Similarities and differences

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A comparison of International Financial Reporting Standards (IFRS) and local GAAP for investment funds

IFRS has been successfully adopted in almost 100 places over the last few years. The International Accounting Standards (IAS) Regulation issued by the European Union in 2002 requires that listed companies in Europe adopt IFRS in 2005. Hong Kong and Australia converged with IFRS in 2005. Other places, such as Russia and Japan, are also making significant strides towards using IFRS more widely.

IFRS implementation suggests changes and uncertainty. Whilst the legal and regulatory compliance as well as cost implications are always the top consideration of organisations, investment funds must also be aware of the effects a potential move to IFRS could have on long-term decisions and transactions, and how this impact will would be communicated to investors.

In this publication, we have laid out some major areas in which IFRS could have a material impact on an investment fund, and have summarised the key similarities and differences with the accounting frameworks currently adopted in the major investment management centres.