What are IFRS standards? Where do they come from?
Posted: Sun Jan 12, 2025 4:33 am
IFRS standards were imposed for the banking sector in January 2018. Since then, this application has become a major issue in the field. It has indeed become an upheaval in terms of the valuation and depreciation of financial instruments . It is therefore essential to understand these international accounting standards as best as possible to judge the issues they have had for the banking sector.
The presence of vnpay database standards has been observed in Europe since 2005. For example, there are around forty IAS standards, or around twenty IFRS standards . There are also around ten accounting interpretations (such as the SIC or Standing Interpretation Committee), not to mention the IFRIC interpretations.
IFRS standards aim to improve the financial and non-financial communication of companies. These standards can be summarized by the accounting language. They are mandatory standards for listed companies as well as cross-border groups. They aim to harmonize accounting transparency . These standards aim to present the financial and accounting statements of companies to obtain a uniform accounting system, regardless of the country of origin of the company.
These standards are developed by the International Financial Reporting Standards Foundation (or IFRS foundation). It is up to the International Accounting Standards Board (IASB) to develop them, and the International Financial Reporting Interpretations Committee (IFRIC) to control them. Every 5 years, the foundation will carry out a standardization to identify the different problems and find solutions.
The main purpose of these standards is to be able to compare the financial statements of companies based in different countries. This would simply be impossible if there were no general standards, each country having specific rules. This is a very interesting asset for investors, but also for international creditors who will be able to analyze the financial situation of companies with European standards. These will be taken into account as a common accounting language. This will be understood by the greatest number and this in different countries.
These standards, to be usable, will be based on different principles. We can thus cite:
- The priority of the balance sheet over the income statement;
- The principle of neutrality;
The presence of vnpay database standards has been observed in Europe since 2005. For example, there are around forty IAS standards, or around twenty IFRS standards . There are also around ten accounting interpretations (such as the SIC or Standing Interpretation Committee), not to mention the IFRIC interpretations.
IFRS standards aim to improve the financial and non-financial communication of companies. These standards can be summarized by the accounting language. They are mandatory standards for listed companies as well as cross-border groups. They aim to harmonize accounting transparency . These standards aim to present the financial and accounting statements of companies to obtain a uniform accounting system, regardless of the country of origin of the company.
These standards are developed by the International Financial Reporting Standards Foundation (or IFRS foundation). It is up to the International Accounting Standards Board (IASB) to develop them, and the International Financial Reporting Interpretations Committee (IFRIC) to control them. Every 5 years, the foundation will carry out a standardization to identify the different problems and find solutions.
The main purpose of these standards is to be able to compare the financial statements of companies based in different countries. This would simply be impossible if there were no general standards, each country having specific rules. This is a very interesting asset for investors, but also for international creditors who will be able to analyze the financial situation of companies with European standards. These will be taken into account as a common accounting language. This will be understood by the greatest number and this in different countries.
These standards, to be usable, will be based on different principles. We can thus cite:
- The priority of the balance sheet over the income statement;
- The principle of neutrality;