IFRS - A Common Language for International Financial Reporting

 As an account manager for an international accounting firm, Herbert Biryomumaisho focuses on tracking the performance of reinsurance companies. Herbert Biryomumaisho has extensive knowledge of the International Financial Reporting Standards (IFRS).

Placed in effect in 2005 in the European Union, the IFRS governs financial statements in 120 countries. The goal of the IFRS is to provide consistently formatted information so accountants in one country can evaluate the finances of companies in another.

Established by the International Accounting Standards Board, the IFRS creates a common accounting language that allows for informed business decisions. It serves as a template for data such as balance sheets, profit and loss statements, cash flow, and changes in equity value. It also mandates open disclosure of accounting practices. It has been found that such transparency encourages investors to place their capital in IFRS-compliant nations.

The United States and Canada do not subscribe to these standards; instead, they use the older Generally Accepted Accounting Principles (GAAP). IFRS proponents claim that global adoption would eliminate the necessity of filing duplicate accounting statements.