Here it is Your Premium Source of Clear IFRS Explanations
International Financial Reporting Standards, usually called IFRS, are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB) to provide a common global language for business affairs so that company accounts are understandable and comparable across international boundaries. They are a consequence of growing international shareholding and trade and are particularly relevant for companies with shares or securities listed on a public stock exchange. They are progressively replacing the many different national accounting standards. Your Premium Source of Clear IFRS Explanations
IFRS are widely used around the world but have not replaced the separate accounting standards in the United States where US GAAP is applied. Your Premium Source of Clear IFRS Explanations
This site: Frequently Asked Questions International Financial Reporting Standards – FAQ | IFRS
There are a lot of websites and more traditional outlets providing information on International Financial Reporting Standards (IFRS). The actual standards issued by the International Accounting Standards Board (IASB), publications from audit firms, worldwide and country-by-country, providing implementation and change services, books from (educational) book publishers providing the theory and history of accounting policies and techniques, software developers and suppliers providing (automated) accounting solutions, independent professionals selling tools or their services and individuals trying to provide a different solution.
A basic concepts bootcamp
A basic concepts bootcamp to guide readers through accounting fundamentals. Fully up-to-date treatment of key IFRS changes including revenue recognition, leasing and insurance accounting. Specialist chapters on banks, insurance accounting, off balance sheet finance, financial instruments and consolidations. Detailed worked examples throughout, supplemented by ‘analysis focus’ to show the real world application of concepts. Your Premium Source of Clear IFRS Explanations
A website as an more easily accessible guide to IFRS
Hyperlinks improve going to a subsection or obtain a quick detail or background without getting lost or distracted from the core of the IFRS problem you are trying to solve or are trying to understand for your next examination.
The IFRS glossary is an alphabetical list of IFRS keywords and IFRS Definitions. Or sometimes just interesting focused IFRS Topics, these narratives are mostly from 600 to just under 1,000 words – but there is no guarantee.
All Blogs A – Z is a similar but many times broader list of IFRS subjects and narratives/examples/accounting examples and journal entries, from basic accounting principles to sophisticated synthetic financial instruments. These narratives tend to be longer, but again there is no guarantee.
Then again the IFRS – IAS – IFRIC – SIC button provides access to all IFRS standards, IFRSs and IFRICs on one side and IASs and SICs on the other. With IFRSs for SMEs killing it at the end.
But also on the right side top – down, starting with Summary topics main IFRS, a list for each main standard with alle blogs more or less following the content dictionary of each standard, each important blog in its context so to say. Pick a Topic by IFRS is a list of categories through the IFRS standards with some subdivisions to the IFRS Blogs. Newest topics is what you think it is. Still haven’t found what you’re looking for…. sounds like a certain Irish band, but it is the tag cloud of the most used IFRS keywords. And then the IFRS Standards, again all IFRS standards, IFRSs, IASs, IFRICs and SICs, sometime this list is faster than the page button above.
The one thing we know, using IFRS Glossary, All Blogs A – Z and the Current IFRS Standards in IFRS – IAS – IFRIC – SIC together with our fully indexed search engine should enable an average IFRS student easy access to a lot, really a lot of IFRS documentation, from journal entry to all the industry specific IFRS knowledge and explanations there are.
But there is room for improvement, the internal linking to IFRS data is on the way but it will take some time to make it complete. On the other hand I do not want a pop-up on almost every IFRS term on your screen when hovering the text.
Introduction to IFRS
The core of International Financial Reporting Standards is the Conceptual Framework for Financial Reporting, although IASB states it is only a tool but also that it is a comprehensive set of concepts for financial reporting. What more assurance do you need to know it is important!
Note: After this shortcut through the Conceptual Framework for Financial Reporting, the current alphabetic list of all blogs on this website is provided. Your Premium Source of Clear IFRS Explanations
The Conceptual Framework for Financial Reporting
The Conceptual Framework serves as a tool for the IASB to develop standards. It does not override the requirements of individual IFRSs. Some companies may use the Framework as a reference for selecting their accounting policies in the absence of specific IFRS requirements.
The Conceptual Framework states that the primary purpose of financial information is to be useful to existing and potential investors, lenders and other creditors when making decisions about the financing of the entity and exercising rights to vote on, or otherwise influence, management’s actions that affect the use of the entity’s economic resources.
