Short definition: IFRS, or International Financial Reporting Standards, is a set of accounting standards developed by the International Accounting Standards Board (IASB) that govern the preparation and presentation of financial statements.
Explanation: IFRS aims to provide a globally consistent framework for financial reporting, enabling investors and other stakeholders to compare and understand the financial performance of companies across different countries. It covers a wide range of accounting topics, including revenue recognition, asset valuation, and disclosure requirements.
Example: Under IFRS, companies are required to use fair value accounting for certain financial instruments, which reflects their current market value rather than their historical cost.
Additional information (optional): IFRS is adopted by over 140 countries around the world, making it the dominant accounting standard for global businesses. While there are some differences between IFRS and US GAAP (Generally Accepted Accounting Principles), efforts are underway to converge the two sets of standards.