Countries often have their own unique standards for presenting financial information. While accounting standards vary from country to country, International Financial Reporting Standards (IFRS) remain the same, globally. In other words - companies reporting under IFRS will have financial statements that are prepared in a consistent manner, presenting the same core set of information. This consistency is critical, because public companies have investors from around the world, who need to be able to understand the statements in order to make informed investment decisions.
IFRS is a rigorous and complex standard that often requires companies to expend significant resources in order to ensure compliance. This can become unnecessarily costly, especially for smaller, privately-owned companies with few stakeholders. Many countries have thus created their own, simplified versions of the IFRS reporting framework which can be used for privately-owned companies within their jurisdictions. In Canada, for example, we have the Accounting Standards for Private Companies (ASPE). As a rule of thumb, the country-specific reporting standards often follow the same general principles as IFRS, but are simplified.
Below is a table outlining the complete set of financial statements under IFRS, along with the analogous ASPE statements. The differences in the complexity are shown in later articles, when we review how the different elements are measured.
*Indicates primary financial statements
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