Difference Between IAS and IFRS – IAS vs IFRS
By BYJU'S Exam Prep
Updated on: November 14th, 2023
Difference Between IAS and IFRS: The major difference between IAS and IFRS is their level of comprehensiveness. IAS covers only specific accounting issues, while IFRS is a more comprehensive set of accounting standards that covers all aspects of financial reporting. IAS and IFRS are sets of accounting standards that provide guidelines for financial reporting. IAS consists of a set of 41 accounting standards that are used in various countries around the world.
IAS encompasses various topics, such as the presentation of financial statements, the recognition of revenue, and the valuation of assets. IFRS is also more principles-based, which means that it provides broad guidelines for companies to follow, rather than specific rules. IFRS is widely used by companies around the world as a global standard for financial reporting. In this article, we will explore the difference Between IAS and IFRS in detail.
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Difference Between IAS and IFRS
The most significant difference between IAS and IFRS lies in their respective approaches to accounting and financial reporting. IAS adopts a more rules-based approach, providing specific guidance on how to account for transactions and prepare financial statements.
In contrast, IFRS adopts a more principles-based approach, providing broader guidance on how to apply accounting principles to various transactions and situations. IFRS is a more comprehensive and detailed set of accounting standards that includes all of the IAS standards, as well as additional standards that are specific to certain industries and transactions.
IAS vs IFRS
IAS provides specific rules that must be followed, which can limit the ability of companies to adapt to unique circumstances. IFRS, on the other hand, provides broader principles that allow for more judgment and interpretation, giving companies greater flexibility to apply the standards to their specific circumstances. The difference between IAS and IFRS is given in the table below:
| IAS | IFRS |
| IAS was developed between 1973 to 2003 by the International Accounting Standards Committee (IASC) | IFRS was developed in 2001 by the International Accounting Standards Board (IASB) |
| IAS covers a broad range of topics related to financial reporting | IFRS covers all IAS standards and additional industry-specific standards |
| IAS focuses on general accounting principles | IFRS focuses on covering both general principles and specific requirements for various industries and transactions |
| IAS is less flexible in application, with specific rules | IFRS is more flexible, allowing for judgment and interpretation based on individual circumstances |
| IAS is used by various countries around the world but is less widely accepted than IFRS | IFRS is a widely adopted global standard for financial reporting, used by over 140 countries |
| IAS can result in differences in reported financial information due to differences in the interpretation and application of specific rules | IFRS generally leads to greater consistency and comparability in reported financial information due to broader principles-based guidance |
IAS and IFRS
IAS and IFRS are two sets of accounting standards used worldwide. One of the main differences between the two is that IAS lacks specific guidelines for identifying, measuring, presenting, and disclosing information about non-current assets intended for sale.
IFRS, on the other hand, has new rules about how to handle these types of assets. These rules cover how to identify them, measure their value, show them in financial statements, and disclose information about them.
- IAS and IFRS are both sets of accounting standards designed to provide guidance on how to prepare financial statements.
- IAS was developed by the International Accounting Standards Committee, while IFRS was developed by the International Accounting Standards Board, which replaced the IASC.
- While both standards are used internationally, IFRS has become increasingly popular in recent years as it is designed to be more globally consistent, making it easier for investors to compare financial statements across different companies and countries.
What is IAS?
IAS stands for International Accounting Standards, it is a collection of accounting standards established by the International Accounting Standards Committee (IASC) before being replaced by the International Accounting Standards Board (IASB).
The IAS provided direction on creating financial statements for companies operating in various countries to increase transparency and comparability across national borders. While some of the standards were replaced by International Financial Reporting Standards (IFRS) when the IASB took over, certain countries or industries still utilize some of the IAS standards.
What is IFRS?
IFRS stands for International Financial Reporting Standards, It is a set of accounting standards created and maintained by the International Accounting Standards Board (IASB). These standards serve as the foundation for financial statements prepared by public companies in more than 140 countries.
The main goal of IFRS is to ensure that financial reporting is transparent, dependable, and comparable across various industries and countries, which can facilitate informed decision-making by investors. The standards cover a broad range of financial reporting topics, such as revenue recognition, financial instruments, leases, and other areas.
IAS and IFRS Accounting Standards
IAS Accounting Standards are a set of accounting standards developed by the IASC that provide guidelines for financial reporting by companies across the world. There are 41 IAS accounting standards, which cover various aspects of financial reporting, including;
- IAS 1 – Presentation of financial statements
- IAS 2 – Inventories
- IAS 17 – Accounting for leases
- IAS 18 – Revenue recognition
- IAS 32 and IAS 39 – Financial instruments
- IAS 12 – Accounting for income taxes
- IAS 16 – Property, plant, and equipment
- IAS 38 – Intangible assets
- IAS 19 – Employee benefits
In addition to the IAS standards, there are also International Financial Reporting Standards (IFRS), which were developed by the IASB and are intended to be a global standard for financial reporting. IFRS is a more comprehensive and updated version of the accounting standards compared to IAS.
There are 17 IFRS accounting standards, which cover various aspects of financial reporting, including;
- IFRS 1 – Presentation of financial statements
- IFRS 2 – Share-based Payment
- IFRS 3 – Business Combinations
- IFRS 5 – Non-current Assets
- IFRS 9 – Financial instruments
- IFRS 10 – Consolidated Financial Statements
- IFRS 13 – Fair Value Measurement
- IFRS 15 – Revenue from Contracts with Customers
- IFRS 16 – Accounting for leases
- IFRS 17 – Insurance Contracts
IFRS is used in over 140 countries, including the European Union, Australia, Canada, India, and Japan. While some countries have adopted IFRS in full, others have adopted it partially or use a version that is adapted to local laws and regulations.
Conclusion:
Key Difference Between IAS and IFRS
The key difference between IAS and IFRS is that IAS is the earlier version of the accounting standards, while IFRS is a more up-to-date and widely used version worldwide. IFRS provides more detailed requirements for financial reporting and covers a broader range of accounting issues than IAS.
