IFRS — International Financial Reporting Standards — is the body of accounting rules issued by the International Accounting Standards Board (IASB). It defines how revenue is recognized, how leases are accounted for, how assets are measured, how subsidiaries are consolidated, and dozens of other decisions that determine what financial statements actually say.
More than 140 countries have adopted IFRS or a national equivalent. Egypt adopted Egyptian Accounting Standards (EAS) that are substantially aligned with IFRS, with limited local divergences. The UAE, Saudi Arabia, Kuwait, Bahrain, Oman, and Qatar require IFRS for listed companies and most regulated entities.
Why IFRS matters: it is the common language of international finance. When a company in Cairo seeks investment from a fund in London, financing from a bank in Dubai, or an exit to a strategic acquirer in Riyadh, the buyer or lender wants financial statements they can compare directly to their other investments. IFRS makes that possible.
The standards cover a wide surface. IFRS 15 governs revenue recognition — what counts as revenue, when it is recognized, how it is allocated to performance obligations. IFRS 16 reshaped lease accounting — most operating leases are now on the balance sheet. IFRS 9 covers financial instruments and expected credit losses. IFRS 10 governs consolidation. IFRS 13 defines fair value measurement. New standards and amendments are issued regularly.
Implementing IFRS correctly is more demanding than implementing local-only standards. The judgments are sharper (fair value, impairment, going concern), the disclosure requirements are extensive, and standards interact in non-obvious ways. Egyptian SMEs preparing IFRS financial statements for the first time — typically because a lender or investor has asked — usually need outside help. The first-year conversion can require restating multiple prior periods, recognizing previously off-balance-sheet items, and rewriting accounting policies from scratch.