IFRS - financial statements according to international law

The International Financial Reporting Standards (IFRS) is a set of regulations companies can use to create their annual financial statements and consolidated financial statements. These standards give companies the advantage of comparing their finances on an international level without having to convert the financial statements of the respective countries into one unified language. We will translate your financial statements quickly and professionally into over 150 languages. Our native speaking translators are familiar with the subject and will translate the economic terminology into the desired target language with pinpoint precision. Contact us and we will advise you individually on your project.

Comparing companies internationally

The IFRS were formed as it became more important for companies to maintain a way of internationally comparing their economic activity in an increasingly global world. Before then, all companies had to abide by their national laws when forming their financial statements. For example, Germany stayed within the framework of the German Commercial Code when creating balance sheets and income statements. However, in order to compare themselves with international competitors, companies had to follow complicated procedures to convert foreign financial statements into their own form. In order to get rid of this process, the International Accounting Standards Board adopted the IFRS. All companies that formed their financial statements in accordance with the IFRS could now easily compare themselves with international competitors.

IFRS reporting standards are not for everyone

Upon adopting the IFRS, the European Parliament decided not to make these international guidelines obligatory for all companies, but to leave that decision up to the countries. Long story short, not all companies have to form financial statements in accordance with the IFRS. In these cases, the German Commercial Code remains mandatory, but companies can still opt to create additional statements in line with the IFRS. For corporations, the decision regarding IFRS obligation has to do with whether or not the corporation is publicly traded. Corporations oriented in the capital market are obligated to prepare a final statement in accordance with the IFRS, while other corporations may choose to do this. If a German corporation produces a statement in line with the IFRS, then a German Commercial Code bound statement is no longer necessary.