units, and it calls for unique disclosures about the character and significance of the risks posed through the one economic device, each qualitatively and quantitatively

8. IFRS 8: Operating Segments

It requires particular classes of entities (essentially those with publicly traded securities) to disclose information about their operating segments, products and services, the geographical areas in which they operate, and their major customers. Information is based on internal management reports, both in the identification of operating segments and measurement of disclosed segment information.

9. IFRS 9: Financial Instruments

IFRS standard replaces the International Accounting Standards Committee’s International Accounting Standard 39 Financial Instruments which is Acceptance and Measurement. This includes requirements for acceptance and measurement, loss, acceptance, and safety audits in general.

10. Consolidated Financial Statements

It sets out the requirements for the preparation and presentation of consolidated financial statements, where companies must consolidate their controlled subsidiaries Control requires disclosure or the right to variable and powerful interest that will be used to influence those returns through the power of the investor.

11. IFRS 11: Joint Arrangements

It outlines the accounting by entities that jointly control an arrangement. Joint control involves the contractually agreed sharing of control and arrangements subject to joint control are classified as either a joint venture; representing a share of net assets and equity accounted or a joint operation; representing rights to assets and obligations for liabilities, accounted for accordingly.

12. IFRS 12: Disclosure of Interest in Other Companies

It is a consolidated disclosure standard requiring a wide range of disclosures about an entity’s interests in subsidiaries, joint arrangements, associates and unconsolidated ‘structured entities’. Disclosures are presented as a series of objectives, with detailed guidance on satisfying those objectives.

13. Fair Value Measurement

It relates to IFRSs that require or permit fair value measurements or disclosures. It provides an IFRS framework for fair value measurements and requires fair value measurements to be disclosed. The standard defines a fair value based on a transaction rather a than value concept and uses a fair value system. Hence, resulting in a market-based rather than company-specific measurement

14. IFRS 14: Regulatory deferral accounts

IFRS allows an entity that is the first to adopt international financial reporting standards. It includes both the initial adoption of IFRS and subsequent financial reporting. This is to ‘continue to account, with minimal changes, in accounting deferrals by and pre-GAAP. Statutory securities held in accounts, and movements therein, are presented separately in the statement of financial position. However, in the statement of profit and loss and other comprehensive income, disclosures are required to be specifically revealed

15. IFRS 15: Revenue from the Contract

It prescribes how and when IFRS reporters will recognize revenue. Reporters require such entities to provide users of financial statements with information on a wide range of relevant issues. The IFRS provides a single principle-based five-step model for use in all contracts with customers. This IFRS standard applies to annual reporting periods starting on or after January 1, 2018.

16. IFRS 16: Lease Accounting

It defines how a reporter for International Financial Reporting Standards shall perceive, and reveal leases. The preferred offers an accounting standard for a tenant. In this model, tenants must count on all belongings and liabilities for the rent. This is until the term of the lease is three hundred and sixty-five days. And if the underlying asset is worth much less. While lessees hold to categorize rentals as both running or finance, the IFRS 16 approach to accounting for lessees has modified little from its predecessor, the International Accounting Standard- . 17.

17. IFRS 17: Insurance Contracts

This says that IFRS 17 is applicable for annual reporting intervals which are starting on or after 1 January 2021. This must be amended to IFRS 9 and IFRS 15 from the Inventory of International Finance. The insurance contract consists of both a service and a financial instrument contract. Many such insurance contracts will ultimately generate cash flow with considerable variability over a long span. 

These are the IFRS (International Financial Reporting Standards) issued by using the IASB. International Accounting Standards (IAS) have been issued via its predecessor body IASC from 1973 to 2001. In India, the Accounting Standard Board issued Indian Accounting Standards (Ind AS).This has converged Indian GAAP with International Financial Accounting Standards (IFRS). Both the International Financial Reporting Standards and IAS are strengths.

The following is a list of accounting principles recognized in the IAS

IAS 1: Presentation of Financial Statements

IAS 1 includes requirements for financial statements and policies, procedures and minimum content requirements. Features include complete financial statements issued annually and include the previous year’s balance sheet. This is a new addition to the list of IFRS standards and IAS standards.

