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IFRS are standards and principles that are used in the preparation of financial statements set by the International Accounting Standards Board in 2001. The IFRS uses the principle of the Accrual basis which recognizes transactions when they occur, not when funds are received or paid out for the transaction and the Going concern which assumes that an organization will continue operations in the future. The IFRS states that financial statements should consist of a Balance Sheet which is used to show the financial position of an organization, Income Statement which is used to show the performance of an organization and the Cash Flow Statement which is used to show the movement of cash and cash equivalents.
IFRS has been adopted in more than 100 countries including the European Union by public companies.
Summaries of the standards are:
IFRS 1: First-time Adoption of International Financial Reporting Standards; outlines the procedures that a company must follow the first time it adopts to IFRSs to prepare financial statements.
IFRS 2: Share-based Payment; is used when an entity acquires or receives goods and services for equity based payment.
IFRS 3: Business Combinations; a revised IFRS 3 was published by the IASB on 10 January 2008 and will only be effective for business combinations from 1 July 2009.
IFRS 4: Insurance Contracts; applies to all insurance contracts that a company issues and reinsurance contracts that the company holds.
IFRS 5: Non-current Assets Held for Sale and Discontinued Operations; replaces IAS 35-Discontinuing Operations requires the total amount for discontinued operations to be displayed on the income statement.
IFRS 6: Exploration for and evaluation of Mineral Resources
IFRS 7: Financial Instruments: Disclosures; replaces the disclosures that were required by IAS 30. The IFRS 7 requires a company to group its financial instruments into classes using the similarity of the instruments. The two main categories required by the IFRs 7 are information about the significance of financial statements and information about the nature and extent of risks arising from financial instruments.
IFRS 8: Operating Segments; will be effective for annual periods beginning from 1 January 2009 and applies to the individual financial statements of a company whose debt or equity are traded in a public market.
IAS 1: Presentation of Financial Statements; was revised in 1997 and outlines the basis for the presentation of financial statements so that they can be compared with previous year financial statements and financial statements from other companies. The financial statement must provide information on a company's Assets, Liabilities, Equity, Income and expenses, Changes in Equity and Cash Flows.
IAS 2: Inventories; gives guidance on how inventories should be costed.
IAS 7: Cashflow Statements; requires the changes in cash and cash equivalents to be presented by means of a statement of cash flows which classifies cash flows into Operating, investing and financing activities.
IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors; a company is permited to change its accounting policy if it is required by a standard or if it results in the financial statements giving more accurate information.
IAS 10: Events after the Balance Sheet date
IAS 11: Construction Contracts; outlines the treatment of revenue and costs related to construction contracts.
IAS 12: Income Taxes; outlines the treatment of income taxes.
IAS 14: Segment Reporting; outlines the principles for reporting financial information by line of business and by geographical area.
IAS 16: Property, Plant and Equipment; outlines the accounting treatment of property, plant and equipment by using the timing of recognition of assets, the determination of their carrying amounts and the depreciation charges against them.
IAS 17: Leases; outlines the policies and disclosures to apply in relation to finance and operating leases for lessees and lessors.
IAS 18: Revenue; outlines the treatment of revenue arising from certain types of transactions and events.
IAS 19: Employee Benefits; outlines the accounting and disclosure for employee benefits which states that cost of providing employee benefits should be recognized in the period in which the benefit is earned by the employee, rather than when it is paid.
IAS 20: Accounting for Government Grants and Disclosure of Government Assistance; outlines the accounting for and disclosure of Government Grants and Government Assistance.
IAS 21: The Effects in Changes in Foreign Exchange Rates; outlines the basis of how to include foreign currency transactions in a company's financial statements and how to then translate the information into a presentation currency.
IAS 23: Borrowing Costs; outlines how borrowing costs should be treated. Borrowing costs include interest on bank overdrafts and loans, finance charges on finance leases and exchange differences in foreign currency loans.
IAS 24: Related Party Disclosures; outlines that an entity's financial statements should contain the necessary disclosures drawing attention to the possibility that its financial position may have been affected by the presence of other related parties.
IAS 26: Accounting and Reporting by Retirement Benefit Plans; outlines the measurement and disclosure principles for the reports of retirement benefit plans.
IAS 27: Consolidated Financial Statements; outlines the standards used in the preparation and presentation of consolidated financial statements for a group of entities under the control of a parent.
IAS 28: Investments in Associates; the standard is used on all investments in which an investor has significant influence but not control over.
IAS 29: Financial Reporting in Hyperinflationary Economies; outlines the standards to be used by enterprises reporting in the currency of a hyperinflationary economy so that the financial information is meaningful.
IAS 31: Interests in Joint Ventures; outlines the accounting in all interests in joint ventures and the reporting of joint venture assets, liabilities, income, and expenses in the financial statements of venturers and investors.
IAS 32: Financial Instruments: Presentation; is used to enhance financial users' understanding of the meaning of financial instruments to an entity's financial position, performance and cash flows.
IAS 33: Earnings Per Share; outlines the presentation and determination of earnings per share in order to improve performance comparisons among different enterprises during the same period and between different accounting periods for the same enterprise.
IAS 34: Interim Financial Reporting; outlines the minimum content of an interim financial report.
IAS 36: Impairment of Assets; outlines on how to ensure that assets are carried at no more than their recoverable amount and defines how the recoverable amount is calculated.
IAS 37: Provisions Contigent Liabilities and Contigent Assets; ensures that appropriate recognition criteria and measurement basis are applied to provisions, contiginent liabilities and contigent assets.
IAS 38: Intangible Assets; outlines the accounting treatment for intangible assets that are not included in another IAS. These intangible assets include computer software, marketing rights, customer and supplier relationships, patents, copyrights.
IAS 39: Financial Instruments: Recognition and Measurement
IAS 40: Investment Property; outlines that investment property should be recognized as an asset when future economic benefits that are associated with the property will flow into the enterprise and the cost of the property can be measured accurately.
IAS 41: Agriculture; requires an enterprise to recognize a biological asset only when the enterprise controls it and it is likely that economic benefit will flow to the enterprise and the value of the asset can be measured accurately. |
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