The International Financial Reporting Standards (IFRS) are globally recognized accounting guidelines designed to ensure the consistency and transparency of financial statements across different countries. Developed and maintained by the International Accounting Standards Board (IASB), IFRS comprises a set of rules and principles that aim to standardize financial reporting to assist stakeholders, including investors, regulators, and business parties, in making informed decisions.

IFRS is adopted by many countries around the world, making it a vital component of global commerce and trade. For example, IFRS is used to prepare financial statements such as balance sheets and income statements by entities to comply with international financial regulations. The use of standardized accounting principles under IFRS facilitates the comparison of financial data between companies operating across diverse jurisdictions, enhancing transparency and understanding in global markets.

An illustration of the application of IFRS is in the preparation of financial statements for multinational corporations. Under IFRS, these corporations use consistent measurement principles and disclosures to report assets, liabilities, income, and expenses. This approach reduces accounting discrepancies caused by different local standards and benefits users of the financial reports by providing clear and comparable information.