What is IFRS?

Definition

IFRS, or International Financial Reporting Standards, are the accounting standards issued by the International Accounting Standards Board (IASB), part of the IFRS Foundation. More than 140 jurisdictions require them for all or most listed companies, including the EU and UK for consolidated accounts of listed groups, Australia, Canada and much of Asia and Africa.

Also calledIFRS Accounting StandardsInternational Financial Reporting StandardsIAS

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Set by: International Accounting Standards Board
Required in: More than 140 jurisdictions
Not used for: US domestic listed companies

How IFRS works

The standards are numbered in two series: older IAS standards, such as IAS 2 on inventories and IAS 16 on property, plant and equipment, and newer IFRS standards, such as IFRS 15 on revenue and IFRS 16 on leases. IFRS 18, which replaces IAS 1 on presentation, applies to annual periods beginning on or after 1 January 2027. Interpretations are issued by the IFRS Interpretations Committee. IFRS is principles-based: it sets objectives and leaves more to judgement than US GAAP, which has more detailed rules. A separate, simpler IFRS for SMEs standard exists for private companies. Countries adopt IFRS through their own law, sometimes with an endorsement step, as the EU and UK do. The US does not allow IFRS for domestic listed companies but accepts it from foreign private issuers.

Common questions

What is the difference between IFRS and US GAAP?+

IFRS is issued by the IASB and used in most of the world; US GAAP is issued by the FASB and used by US companies. IFRS is more principles-based, and specific rules differ, for example LIFO inventory is allowed only under US GAAP.

What is the difference between IAS and IFRS?+

IAS standards were issued by the IASB's predecessor before 2001 and many are still in force. Standards issued since then are numbered IFRS. Together they make up IFRS Accounting Standards.

Do private companies have to use IFRS?+

Usually not. Most countries let private companies use local standards, such as FRS 102 in the UK and Ireland, or the IFRS for SMEs standard. Listed groups are the main required users.