International Financial Reporting Standards (IFRS) are the rules, standards and procedures accountants use to prepare financial statements. They were formed by the International Accounting Standards Board (IASB) in 2006 when existing Canadian standards, known as Generally Accepted Accounting Principles (GAAP) were combined with international GAAP standards.
As of Jan. 1, 2011, all publicly traded companies in Canada must use IFRS to prepare their financial statements. Private companies can choose to adopt IFRS or a new set of standards called Accounting Standard for Private Enterprises (ASPE).
Despite the move to IFRS, many people continue to use the term “GAAP” which had evolved over the years as a method to improve the quality and consistency of financial information used by investors.
More on IFRS
For more detailed information about IFRS or GAAP, see the CPA Canada Handbook.