Question

state the objectives and scope for each of the 45 IFRS standards

Answer 1

Objective of the Preface to IFRS

The objective of the Preface to International Financial Reporting Standards is to set out the International Accounting Standards Board's (IASB's) mission and objectives, the scope of International Financial Reporting Standards (IFRSs), due process for developing IFRSs and Interpretations, and policies on effective dates, format, and language for IFRSs.

IASB's objectives

Under the IFRS Foundation Constitution, the objectives of the IASB are:

1. to develop, in the public interest, a single set of high quality, understandable, enforceable and globally accepted financial reporting standards based upon clearly articulated principles. These standards should require high quality, transparent and comparable information in financial statements and other financial reporting to help investors, other participants in the world’s capital markets and other users of financial information make economic decisions;
2. to promote the use and rigorous application of those standards;
3. in fulfilling the objectives associated with (a) and (b), to take account of, as appropriate, the needs of a range of sizes and types of entities in diverse economic settings; and
4. to promote and facilitate adoption of IFRSs, being the standards and interpretations issued by the IASB, through the convergence of national accounting standards and IFRSs.

Scope of IFRSs

• IASB Standards are known as International Financial Reporting Standards.
• All International Accounting Standards (IASs) and Interpretations issued by the former IASC and SIC continue to be applicable unless and until they are amended or withdrawn.
• IFRSs apply to the general purpose financial statements and other financial reporting by profit-oriented entities – those engaged in commercial, industrial, financial, and similar activities, regardless of their legal form.
• Entities other than profit-oriented business entities may also find IFRSs appropriate.
• General purpose financial statements are intended to meet the common needs of shareholders, creditors, employees, and the public at large for information about an entity's financial position, performance, and cash flows.
• Other financial reporting includes information provided outside financial statements that assists in the interpretation of a complete set of financial statements or improves users' ability to make efficient economic decisions.
• IFRS apply to individual company and consolidated financial statements.
• A complete set of financial statements includes a statement of financial position, a statement of comprehensive income, a statement of cash flows, a statement of changes in equity, a summary of accounting policies, and explanatory notes. When a separate income statement is presented in accordance with IAS 1(2007), it is part of that complete set.
• In developing Standards, IASB intends not to permit choices in accounting treatment. Further, IASB intends to reconsider the choices in existing IASs with a view to reducing the number of those choices.
• IFRS will present fundamental principles in bold face type and other guidance in non-bold type (the 'black-letter'/'grey-letter' distinction). Paragraphs of both types have equal authority.
• The provision of IAS 1 Presentation of Financial Statements that conformity with IAS requires compliance with every applicable IAS and Interpretation requires compliance with all IFRSs as well.