International Financial Reporting Standards (IFRS)

IFRS are issued by the International Accounting Standards Board (IASB). They are required or permitted for listed companies in many jurisdictions, including the European Union, the United Kingdom, Australia, Canada and many countries in Asia, Africa and Latin America. The United States uses its own framework, US GAAP.

The goal of IFRS is a common financial language across borders. An investor comparing a German car maker with a Korean one can be more confident that the figures were prepared on a similar basis.

IFRS are often described as more principles-based than US GAAP. They set out broad principles and expect companies to apply judgment, while US GAAP has historically included more detailed rules for specific situations. In practice, the two frameworks have moved closer together over the years.

IFRS also use some different names. For example, the balance sheet is formally called the statement of financial position, and the income statement is part of the statement of profit or loss and other comprehensive income.