IAS vs IFRS: Difference and Comparison

All government bodies issue certain accounting standards or accounting systems for all companies. These contain the rules, regulations, obligations, and company guidelines. This makes it easier for the companies as they know how to record and present their finances and statements.

It also tells them how to record other things like inventories and depreciation. All companies, irrespective of their size, are obliged to abide by the standards issued by the International Accounting Standards Board (IASB).

The accounting standards set by the IASB are termed International Accounting Standards (IAS). All companies are supposed to use these financial statements if their country has accepted those standards. 

Talking about IAS and IFRS, both of these are the same things but have different meanings. IAS comprises certain old accounting standards, whereas IFRS comprises newer accounting standards.

Key Takeaways

  1. IAS (International Accounting Standards) is a set of accounting standards developed by the International Accounting Standards Committee (IASC) from 1973 to 2001; IFRS (International Financial Reporting Standards) is a set of accounting standards developed by the International Accounting Standards Board (IASB) from 2001 to present.
  2. IAS and IFRS are designed to promote consistency and transparency in financial reporting; IFRS builds on and supersedes IAS as a more comprehensive and globally accepted set of standards.
  3. IAS and IFRS have different adoption timelines and requirements in various countries; IFRS has been adopted by over 140 countries and is becoming increasingly widespread as a global financial reporting standard.

IAS vs. IFRS

 IAS are the rules designed to identify transparency of transactions in the finance department of different organizations. They build trust and keep the record efficient. IFRS are advanced rules that check non-current assets, and financial reports are made on these rules.

IAS vs IFRS

Comparison Table

Parameter of Comparison IASIFRS
Stands forIAS stands for International Accounting Standards. IFRS stands for International Financial Reporting Standards.
Published inThe standards of IAS were published between 1973 and 2001. The standards of IFRS were published after 2001.
Issued byThe standards of IAS were issued by the International Accounting Standards Committee.The International Accounting Standards Board issued the standards of IFRS.
RulesThe IAS does not contain rules regarding identifying, measuring, presenting, and disclosing all non-current assets for sale.The IFRS is new and contains rules regarding identifying, measuring, presenting, and disclosing all non-current assets for sale.
TotalThe total IAS is 41.The total IFRS is 9
ContradictionIn cases of contradiction, the principles of IAS are dropped. In case of a contradiction, the principles of IFRS are considered. 

What is IAS?

IAS stands for International Accounting Standards. These standards have been set for a long time. They help a business to understand how specific transactions should be put in a financial statement. These accounting standards have been in practice since 1973.

These are older standards. These have been set by an independent international standard-setting body based in London called the International Accounting Standards Board (IASB).

The main goal of setting these standards was to make it simpler to compare one’s business with other businesses all across the globe. The other goal of setting these standards was to increase transparency, build trust, and strengthen global trade and investment scope.

With the help of these standards, it is easier to build trust for a company in terms of financial reporting and accuracy. It helps to build accountability and efficiency in the financial market.

With the help of these standards, all investors or any other participants can make well-informed financial decisions. They can make better investment decisions.

It also gives an idea to analyze the risks and thus helps in the better allotment of capital. It also reduces any reporting costs for businesses that operate in various countries. 

In 2001 a newer set of standards came into existence. These standards have replaced the IAS. All organizations now refer to the International Financial Reporting Standards for their business.

What is IFRS?

IFRS stands for  International Financial Reporting Standards. These standards are rules and regulations set up to help businesses in their financial statements.

These standards make it easier for a firm’s financial statements to be transparent, consistent, and easily comparable throughout the globe. These standards have been issued by the International Accounting Standards Board (IASB).

They have been used since 2001 and are still commonly used. They help a business to understand how to keep their accounts and the proper manner of reporting them. These also help to define the various types of transactions, whichever have any financial impact. 

These IAS was revised in 2001 and were changed into IFRS so that an easier and more common accounting language could be set up for all businesses in various countries.

Because of these standards, all the financial statements of the various businesses in various countries are consistent and reliable

Main Differences Between IAS and IFRS

  1. The full form of IAS is International Accounting Standard, while on the other hand, the full form of IFRS is the International Financial Reporting Standards.
  2. The IAS came into existence between 1973 and 2001 while on the other hand, the IFRS came into existence after 2001.
  3. The International Accounting Standards Committee publishes the IAS standards while on the other hand, the IFRS standards are published by the International Accounting Standards Board.
  4. In case of any contradictions, the standards of the IAS are not taken into consideration. They are dropped, while on the other hand, in case of any contractions, the principles of IFRS are considered since they are newer.
  5. The IAS principles do not have rules to identify, measure, present, and disclose all non-current assets for sale. On the other hand, the IFRS principles contain all the rules to identify, measure, present, and disclose all non-current assets for sale.
Difference Between X and Y 2023 04 18T093741.968
References
  1. https://www.sciencedirect.com/science/article/pii/S0278425408000926
  2. https://www.sciencedirect.com/science/article/pii/S1755309113000300

Last Updated : 14 October, 2023

dot 1
One request?

I’ve put so much effort writing this blog post to provide value to you. It’ll be very helpful for me, if you consider sharing it on social media or with your friends/family. SHARING IS ♥️

21 thoughts on “IAS vs IFRS: Difference and Comparison”

  1. The article provides a comprehensive insight into the development, significance, and applicability of IAS and IFRS, thereby emphasizing the value of adhering to these standards.

    Reply
    • The detailed comparison and historical perspective on IAS and IFRS serve as a testament to their critical role in enhancing financial transparency and trust.

      Reply
  2. The functionalities and impact of IAS and IFRS are well-explained in this article, emphasizing the importance of adhering to these standards.

    Reply
    • The article effectively underscores the necessity of implementing these standards to ensure consistency and comparability in financial statements worldwide.

      Reply
    • The importance of these standards cannot be overstated; they are instrumental in strengthening the global trade and investment scope.

      Reply
  3. The transition from IAS to IFRS reflects the evolution of accounting standards and their increasing relevance in the global financial landscape.

    Reply
    • The evolution of these standards has significantly contributed to the transparency and reliability of financial reporting, benefiting all stakeholders.

      Reply
  4. This article provides a comprehensive comparison between IAS and IFRS. The implementation of these standards is crucial for businesses.

    Reply
  5. The article is well-structured and informative, elucidating the importance of IAS and IFRS in the context of financial reporting and global business operations.

    Reply
    • The in-depth analysis underscores the pivotal role of these standards in promoting consistency and reliability in financial reporting on a global scale.

      Reply
  6. The detailed comparison between IAS and IFRS has highlighted the pivotal role of these standards in promoting consistency and transparency in financial reporting.

    Reply
    • These standards are vital for the efficiency, accountability, and accuracy of financial reporting, ultimately benefiting investors and businesses alike.

      Reply
  7. The information provided here is insightful and highlights the significance of IAS and IFRS in the financial market.

    Reply
    • The comparative analysis of IAS and IFRS emphasized the extensive impact of these standards on businesses and financial markets globally.

      Reply
  8. The presented comparison and explanation of IAS and IFRS are informative and serve as a testament to the significance of these standards in the financial market.

    Reply
    • The article effectively conveys the importance and relevance of IAS and IFRS in the ever-changing landscape of global finance and accounting practices.

      Reply
    • The extensive information provided in this article elucidates the transformative impact of IAS and IFRS in the realm of global financial reporting.

      Reply

Leave a Comment

Want to save this article for later? Click the heart in the bottom right corner to save to your own articles box!