IFRS (International Financial Reporting Standards)

Description

Overview

Currently, IFRS consists of two principles-based standards, IAS 18 Revenue and IAS 11 (Construction Contracts) and three IFRS Interpretations. These were criticised for failing to provide adequate guidance on application - they have been described as 'vague and inconsistent'. The IASB and the US Financial Accounting Standards Board (FASB) collaborated on a project to develop improved, converged standards for revenue recognition. Preparers must develop a policy for measuring the amount and timing for recognising revenue for goods and services. Revenue is a key performance indicator that drives the recognition of expenses and profits and the valuation of an entity.