International Financial Reporting Standards(IFRS) are a set of accounting standards developed by the International Accounting Standards Board(IASB). IFRS were established in order to have a common accounting language, so business and accounts can be understood from company to company and country to country. The goal of IFRS is to provide a global framework for how public companies prepare and disclose their financial statements. IFRS provides general guidance for the preparation of financial statements.
IFRS Standards bring transparency by enhancing the international comparability and quality of financial information, enabling investors and other market participants to make informed economic decisions. IFRS Standards contribute to economic efficiency by helping investors to identify opportunities and risks across the world.
IFRS are standard in many parts of the world, including the European Union and many countries in Asia and South America, but not in the United States. The Securities and Exchange Commission (SEC) is in the process of deciding whether or not to adopt the standards in America. Advocates suggest that a global adoption of IFRS would save money on alternative comparison costs and individual investigations, while also allowing information to flow more freely.
In the countries that have adopted IFRS, both companies and investors benefit from using the system, since investors are more likely to put money into a company if the company’s business practices are transparent. Companies that do a lot of international business benefit the most from IFRS.
IFRS standards are sometimes confused with International Accounting Standards (IAS), which are the older standards that IFRS replaced. IAS were issued from 1973 to 2000. Likewise, the International Accounting Standards Board (IASB) replaced the International Accounting Standards Committee (IASC) in 2001.
We at Msi Alnoman & Ravi are fully qualified to provide Accounting services that comply with the IFRS Standards.