IAS 2: Inventory

The second IAS in the IAS and IFRS list is about the guidance for the determination of the cost formulas of inventories and subsequent recognizing the cost as an expense. This can include any write-down to any other realizable value. 

IAS 7: Statement of Cashflows

Guidelines for the presentation of the data in the announcement of cash flows as consistent with the IFRS requirements. For that IAS standards are described in IAS 7. Cash drift records include cash and cash equivalents of gadgets transformed all through this era.

IAS 8: Accounting Policies, Changes, and Estimate Errors

Accounting treatments covered in IAS eight include criteria for choosing and enhancing accounting rules. This also involves adjusting accounting estimates, disclosing changes in accounting regulations, and correcting obligatory errors.

IAS 10: Events after the reporting duration

IAS 10 units out the circumstances under which an entity can modify its monetary statements. This is for the occasions that manifest after the reporting period. By IAS 10, there’s additional guidance that an entity should offer. This is for the period in which financial statements have been allowed to be mentioned.

IAS 11: Construction contracts

IAS 11 of IFRS affords a benchmark for the accounting of sales and costs associated with production contracts. IAS 11 calls for the effects of a creation settlement, dependable estimates, and contract charges for the portion on the way to be finished at the quit of the reporting period.

IAS 12: Income Taxes

IAS 12 affords an accounting answer for income taxes that consists of each home and overseas tax. This may depend on taxable profits. The requirement for the IAS 12 is to recognize a deferred tax asset or liability. This is for temporary differences along with a few exceptions.

IAS 16: Property, plant and equipment

In this set of IFRS standards, IAS 16 sets out the principles of recognition of cash as property, plant and equipment as assets for measuring cash flows. This is also for measuring the associated depreciation and loss established.

IAS 17: Transfers

International Financial Reporting Standard 15 replaces IAS 16 from the set of IFRS standards. IAS 17 is divided into two categories: financial leases and operating leases. With a financial guarantee, if the contract is significantly moved, both risk and reward can be contingent on ownership.

IAS 18: Revenue

The IAS 18 is superseded by IFRS 15 of the International Financial Reporting Standards list. IAS 18 addresses the right moment and how to recognize and measure revenue. What is Revenue? It is the gross inflow of economic benefits acquired by ordinary activities of an entity during an estimated period. IAS 18 covers income from events relating to the sale of goods, the provision of services, the disposal of company assets by others who pay interest, royalties and dividends.

IAS 19: Employee benefits

In a set of IFRS standards and IAS standards, IAS 19 covers all types of employee benefits except for share-based payments. While International Financial Reporting Standard 2 covers the payment of share-based employee benefits.

 IAS 19 in the list of IFRS standards requires the enterprise to recognize a contract when an employee has provided service in trade for future employee benefits and the recognition for an expense when the entity acquires economic benefits arising for the services offered by the employees in exchange for employee perks.

IAS 20: Accounting for Government Grants and the Disclosure of Government Assistance

The IAS 20 in the IAS and IFRS list is about the grants provided by the government, which are transfers of resources given to an enterprise in return for past or future agreements with specific conditions relating to the operating activities of the enterprise. The economic benefit specifically provided to an entity or range of entities qualifying under specific criteria is called government support.

IAS 21: Effects of the Changes in Foreign Exchange Rates

The IAS 21 prescribes how an entity should carry on foreign activities in two ways. This may consist of transactions using foreign currencies, or it may include some international business operations. The principles issued by the IAS 21 in the IFRS standards list are used by the exchange rate/s to report the effects of the changes in it for financial statements.

IAS 23: Debt

IAS 23 of the IAS and IFRS list guides the method of measuring costs for entities. This is the context of particular costs of acquisition and manufacturing or production of goods with an entity’s debt they all pay for it.

