IFRS.

In plain English

IFRS, International Financial Reporting Standards, is the body of accounting standards issued by the IFRS Foundation and required or permitted in much of the world outside the United States. It answers the same questions GAAP answers: when revenue is earned, how assets are valued, what must be disclosed. IFRS leans principles-based, setting broad requirements and leaving more room for judgment, while U.S. GAAP carries more detailed rules for specific situations. That difference shows up in areas like inventory costing and asset revaluation, where the two systems can produce different numbers from identical facts. A company listed in two countries may publish one set of statements under each system.

01Why it matters

If you compare a U.S. company with a European or Asian competitor, part of the difference in reported profit can come from the rulebook rather than the business, and knowing that keeps you from reading a gap that is not there.

02The math, step by step

Say two identical retailers each hold inventory that cost 1,000,000 dollars and is now worth 1,300,000 dollars. Neither writes it up under normal inventory rules. But if the same 300,000 dollar gain sat in revalued property, an IFRS filer could show it in equity while a U.S. filer, held to historical cost, could not.

Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.

03What this is NOT

04Receipts

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