International Financial Reporting Standards (IFRS)

IFRS are global accounting standards for financial reporting. The goal is transparency, comparability, and high-quality information for users of financial statements. The standards cover recognition, measurement, presentation, and disclosure.

IFRS are issued by the International Accounting Standards Board (IASB). Oversight is by the IFRS Foundation. Interpretations are issued by the IFRS Interpretations Committee (IFRS IC). The suite includes current IFRS Standards, older International Accounting Standards (IAS), and IFRS IC interpretations.

IFRS apply to general-purpose financial statements. They are used by listed and large entities in many jurisdictions. The United States uses US GAAP instead. Many countries fully adopt or converge with IFRS.

IFRS for SMEs exists for small and medium-sized entities. It is a simplified, self-contained standard intended to reduce reporting burden.

Updates follow a due process. The IASB consults publicly, issues Exposure Drafts, and finalises standards with effective dates and transition rules.

Official resources: https://www.ifrs.org/

Sri Lanka Financial Reporting Standards (SLFRS)

SLFRS are Sri Lanka’s locally issued accounting standards. They are substantially aligned with IFRS. The standards are issued by the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka). Oversight and due process mirror the IFRS model.

Sri Lanka adopted IFRS-based standards from 2012. The local suite has two naming tiers. “SLFRS” corresponds to IFRS. “LKAS” corresponds to IAS. Sri Lanka also issues “SLFRS for SMEs”, based on IFRS for SMEs, for eligible smaller entities.

Where needed, Sri Lanka sets local effective dates and transitional provisions. Local guidance may address jurisdiction-specific matters. The intention is to preserve alignment with IFRS while meeting national requirements.

Compliance with SLFRS is required for entities within Sri Lanka’s financial reporting framework. Auditors express an opinion on compliance with SLFRS and LKAS, or SLFRS for SMEs, as applicable.

Official resources: https://www.casrilanka.com/

Relationship between IFRS and SLFRS

SLFRS is an IFRS-aligned framework. The technical content tracks IFRS, with local branding and, at times, local timing. SLFRS includes LKAS standards that correspond to IAS pronouncements. Interpretations follow the IFRS IC decisions unless CA Sri Lanka issues specific local guidance.

For multinational comparability, SLFRS compliance generally indicates conformity with IFRS in all material respects, unless a published local departure applies. Entities with cross-border listings should confirm any additional reporting obligations.

Governance and Update Cycle

The IASB sets IFRS using a transparent due process. CA Sri Lanka reviews IASB outputs and issues SLFRS and LKAS updates with local effective dates. Entities must monitor amendments, new standards, and interpretations. Disclosure of transition effects is part of good practice.

Terminology and Filing

Financial statements under both frameworks include a statement of financial position, a statement of profit or loss and other comprehensive income, a statement of changes in equity, a statement of cash flows, and notes. Presentation, disclosure, and measurement requirements come from the relevant standards and interpretations.

Quick Summary

IFRS are the global benchmark issued by the IASB. SLFRS are Sri Lanka’s IFRS-aligned standards issued by CA Sri Lanka. SLFRS uses “SLFRS” for IFRS-level standards and “LKAS” for IAS-level standards. An SLFRS for SMEs variant exists. Alignment is close, with local branding and effective dates.