Financial statements prepared on international standards have a specific format in which they must follow so that the users of them may be able to easily understand and compare them. This IAS discusses what each financial statement is, what is included in it, as well as specific rules as to what may and may not be done within them. This is important so that shareholders may be able to read varying financial statements and have one uniform standard for how to interpret the data.
IAS are principles based standards, rather than strict rules based standards that govern international accounting. IAS standards differ from IFRS standards in that they were introduced prior to 2001, whereas IFRS were produced after this date by the IASB, or the International Accounting Standards Board. When determining the hierarchy of these, the IAS is considered to be the building blocks in which newer and more relevant IFRS are founded and therefore IFRS is more authoritative when these conflict.
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