Term · Accounting & Data Quality
IFRS
In briefIFRS are the internationally uniform accounting standards and are mandatory for the consolidated financial statements of capital-market-oriented EU companies. They shape how items such as goodwill, impairment or deferred taxes are to be read in the accounts of European small caps.
Definition
International Financial Reporting Standards; international accounting standards, mandatory for the consolidated financial statements of capital-market-oriented companies in the EU.
How it is calculated
Formula. Not a metric – an accounting framework.
Why it matters for small caps
It determines how metrics such as goodwill, impairment or deferred taxes are to be read in the accounts of European small caps.
Common misreadings
- It is wrongly assumed to be a globally uniform standard, whereas the US, for example, largely uses US-GAAP.
In the process
Frequently asked
What are IFRS?
They are the International Financial Reporting Standards, an international framework for group accounting. In the EU they are mandatory for listed groups.
Why are IFRS important for investors?
They determine how key balance-sheet items are recognised and measured. In doing so they shape the comparability of metrics across companies.
Are IFRS uniform worldwide?
No, that is a common misconception. The US mostly uses US-GAAP, so international comparisons call for additional caution.
Related terms
Sources
Primary
IFRS Foundation – IFRS Accounting Standards Navigator
https://www.ifrs.org/issued-standards/list-of-standards/
https://www.ifrs.org/issued-standards/list-of-standards/
Education only, not investment advice. Ranges and thresholds are didactic orientation values, not an official standard.