Users base their expectations of returns on their assessment of:
- The amount, timing and uncertainty of future net cash inflows to the entity;
- Management’s stewardship of the entity’s resources. Your Premium Source of Clear IFRS Explanations
The Conceptual Framework for Financial Reporting defines the fundamental qualitative characteristics of financial information to be:
- Relevance; and
- Faithful representation
The Framework also describes enhancing qualitative characteristics:
- Comparability Your Premium Source of Clear IFRS Explanations
- Verifiability Your Premium Source of Clear IFRS Explanations
- Timeliness Your Premium Source of Clear IFRS Explanations
- Understandability Your Premium Source of Clear IFRS Explanations
The Conceptual Framework defines the elements of financial statements to be:
- Asset: A present economic resource controlled by the entity as a result of past events which are expected to generate future economic benefits Your Premium Source of Clear IFRS Explanations
- Liability: A present obligation of the entity to transfer an economic resource as a result of past events
- Equity: The residual interest in the assets of the entity after deducting all its liabilities
- Income: increases in economic benefit during an accounting period in the form of inflows or enhancements of assets, or decrease of liabilities that result in increases in equity. However, it does not include the contributions made by the equity participants (for example owners, partners or shareholders).
- Expenses: decreases in assets, or increases in liabilities,that result in decreases in equity. However, these do not include the distributions made to the equity participants.
- Other changes in economic resources and claims: Contributions from holders of equity and distributions to them
An item is recognized in the financial statements when: Your Premium Source of Clear IFRS Explanations
- it is probable future economic benefit will flow to or from an entity.
- the resource can be reliably measured Your Premium Source of Clear IFRS Explanations
In some cases specific standards add additional conditions before recognition is possible or prohibit recognition altogether.
An example is the recognition of internally generated brands, mastheads, publishing titles, customer lists and items similar in substance, for which recognition is prohibited by IAS 38. In addition research and development expenses can only be recognised as an intangible asset if they cross the threshold of being classified as ‘development cost’.
Whilst the standard on provisions, IAS 37, prohibits the recognition of a provision for contingent liabilities, this prohibition is not applicable to the accounting for contingent liabilities in a business combination. In that case the acquirer shall recognise a contingent liability even if it is not probable that an outflow of resources embodying economic benefits will be required.
Elements recognised in financial statements are quantified in monetary terms. This requires the selection of a measurement basis. A measurement basis is an identified feature—for example, historical cost, fair value or fulfilment value—of an item being measured. Applying a measurement basis to an asset or liability creates a measure for that asset or liability and for related income and expenses.
Consideration of the qualitative characteristics of useful financial information and of the cost constraint is likely to result in the selection of different measurement bases for different assets, liabilities, income and expenses. Your Premium Source of Clear IFRS Explanations
A reporting entity communicates information about its assets, liabilities, equity, income and expenses by presenting and disclosing information in its financial statements. Your Premium Source of Clear IFRS Explanations
Effective communication of information in financial statements makes that information more relevant and contributes to a faithful representation of an entity’s assets, liabilities, equity, income and expenses. It also enhances the understandability and comparability of information in financial statements. Effective communication of information in financial statements requires:
- focusing on presentation and disclosure objectives and principles rather than focusing on rules;
- classifying information in a manner that groups similar items and separates dissimilar items; and
- aggregating information in such a way that it is not obscured either by unnecessary detail or by excessive aggregation.
Just as cost constrains other financial reporting decisions, it also constraints decisions about presentation and disclosure. Hence, in making decisions about presentation and disclosure, it is important to consider whether the benefits provided to users of financial statements by presenting or disclosing particular information are likely to justify the costs of providing and using that information.
Concepts of capital maintenance are important as only income earned in excess of amounts needed to maintain capital may be regarded as profit. The Conceptual Framework describes the following concepts of capital maintenance:
- Financial capital maintenance. Under this concept a profit is earned only if the financial amount of the net assets at the end of the period exceeds the financial (or money) amount of net assets at the beginning of the period, after excluding any distributions to, and contributions from owners during the period. Financial capital maintenance can be measured in either nominal monetary units or units of constant purchasing power;
- Physical capital maintenance. Under this concept a profit is earned only if the physical productive capacity (or operating capacity) of the entity (or the resources or funds needed to achieve that capacity) at the end of the period exceeds the physical productive capacity at the beginning of period, after excluding any distributions to, and contributions from owners during the period.
Most entities adopt a financial concept of capital maintenance. However, the Conceptual Framework does not prescribe any model of capital maintenance.
Here is all the blog content grouped along a list of the must read Standards:
Link to the IFRS Foundation
See also: The IFRS Foundation
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