what are international financial reporting standards ifrs 
international financial reporting standards ifrs are a set of accounting rules for the financial statements of public companies that are intended to make them consistent transparent and easily comparable around the world ifrs currently has complete profiles for 168 jurisdictions including those in the european union the united states uses a different system the generally accepted accounting principles gaap 1the ifrs is issued by the international accounting standards board iasb the ifrs system is sometimes confused with the international accounting standards ias which are the older standards that the ifrs replaced in 2001 2investopedia paige mclaughlinunderstanding international financial reporting standards ifrs ifrs specify in detail how companies must maintain their records and report their expenses and income they were established to create a common accounting language that could be understood globally by investors auditors government regulators and other interested parties the standards are designed to bring consistency to accounting language practices and statements and to help businesses and investors make educated financial analyses and decisions they were developed by the international accounting standards board which is part of the not for profit london based ifrs foundation the foundation says it sets the standards to bring transparency accountability and efficiency to financial markets around the world 3ifrs vs gaappublic companies in the u s are required to use a rival system the generally accepted accounting principles gaap the gaap standards were developed by the financial standards accounting board fsab and the governmental accounting standards board gasb the securities and exchange commission sec has said it won t switch to international financial reporting standards but will continue reviewing a proposal to allow ifrs information to supplement u s financial filings 4there are differences between ifrs and gaap reporting for example ifrs is not as strict in defining revenue and allows companies to report revenue sooner a balance sheet using this system might show a higher stream of revenue than a gaap version of the same balance sheet ifrs also has different requirements for reporting expenses for example if a company is spending money on development or on investment for the future it doesn t necessarily have to be reported as an expense it can be capitalized instead standard ifrs requirementsifrs covers a wide range of accounting activities there are certain aspects of business practice for which ifrs set mandatory rules in addition to these basic reports a company must give a summary of its accounting policies the full report is often seen side by side with the previous report to show the changes in profit and loss 6a parent company must create separate account reports for each of its subsidiary companies chinese companies do not use ifrs or gaap they use chinese accounting standards for business enterprises asbes 7history of ifrsifrs originated in the european union with the intention of making business affairs and accounts accessible across the continent it was quickly adopted as a common accounting language although the u s and some other countries don t use ifrs currently 168 jurisdictions do making ifrs the most used set of standards globally 1who uses ifrs ifrs is required to be used by public companies based in 168 jurisdictions including all of the nations in the european union as well as canada india russia south korea south africa and chile the u s and china each have their own systems 1