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International Financial Reporting Standards

Updated on: May 4th, 2021


7 min read

The field of financial reporting in India has seen major changes in the last 5 years. As the trade increasingly moves beyond the national boundaries, the compliance and reporting requirements move too. Presenting the financial statements of an entity in accordance with the reporting requirements of every country it has a presence in, is becoming increasingly difficult.

What is IFRS?

The International Financial Reporting Standards (IFRS) are accounting standards that are issued by the International Accounting Standards Board (IASB) with the objective of providing a common accounting language to increase transparency in the presentation of financial information.

What is IASB?

The International Accounting Standards Board (IASB), is an independent body formed in 2001 with the sole responsibility of establishing the International Financial Reporting Standards (IFRS). It succeeded the International Accounting Standards Committee (IASC), which was earlier given the responsibility of establishing the international accounting standards. IASB is based in London. It has also provided the ‘Conceptual Framework for Financial Reporting’ issued in September 2010 which provides a conceptual understanding and the basis of the accounting practices under IFRS.

Components of Financial Statements under IFRS

A complete set of financial statements prepared in compliance with the IFRS would ideally comprise of the following:

  • A statement of financial position as at the end of the period – more commonly known to us as the ‘Balance sheet’.
  • statement of profit and loss for the year and the statement of other comprehensive income – Other comprehensive income would include those items of income/expense that are not recognized in the profit and loss account to comply with the other relevant standards.

Both these statements may either be combined or shown separately.

  • A statement of changes in equity – This would include a reconciliation between amounts shown at the beginning and the end of the year.
  • statement of cash flows for the period
  • Notes to the financial statements – including a summary of significant accounting policies followed and other explanatory information

The financial statements would sometimes also include a statement of the financial position of an earlier period in the following scenarios:

  • When an entity applies an accounting policy retrospectively;
  • When an entity retrospectively restated an item in its financial statements; or
  • When an entity reclassifies an item in its financial statements.

List of International Financial Reporting Standards (IFRS)

As already discussed, the Standards issued by the IASB are called IFRS. The predecessor body, IASC, had however already issued certain International Standards which are called International Accounting Standards (IAS). These IAS were issued by the IASC between 1973 and 2001. Both IAS and the IFRS continue to be in force. The standards are listed below:

Standard No.Standard Title
IFRS 1First-time Adoption of International Financial Reporting Standards
IFRS 2Share-based Payment
IFRS 3Business Combinations
IFRS 4Insurance Contracts
IFRS 5Non-current Assets Held for Sale and Discontinue Operations
IFRS 6Exploration and Evaluation of Mineral Resources
IFRS 7Financial Instruments: Disclosures
IFRS 8Operating Segments
IFRS 9Financial Instruments
IFRS 10Consolidated Financial Statements
IFRS 11Joint Arrangements
IFRS 12Disclosure of Interests in Other Entities
IFRS 13Fair Value Measurement
IFRS 14Regulatory Deferral Accounts
IFRS 15Revenue from Contracts with Customers
IFRS 16Leases
IFRS 17Insurance Contracts
IAS 1Presentation of Financial Statements
IAS 2Inventories
IAS 7Statement of Cash Flows
IAS 8Accounting Policies, Changes in Accounting Estimates and Errors
IAS 10Events after the Reporting Period
IAS 11Construction Contracts
IAS 12Income Taxes
IAS 16Property, Plant, and Equipment
IAS 17Leases
IAS 18Revenue
IAS 19Employee Benefits
IAS 20Accounting for Government Grants and Disclosure of Government Assistance
IAS 21The Effects of Changes in Foreign Exchange Rates
IAS 23Borrowing Costs
IAS 24Related Party Disclosures
IAS 26Accounting and Reporting by Retirement Benefit Plans
IAS 27Separate Financial Statements
IAS 28Investments in Associates and Joint Ventures
IAS 29Financial Reporting in Hyperinflationary Economies
IAS 32Financial Instruments: Presentation
IAS 33Earnings per Share
IAS 34Interim Financial Reporting
IAS 36Impairment of Assets
IAS 37Provisions, Contingent Liabilities, and Contingent Assets
IAS 38Intangible Assets
IAS 39Financial Instruments: Recognition and Measurement
IAS 40Investment Property
IAS 41Agriculture

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Quick Summary

Financial reporting in India has evolved due to globalization. IFRS are accounting standards issued by IASB to improve transparency. IASB succeeded IASC and is based in London. It introduced the ‘Conceptual Framework for Financial Reporting’. Components of financial statements under IFRS include balance sheet, profit and loss statement, equity changes, cash flow statement, and notes. IAS and IFRS are international standards focusing on various financial aspects.

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