We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Are the Different Types of IFRS Regulations?

By Osmand Vitez
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

International financial reporting standards (IFRS) represent a set of guidelines and principles a company may follow. In order to follow IFRS properly, companies must use specific regulations — often called assumptions — inherent in IFRS. The four standard IFRS regulations include accrual basis, going concern, stable measuring unit, and units of constant purchasing power. Companies must at least adhere to these IFRS requirements in order to use these principles effectively for their financial operations. Failure to adhere to these IFRS requirements can result in improperly prepared financial statements that do not meet audit or other requirements.

Accrual basis represents an accounting method where a company records transactions as they occur rather than when cash changes hands. IFRS regulations desire accrual basis accounting as this method typically provides the best record for accounting information. Most other national accounting standards desire accrual basis accounting as well, so this transition is not difficult for most companies. Companies may be able to get a reprieve from this requirement if they use a hybrid accounting method.

IFRS regulations also have a going concern clause as part of the basic assumptions in these national and international accounting standards. This requirement means a company will be in business for the foreseeable future. This IFRS regulation can be difficult to ascertain for an outside entity, especially if a company fudges numbers and is not honest with outside accountants. Outside accountants must review information and make a determination if a company is a going concern. If not, the accountants may need to make a statement that indicates their perception of the company’s inability to continue.

As IFRS is an international set of accounting standards, there are IFRS regulations that a stable measuring unit exists in a country. This requirement usually relates to inflation as some international countries may have more inflationary problems than others. IFRS has specific guidelines for inflation and deflation and how a company should handle these issues with business transactions. This also has strict application in cost accounting practices.

Units of constant purchasing power are also closely related to the previous IFRS regulations. A company needs to have a specific monetary unit in which they record and display transactions. Again, as IFRS is an international set of accounting standards, companies with multiple operations in several countries may need to consider units of constant purchasing power. Consolidated financial reporting may be the area where this standard is most important for these large companies.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Link to Sources
Discussion Comments
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.