Meaning of 'International Financial Reporting Standards'

General use of the term

In everyday usage, the term 'International Financial Reporting Standards' (IFRSs) has both a narrow and a broad meaning.

Narrowly, IFRSs refers to the new numbered series of pronouncements that the IASB is issuing, as distinct from the International Accounting Standards (IASs) series issued by its predecessor.

More broadly, IFRSs refers to the entire body of IASB pronouncements, including standards and interpretations approved by the IASB and IASs and SIC interpretations approved by the predecessor International Accounting Standards Committee.

IFRSs as defined in Standards

Paragraph 7 of IAS 1 Presentation of Financial Statements defines IFRSs as comprising:

• International Financial Reporting Standards
• International Accounting Standards
• IFRIC Interpretations
• SIC Interpretations

(The definition of IFRSs was amended after the name changes introduced by the revised IFRS Foundation Constitution in 2010.)

Requirements for issuing IFRSs

In developing IFRSs, the IASB follows its due process requirements.

Under the IFRS Foundation Constitution, the publication of an exposure draft, or an IFRS (including an International Accounting Standard or an Interpretation of the Interpretations Committee) requires approval by:

• nine members of the IASB, if there are fewer than sixteen members
• ten members of the IASB, if there are sixteen members.

Other decisions of the IASB, including the publication of a discussion paper, require a simple majority of the members of the IASB present at a meeting that is attended by at least 60 per cent of the members of the IASB, in person or by telecommunications.

Compliance with IFRSs

Paragraph 16 of IAS 1 requires:

An entity whose financial statements comply with IFRSs shall make an explicit and unreserved statement of such compliance in the notes. An entity shall not describe financial statements as complying with IFRSs unless they comply with all the requirements of IFRSs.

When a Standard or an Interpretation specifically applies to a transaction, other event, or condition, the accounting policy or policies applied to that item shall be determined by applying the Standard or Interpretation and considering any relevant Implementation Guidance issued by the IASB for the Standard or Interpretation. [IAS 8.7]