International Financial Reporting Standards (IFRS)

What are the International Financial Reporting Standards (IFRS)?

The International Financial Reporting Standards (IFRS) are a set of accounting rules for the financial statements of public companies that are intended to make reporting consistent, transparent, and easily comparable around the world.

IFRS specifies in detail how companies must maintain their records and report their expenses and income. These standards were established to create a common accounting language that could be understood globally by investors, auditors, government regulators, and other interested parties.

They were developed by the International Accounting Standards Board (IASB), which is part of the not-for-profit, London-based IFRS Foundation. The Foundation states that the standards were set to “bring transparency, accountability, and efficiency to financial markets around the world”.

What is the purpose of the International Financial Reporting Standards?  

IFRS ensures that all entities follow standardized accounting rules, which enables financial statements to maintain consistency, reliability, and comparability across businesses globally. 

Why are the International Financial Reporting Standards (IFRS) important?

These standards promote transparency by making sure reporting rules and the quality of financial information are consistent in all adherent countries. With a set of standards, there is greater accountability by reducing the information gap between the providers of capital. IFRS Standards also contribute to economic efficiency by helping investors identify opportunities and risks, which improves capital allocation.

These reporting standards minimize the margin of error and manipulation of any holding and irregularities of funds, transactions, and balances.

IFRS covers a wide range of accounting activities and sets mandatory rules. More than 160 countries, including all the nations in the European Union, are required to use these standards in their reporting.

How does Clearwater Analytics help?

Clearwater Analytics supports any accounting basis including IFRS, GAAP, Statutory, Tax, and others. The system has 15+ audited accounting bases available and can support Nth accounting bases. With our intuitive and user-friendly platform, users can easily customize disclosure reports and other standard balance sheets, income statements, and roll-forward reports.

The IFRS 9 regulations were issued in November of 2009 and are to be fully adopted and as of January 2023, IFRS 9 and IFRS 17 are important to insurance companies reporting.

Clearwater has developed an effective approach to help clients seamlessly migrate to the IFRS 9 accounting standard. Clearwater’s clients can work with their dedicated client services team to develop a plan for comparatives and initial classification and measurements, the two steps to adopting IFRS 9. Clearwater’s solution is equipped with the data management and reporting tools needed to successfully adopt IFRS 9 and offers the flexibility to choose options that are right for your firm.

With Clearwater, you can group data on multiple levels, write formulas, pivot, and add or remove data points. Accounting information can be pulled into varying types of reports and tied to risk and performance information, allowing for a complete picture of your investments.

Learn more about how Clearwater Analytics can help with investment accounting and reporting by scheduling time to speak directly to an expert.

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