Difference Between IAS and IFRS
Accounting standards issued by the IASB (International Accounting Standards Board) are known as International Accounting Standards. Companies that are locally listed, as well as those that are not, are under obligation to use their financial statements in the countries that have accepted those standards.
Historically, the International Accounting Standards started in the mid-1960′s, more precisely, in 1966, with an initial proposal to enact the ICAEW, AICPA and the CICA for England and Wales, US and Canada respectively. Consequently, the Accounts International Study Group was founded in the following year, 1967, which aggressively championed for change by publishing papers on topics with great significance. As a result of these papers, the way was paved for the standards that were to come, and in 1973, an agreement was reached to establish an international body with the sole purpose of writing accounting standards to be used internationally.
In mid 1973, the IASC (International Accounting Standards Committee) was established; mandated with releasing new international standards, which would be rapidly accepted and implemented worldwide. The ISAC lasted 27 years until the year 2001, when it was restructured to become the International Accounting Standards Board (IASB).
A series of accounting standards, known as the International Accounting Standards, were released by the IASC between 1973 and 2000, and were ordered numerically. The series started with IAS 1, and concluded with the IAS 41, in December 2000. At the time when the IASB was established, they agreed to adopt the set of standards that were issued by the IASC, i.e. the IAS 1 to 41, but that any standards to be published after that would follow a series known as the International Financial Reporting Standards (IFRS).
The question of the differences between the IAS and IFRS has arisen on a number of occasions in accounting circles, and in fact, some would question if there is any difference at all. One of the major differences is that the series of standards in the IAS were published by the International Accounting Standards Committee (IASC) between 1973 and 2001, whereas, the standards for the IFRS were published by the International Accounting Standards Board (IASB), starting from 2001. When the IASB was established in 2001, it was agreed to adopt all IAS standards, and name future standards as IFRS. One major implication worth noting, is that any principles within IFRS that may be contradictory, will definitely supersede those of the IAS. Basically, when contradictory standards are issued, older ones are usually disregarded.
IAS stands for International Accounting Standards, while IFRS refers to International Financial Reporting Standards.
IAS standards were published between 1973 and 2001, while IFRS standards were published from 2001 onwards.
IAS standards were issued by the IASC, while the IFRS are issued by the IASB, which succeeded the IASC.
Principles of the IFRS take precedence if there’s contradiction with those of the IAS, and this results in the IAS principles being dropped.
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