IFRS stands for International Financial Reporting Standards, the body of accounting rules that determine how a business recognises, measures and discloses transactions in its financial statements. A simplified version, IFRS for SMEs, applies to smaller entities that do not need the full standard's complexity.
What it means
IFRS sets out, standard by standard, how to account for everything from revenue and leases to financial instruments and employee benefits, so that financial statements prepared under it are comparable across businesses and borders. South African companies generally choose between full IFRS and IFRS for SMEs based on size and public accountability.
Where it fits in
The IFRS standard on employee benefits governs how a business accounts for payroll-related obligations beyond the simple wage expense - leave pay accrued but not taken, and retirement or post-employment benefits a business has committed to.
Key rules
- IFRS = International Financial Reporting Standards.
- Governs recognition, measurement and disclosure in financial statements.
- IFRS for SMEs is a simplified version for smaller entities.
- The employee benefits standard governs leave accrual and retirement obligations.
