International Financial Reporting standards (IFRS) are designed as a common global language for business affairs so that company’s account are understandable and comparable across international boundaries. They are the consequences of growing international shareholding and trade and are particularly important for companies that have dealings in several countries.They are progressively replacing the many different national standards. The rules to be followed by accountants to maintain books of accounts which is comparable, understandable, reliable, and relevant as per the users internal or external.
IFRS began attempt to harmonize accounting across the European Union but the value of harmonization quickly made the concept attractive around the world. They are sometimes still called by the original name of International Accounting Standard (IAS). IASs were issued between 1973 and 2001 by the board of the International Accounting Standard Committee (IASC). On April 1, 2001, the new IASB took over from the IASC the responsibility for setting international Accounting Standards. The IASB has continued to develop standards calling the new standards IFRS.
In everyday usage, the term ‘international Financial Reporting Standards’ (IFRS), has both a narrow and a broad meaning.
Narrowly, IFRSs refers to the new numbered series of pronouncements that IASB is issuing series issued by its predecessor, the international Accounting Standards Commitee.
Broadly, IFRSs refers to the entire body of IASB pronouncements including standards and interpretations approved by the IASB and IASs and SIC interpretations approved by the predecessor IASC
Criticisms of IFRS are (1) that they are not being adopted in the US (2) a number of criticisms from France and (3) that IAS 29 Financial Reporting in Hyperinflationary Economies had no positive effect at all during 6 years in Zimbabwe’s hyperinflationary economy. The IASB offered responses to the first two criticisms, but has offered no response to the last criticism while IAS 29 was as of March 2014 being implemented in its original ineffective form in Venezuela and Belarus.