International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB). The main objective of IFRS is to have one global set of accounting standards.
Adoption of an accounting standard is purely driven by decisions made by each country’s administration. IFRS is set to become the global standard for the preparation of public company financial statements. It is gradually replacing the existing region-specific accounting standards, popularly known as local GAAP.
Currently, more than 120 countries around the world permit accounting practices that conform to IFRS. More than 85 countries make it mandatory for companies to apply accounting and reporting methodology using IFRS. Among the popular regions to adopt IFRS are European Union (EU), Hong Kong, Australia, Russia, South Africa, Singapore, and GCC countries
IFRS in European Union
All the listed EU companies are required to follow IFRS since 2005. Since the European Financial Reporting Advisory Group advises EU on financial compliance matters, EU IFRS might be different from the IFRS applied elsewhere.
IFRS in BRICS nations
|Brazil||IFRS required for Consolidated financial statements of all listed companies since Sep 2010|
|Russia||Mandatory for Banks. Optional for listed companies’ consolidated financial statements|
|India||Phased implementation starting April 2011. Currently optional for listed companies’ consolidated financial statements|
|China||No IFRS. Local standard is leaning towards IFRS with severe differences|
|South Africa||Required for all listed companies. Optional for unlisted companies|
IFRS in the United States
At present,in the United States, IFRS is not recognized. But, Securities Exchange Commission (SEC) has plans to implement IFRS to the listed corporations as early as 2015.
IFRS in the United Kingdom
In the United Kingdom, IFRS is mandatory for listed companies’ consolidated financial statements and is optional for other statutory filings.
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