What is the purpose of IFRS?

The purpose of IFRS (International Financial Reporting Standards) is to provide a set of accounting standards developed by the International Accounting Standards Board (IASB). These standards are designed to create a common financial reporting language, making it easier for companies and investors worldwide to understand and compare financial statements. By having a consistent set of accounting principles, IFRS enhances transparency and accountability in financial reporting across different countries, which is essential for investors and stakeholders who operate in an increasingly globalized economy. This standardization helps reduce the discrepancies that can arise when different countries apply varying accounting practices, thereby facilitating international trade and investment.