This is the question that oftentimes pops up from a middle of nowhere…
What basically are the differences between the International Financial Accounting Standards (IFRS) and International Accounting Standards (IAS)? Or, should we rephrase the question, are there any differences at all?
Well, there are differences, of course. And the major difference is that the IAS’s were issued by the International Accounting Standards Committee (IASC) from 1973 to 2001, while the IFRS’s were issued by the International Accounting Standards Board (IASB) from 2001 onwards. The IASB is basically the successor for IASC.
When IASB was installed in 2001, it adopted the existing IAS and decided to name any future standards as International Financial Reporting Standards. Consequently, IAS 1 Presentation of Financial Statements defines IFRS as standards and interpretations adopted by the IASB.
Now, IFRS in a broad sense comprise:
- Framework for the Preparation and Presentation of Financial Statements – stating basic principles and grounds of IFRS
- International Financial Reporting Standards (standards issued after 2001)
- International Accounting Standards (standards issued before 2001)
- Interpretations originated by the International Financial Reporting Interpretations Committee (IFRIC) or the former Standing Interpretations Committee (SIC)
In My Humble Opinion (IMHO)
I have to be explicit that these are just my opinions. If you trust it, then thank you. If not, then make your own research! (LOL!)
So the new IFRSs standards are in addition to (on top of) the IASs, won’t there be any contradicting standards/principles between the two as a result of the adoption of IFRS?
Just as the former IASC altered some of its provisions and withdres some IAS numbers from its set of standards over the years, any contradicting principles from the new IFRS will supersede that of IAS. One basic example is the IFRS 3 and IAS 22, which are both titled, “Business Combinations”.
Of course, there are standards in the IFRS that provide rule over some grey areas or a “no mention” in the IAS, just like the identification, measurement, presentation and disclosure of non-current assets held for sale (IFRS 5).
In fact, when contradicting standards are issued, the older one is removed from the complete set of standards. Look at the latest complete list of standards and IAS 22 is not there anymore.
I have been full compliant with IAS in the previous years, do I still have to apply IFRS 1 (First Time Adoption of IFRS), and thus present comparative information and other disclosures required by IFRS 1 in my next financial statements?
Under the Scope of the standard, paragraph 3, if you have not stated compliance with IFRS in an “explicit” and “unreserved” statement in any of your previous financial statements, then you have to comply with and follow the disclosure requirements of IFRS 1. If you have been full compliant with IAS, then preparing the disclosure requirements of IFRS 1 would not be that cumbersome.
Try googling for the difference between IFRS and IAS, and it will lead you nowhere. I mean, basically there are no resources in the internet that can give you a precise distinction between the two. Such question just seems like improper. It’s like comparing a chicken against an egg, when in fact the former just simply evolved from the latter. You can’t plainly make a head-to-head comparison.
Remember, comparing IFRS vs. IAS is not like comparing IFRS vs. US GAAP. The latter is completely a different story.