Question

The International Financial Reporting Standards (IFRSs) refers to IFRSs, IASs, and Interpretations, and they are issued by different bodies. Explain the differences between IFRSs, IASs and Interpretations and whether there is any implication of their being issued by different bodies.

Answer 1

IFRS ( International Financial Reporting Standards)

IFRS or International Financial Reporting Standards issued by International Accounting Standards Board (IASB) are accounting standards which came to Prominence in 2001 that provides consistency and high quality internationally recognised set of accounting standards that bring transparency, accountability and efficiency to financial reporting system around the world.

IFRS Standards helps international comparability and quality of financial information, enabling investors, creditors and other market participants to make informed economic decisions.

IFRS Standards strengthens the information gap between the providers of capital and the people to whom they have entrusted their money to do business. As a source of globally reliable and comparable information, IFRS Standards are also of vital importance to regulators around the world to determine tax and levies.

IFRS standards are required in majority of world countries and around 160 jurisdictions which helps the investors to identify opportunities and risks across the world. Currently United States, Japan and China are major countries which are not follows IFRS standards. It is thought to be a more principles-based accounting system, while GAAP the system followed by U.S is more rules-based.

IAS ( International Accounting Standards)

But International Accounting Standards (IAS) are older accounting standards issued by the International Accounting Standards Committee (IASC). It is formed in 1973, as an independent international standard-setting body based in London.before 2001 it was the prominent Accounting Standard around the world. The goal then, as it remains today, was to make it easier to compare businesses around the world, increase transparency and trust in financial reporting, and foster global trade and investment. The difference between them is such as IAS 17 Leases. While, IFRS represents new accounting standard, such as IFRS 16 Leases.

IASB replaced IASC in 2001 .IFRS refers to the new numbered series of pronouncements that the IASB is issuing, as distinct from the International Accounting Standards (IASs) series issued by its predecessor.IFRS refers to the entire body of IASB pronouncements including standards and interpretations approved by the IASB and IASs and SIC interpretation approved by the predecessor International Accounting Standards Committee.

Interpretations.

The IFRS Interpretations Committee interprets the application of IFRSs and provide timely directions on financial reporting issues not specifically addressed in IFRSs, in the context of the IASB's Framework, and undertakes other tasks at the request of the IASB. International Accounting Standards Board (IASB).

Previously SIC Interpretations were issued by the Standard Interpretations Committee (SIC), and were subsequently endorsed by the International Accounting Standards Board (IASB).

Interpretations of FRSs are to give authoritative guidance on issues that are likely to receive divergent or unacceptable treatment, in the absence of such guidance.

Conclusion

Eventhough there is differences all accounting standards are interdependent.