IFRS and IAS

Barry
Barry Registered Posts: 101 Dedicated contributor 🦉
in AAT Level 4 (Level 8 in Scotland)
Can someone tell me why we have IFRS and IAS. Why not just IAS?
Confused:(

Comments

  • Steve Collings
    Steve Collings Registered Posts: 997 Epic contributor 🐘
    Hi Barry

    There is no difference in substance between IAS and IFRS. International standards go back as far as 1973 and were first drawn up by a board of experienced volunteers, International Organisation of Securities Commissions (IOSCO) before a professional board (International Accounting Standards Board) took over.

    The difference is simply timing - those standards issued between 1973 and 2001 are called 'International Accounting Standards' (IAS), whilst those issued after 2001 are referred to as 'Internatiional Financial Reporting Standards' (IFRS).

    As you progress through your studies post-AAT, you might come across 'Interpretations' which are issued to clarify something in a standard, or whether a standard applies to a particular situation. These are known as 'IFRICs' (International Financial Reporting Interpretations Committee) which were formerly known as 'SICs' (Standing Interpretations Committee). However, as is always the case in financial reporting, IFRIC changed its name again this year to the 'IFRS Interpretation Committee'. IFRICs and SICs have the same force as IFRS and the official generic term that encompasses IAS, IFRS, SIC and IFRIC is 'IFRS'.

    Hope that helps you.

    Kind regards
    Steve
  • Barry
    Barry Registered Posts: 101 Dedicated contributor 🦉
    Wow Steve thanks for that. I am going to do ACCA after AAT which I hope to pass after I do my last exam in December. So do we have to know about these interpretations then as cannot even handle the standards.
  • Steve Collings
    Steve Collings Registered Posts: 997 Epic contributor 🐘
    I wouldn't worry about the Interpretations for DFS. When you progress to ACCA the higher level corporate reporting papers will require you to have an awareness of them - particularly P2.

    The thing with the Interpretations is that they do disappear over time as the IASB incorporates the relevant Interpretation into the substantive standard when that standard is revised. For example, SIC 12 which deals with special purpose entities and is an interpretation of IAS 27 'Consolidated and Separate Financial Statements' will disappear into a new IFRS when IAS 27 is replaced in 2011.

    Best wishes
    Steve

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