IFRS 7 – Financial Instruments: Disclosures
Overview IFRS 7 Financial Instruments: Disclosures require a business to disclose information on the financial instruments’ relevance to the entity and the type and extent of the risks associated with those financial instruments, both qualitatively and quantitatively. The main objective of IFRS 7 is to provide users of financial statements with relevant and reliable information […]
IFRS 6 – Exploration for and Evaluation of Mineral Resources
IFRS 6 outlines the accounting treatment for the mineral resource exploration and evaluation, for mining, oil, and gas companies to recognize related expenses. The standard permits entities to use their current accounting policies temporarily while establishing principles for treating exploration costs as assets or expenses. It is important for natural resources companies to understand IFRS […]
IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations
IFRS 5 offers guidance on the classification, measurement, and disclosure of non-current assets held for sale and discontinued operations. The standard ensures that assets to be sold are disclosed separately in financial reports and measured at the lower of their carrying amount or fair value less costs to sell. Moreover, IFRS 5 also prescribes detailed […]
IFRS 4 – Insurance Contracts, Scope and Applicability
Overview IFRS 4 is the IASB’s first advice on insurance contract accounting – but not the last. A detailed study of insurance contracts is now being conducted. Scope and Applicability The main objective of IFRS 4 is to provide a consistent framework for recognising and measuring insurance contracts. This is important because entities would account […]
IFRS 3 – Business Combinations, Scope and Disclosure Requirements
Overview IFRS 3 Business Combinations describes how an acquirer accounts for the purchase of control of a business (e.g. an acquisition or merger). These business combinations are accounted for using the ‘acquisition method,’ which usually requires the purchase of assets and the assumption of liabilities to be valued at their fair values at the acquisition […]
IFRS 2 – Share-Based Payment | Meaning and Scope
IFRS 2 is a standard issued by the International Accounting Standards Board (IASB) that provides guidance on the accounting treatment for share-based payments. Share-based payments are a common form of employee compensation, particularly in high-growth industries such as technology. Share-based payments can take various forms, such as stock options, restricted stock units, or performance shares. […]
IFRS 1 — First-time Adoption of IFRSs
IFRS 1 First time Adoption of International Financial Reporting Standards sets out the processes that a company must take when it adopts IFRSs for the first time as the foundation for compiling its general purpose financial statements. The IFRS offers certain exemptions from the general obligation to comply with each IFRS effective at the conclusion […]
IFRS Accounting for Revenue Recognition and Long-Term Contracts
Revenue recognition is a crucial aspect of financial reporting, as it provides stakeholders with insights into a company’s financial performance. To ensure transparency and comparability, companies need to comply with globally recognized accounting standards, such as the International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP). In this blog post, we will discuss […]
The Pros and Cons of Adopting IFRS
International Financial Reporting Standards (IFRS) is a set of accounting standards developed by the International Accounting Standards Board. IFRS has been adopted by more than 12,000 organisations in over 100 countries and is becoming the global standard for preparing financial statements of public companies throughout the world. However, GAAP (General Accepted Accounting Principles) is applied […]
GAAP and IFRS: Effects of Globalization
Globalisation has considerably influenced the way accounting is being practised worldwide. The reason for this is that laws are diverse throughout every country. U.S. accountants are required to follow the Generally Accepted Accounting Principles (GAAP). Worldwide, there are currently over 115 countries using the International Financial Reporting Standards. Accountants understand that global businesses will profit […]