FinLyneDefinition
IFRS is a set of accounting standards developed by the International Accounting Standards Board (IASB) that provides a global framework for financial reporting.
Explanation
IFRS aims to make financial statements comparable across international boundaries. Over 140 countries require or permit IFRS. Key differences from US GAAP include treatment of inventory (no LIFO under IFRS), development costs (can be capitalized), and lease classification. IFRS is principles-based rather than rules-based.
Example
A UK-listed company reports under IFRS 16, recognizing all leases on the balance sheet as right-of-use assets. Under the old standard, operating leases were off-balance-sheet — IFRS 16 brought $2.8T of lease obligations onto balance sheets globally.