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Implementation of IFRS:

Many countries, including countries like Saudi Arabia, are adopting IFRS. However, following the below steps will help in the successful implementation of IFRS:

• Primarily, It is important to understand how implementing will impact a company’s financial performance. And, this can be done by establishing a team that efficiently compares differences in financial statements using GAAP and IFRS.
• After the first step is successful, it is crucial to get acceptance from the board of directors because implementing IFRS will bring changes in information technology, employee records, and fixed assets; therefore, board of directors approval is necessary.
• The third step involves, forming an adoption team suitable for the company. The ideal responsibility of this team is to Implement IFRS successfully.

Applications of IFRS:

• Adhering to IFRS guidelines attracts foreign investors because the financial report produced based on IFRS accounting standards accurately reveals the financial position of a company.
• Also, to work with foreign companies, a business must stick to IFRS or similar corporate standards.
• Additionally, by following IFRS practices a company can enhance its transparency by adhering to these standards as precise financial statements are generated.

FAQs

Q1. What is IFRS?

Ans. IFRS is a set of international accounting standards developed by the International Accounting Standards Board (IASB) aiming to bring transparency, and efficiency to financial markets.

Q2. What are the key challenges in adopting IFRS?

Ans: Key challenges include significant changes in accounting policies and procedures, adjustments to financial systems, and management of financial reporting and communication with stakeholders.

Q3. Why is IFRS Important?

Ans. IFRS is important as it provides a common accounting language that enhances the comparability of financial information across different countries.

Q4. What are the key challenges in adopting IFRS?

Ans. Key challenges include significant challenges in accounting policies and procedures, personnel training, adjustments to financial systems, and management of the impact on financial reporting and communication with stakeholders.

Q5. What is IFRS 9 and why is it important?

Ans. IFRS 9 deals with the accounting for financial instruments, covering classification, measurement, impairment, and hedge accounting. It is important because it improves the transparency and accuracy of financial reporting for financial instruments.

Q 6. What is an IFRS alternative in India?

Ans. India follows Indian Accounting Standards or Ind AS, which is equivalent to IFRS.

Q7. How to differentiate IFRS from GAAP?

Ans. Although IFRS and GAAP are accounting standards, they both work on different principles. While the former works are based on a principle approach, the latter is based on legal authority. Another major difference is that IFRS is followed by several countries, and American companies rely on GAAP.

Q8.What accounting standard is implemented in India?
Ans. IFRS equivalent called Indian Accounting Standard or Ind AS is abided by companies in India.

Q9. Must all companies in India abide by IFRS?
Ans. No, it is not necessary, primarily IFRS equivalent Ind AS is used in India. Secondly, only listed companies must adhere to accounting standards.

Q10.Why must listed companies adhere to IFRS standards?
Ans. The main of introducing IFRS is to create a common global accounting language so that financial reports are same and comparable across all the countries.

FAQs

Q1. Is IFRS a Good Career?

Ans. IFRS professionals are in high demand these days. Finance professionals who have an IFRS certification know international accounting standards and so get more job opportunities.

Q2 What are the benefits of becoming certified in IFRS?

Ans. IFRS is an accounting standard adopted in more than 120 countries and operates on an international platform. Therefore, taking an IFRS certification course is very fruitful as it is highly recognized.

Q3. How Much Salary Can I Expect After Doing an IFRS Certification Course?

Ans. After completion of the IFRS certification course, you can expect a decent package of about Rs. 20 to Rs. 25 lacs per year. However, the salary depends on the skill set of the person.  The salary you will get also depends on your skills, knowledge and experience level.

Q4 What is a good organization offering an IFRS certification course?

Ans. Henry Harvin offers the best IFRS certification course. Trainers here at Henry Harvin are experts and skilled in imparting expertise and knowledge to their students. You will get regular feedback on each assignment. At Henry Harvin, you can take advantage of the various career opportunities and personalized job placement support.

Q5 What is the value of an IFRS certification course? I still have to write the IFRS test.

Ans: The IFRS certification course is a 3 – 6 month program specifically designed for professionals to prepare for IFRS exams internationally. It will help you clear the exam.

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