IAS vs IFRS
As IAS and IFRS are standards in the accounting practice that one adheres to in financial reporting, it is important to know the difference between IAS and IFRS. There was a need in the 1960’s to standardize accounting processes and reporting in order for practically anyone to understand the financial statements of a company, as well as to stop any misrepresentation by companies in their financial statements. Thus, the IAS was born. IFRS is the current standards that govern the financial reporting internationally.
What is IAS?
IAS, better known as the International Accounting Standards, was a set of standards that dictate how a particular transaction or event should be reflected in the financial statements. The International Accounting Standards Committee (IASC) has been issuing these standards from 1973 until 2001. In 2001, the IASB took over IASC’s responsibility in setting the standards. From 1973 to 2001 there were 41 IAS issued.
What is IFRS?
When the International Accounting Standards Board (IASB) took over IASC’s responsibilities in 2001, they decided to adopt the existing standards, though there were some that needed revisions. These future standards were decided to be referred as the International Financial Reporting Standards (IFRS). This change was precipitated by the need to update and refine the current concepts and standards to reflect the changes in the markets, common business practices and the economic environment.
What is the difference between IAS and IFRS?
So how is IAS and IFRS different? Well, technically they are the same. IFRS is the current set of standards that is reflective of the changes in the accounting and business practices over the last two decades. IAS is what used to be prior to the introduction of IFRS. However, not all of the IAS are outdated. In fact, to date there are only 9 IFRS issued and the IAS that were not superseded by the IFRS are still in use. The IASB no longer issues IAS. Any future standards will now be called IFRS, and if they are contradictory to existing IAS, the IFRS will be followed.
IAS vs IFRS
• The International Accounting Standards or in short IAS are standards issued by the IASC from 1973 to 2001 that dictate how events and transactions should reflect on a company’s financial statements.
• The International Financial Reporting Standards or in short IFRS is the current and updated version of the IAS and is issued by a new standard making body, the IASB.
• If there are any contradictions in the IFRS with the old IAS, the IFRS should be followed.