Mastering IFRS (International Financial Reporting Standards): What Every Accountant Should Know
Posted: Wed Dec 18, 2024 4:50 am
International Financial Reporting Standards (IFRS) , as their name suggests, are a set of standards applied in many countries. They are sometimes known by their English name: International Financial Reporting Standards (IFRS).
Start of marked textTWEET IT! Do you know IFRS? Take note of the most important details of its application in Spain!End of marked text
For accountants , IFRS are an important point of reference . The current context with solutions that automate many tasks demands professionals with an absolute command of this
cuba email list type of standards. After all, a substantial part of the value of their work is focused on facilitating transitions to new information requirements and solving particular cases. As we will see, International Financial Reporting Standards guide both aspects.
Why do International Financial Reporting Standards exist?
Accounting is a profession that deals with certain concepts that are widely accepted internationally . This has been the case, at least since Luca Pacioli and his double-entry system, more than five centuries ago.
However, accounting also involves making decisions and following specific criteria . And this is where differences begin to emerge in the way transactions are accounted for depending on the location. Historically, each country, and even each location, has had its own standards or practices that are commonly used.
In general, these differences have been relatively small, so that it can be said that the 'accounting language' is intelligible . However, if you go down to the specific case you can find that a transaction can be accounted for in two or more ways. And that, when these entries are key for a company, can cause great differences in the figures and texts that make up the annual accounts.
Obviously, this represents a problem in decision-making . For third parties, it represents a difficulty in interpretation and comparison. And, for the companies themselves, it becomes more difficult to obtain credibility beyond their borders.
To solve these problems , there are two main approaches:
The creation of international associations and working groups to address major accounting debates.
The adoption of international standards proposed by these working groups. This can be done by states on an obligatory basis or by companies on a voluntary basis.
IFRS has made accounting information more internationally comparable , which facilitates international trade, investment and financing.
How do IFRS come about?
IFRS are the work of the International Accounting Standards Board ( IASB ). This is a committee of the IFRS Foundation, dedicated to the issuance of standards. It arose from the decision of a previous organization, the International Accounting Standards Committee ( IASC ), to restructure itself in 2000. This is the reason why some standards are called International Accounting Standards (IAS) and others IFRS. The former were called IAS and the latter have been renamed IFRS.
Start of marked textTWEET IT! Do you know IFRS? Take note of the most important details of its application in Spain!End of marked text
For accountants , IFRS are an important point of reference . The current context with solutions that automate many tasks demands professionals with an absolute command of this
cuba email list type of standards. After all, a substantial part of the value of their work is focused on facilitating transitions to new information requirements and solving particular cases. As we will see, International Financial Reporting Standards guide both aspects.
Why do International Financial Reporting Standards exist?
Accounting is a profession that deals with certain concepts that are widely accepted internationally . This has been the case, at least since Luca Pacioli and his double-entry system, more than five centuries ago.
However, accounting also involves making decisions and following specific criteria . And this is where differences begin to emerge in the way transactions are accounted for depending on the location. Historically, each country, and even each location, has had its own standards or practices that are commonly used.
In general, these differences have been relatively small, so that it can be said that the 'accounting language' is intelligible . However, if you go down to the specific case you can find that a transaction can be accounted for in two or more ways. And that, when these entries are key for a company, can cause great differences in the figures and texts that make up the annual accounts.
Obviously, this represents a problem in decision-making . For third parties, it represents a difficulty in interpretation and comparison. And, for the companies themselves, it becomes more difficult to obtain credibility beyond their borders.
To solve these problems , there are two main approaches:
The creation of international associations and working groups to address major accounting debates.
The adoption of international standards proposed by these working groups. This can be done by states on an obligatory basis or by companies on a voluntary basis.
IFRS has made accounting information more internationally comparable , which facilitates international trade, investment and financing.
How do IFRS come about?
IFRS are the work of the International Accounting Standards Board ( IASB ). This is a committee of the IFRS Foundation, dedicated to the issuance of standards. It arose from the decision of a previous organization, the International Accounting Standards Committee ( IASC ), to restructure itself in 2000. This is the reason why some standards are called International Accounting Standards (IAS) and others IFRS. The former were called IAS and the latter have been renamed IFRS.