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.
- 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.
- 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.
- 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.
|Parameter of Comparison||IAS||IFRS|
|Stands for||IAS stands for International Accounting Standards.||IFRS stands for International Financial Reporting Standards.|
|Published in||The standards of IAS were published between 1973 and 2001.||The standards of IFRS were published after 2001.|
|Issued by||The standards of IAS were issued by the International Accounting Standards Committee.||The International Accounting Standards Board issued the standards of IFRS.|
|Rules||The 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.|
|Total||The total IAS is 41.||The total IFRS is 9|
|Contradiction||In 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
- 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.
- The IAS came into existence between 1973 and 2001 while on the other hand, the IFRS came into existence after 2001.
- 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.
- 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.
- 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.
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 ♥️
Emma Smith holds an MA degree in English from Irvine Valley College. She has been a Journalist since 2002, writing articles on the English language, Sports, and Law. Read more about me on her bio page.