IFRS are standards and principles that are used in the preparation of financial statements set by the International Accounting Standards Board in 2001. The IFRS uses the principle of the Accrual basis. It recognizes transactions when they occur, not when funds are received or paid out for the transaction. The Going concern which assumes that an organization will continue operations in the future, is also recognized. The IFRS states that financial statements should consist of a Balance Sheet, Income Statement and the Cash Flow Statement.
The International Financial Reporting Standards has been adopted in more than 100 countries including the European Union by public companies.
Some of the International Financial Reporting Standards are:
IFRS 1: First-time Adoption of International Financial Reporting Standards. It outlines the procedures that a company must follow the first time it adopts to IFRSs to prepare financial statements.
IFRS 2: Share-based Payment. This is used when an entity acquires or receives goods and services for equity based payment.
IFRS 3: Business Combinations. It is a revised IFRS 3 was published by the IASB on 10 January 2008 and will only be effective for business combinations from 1 July 2009.
IFRS 4: Insurance Contracts. It applies to all insurance contracts that a company issues and reinsurance contracts that the company holds.
IFRS 5: Non-current Assets Held for Sale and Discontinued Operations. This replaces IAS 35-Discontinuing Operations and requires the total amount for discontinued operations to be displayed on the income statement.
IFRS 6: Exploration for and evaluation of Mineral Resources
IFRS 7: Financial Instruments: Disclosures. It replaces the disclosures that were required by IAS 30. The IFRS 7 requires a company to group its financial instruments into classes using the similarity of the instruments. The two main categories required by the IFRs 7 are information about the significance of financial statements and information about the nature and extent of risks arising from financial instruments.
IFRS 8: Operating Segments. It has been effective since 1 January 2009. This applies to the individual financial statements of a company whose debt or equity are traded in a public market. Please note that it is only used on a annual basis.