IFRS and IAS explained: a guide for Swiss businesses

What is the difference between IAS and IFRS?

IFRS stands for International Financial Reporting Standards. The standards address when transactions are recognised, how they are measured, where they appear in financial statements and what supporting disclosures readers need. Their aim is useful, comparable financial information; they do not remove the need for estimates or professional judgement.

IAS stands for International Accounting Standards. These standards were issued by the former International Accounting Standards Committee, or IASC. When the International Accounting Standards Board, or IASB, was established in 2001, it adopted the existing standards and used the name IFRS for its new standards.

The IAS standards were not all replaced in 2001. Many remain applicable and can be amended. IAS 2 covers inventories, IAS 16 property, plant and equipment, and IAS 36 impairment. IFRS 15 addresses revenue from customer contracts and IFRS 16 leases.

The framework also includes interpretations. Check the version applicable to your reporting period, related amendments and effective dates. Publication of a new standard does not necessarily mean that it is already mandatory.

When does a Swiss business use IFRS?

A Swiss company is not automatically required to use IFRS because it trades internationally. The requirement may arise from the rules of a particular listing market, group instructions, contractual commitments to investors or a voluntary reporting decision.

For example, a Geneva SME acquired by an international group may continue to prepare local statutory accounts while submitting a quarterly IFRS consolidation package to its parent. That package is not necessarily a complete set of published IFRS financial statements.

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Start with the intended readers. Swiss GAAP FER, known as Swiss GAAP RPC in French, may be another framework to consider if it is accepted for the relevant purpose. Foreign financing alone does not establish which framework is required: review the agreement and the recipient’s instructions.

If your parent requests US GAAP, our IFRS vs US GAAP comparison explains the main areas to examine.

What do IFRS financial statements include?

Complete financial statements explain financial position, performance, cash movements and changes in equity. A balance sheet and a profit figure alone are insufficient.

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Comparative information helps readers understand changes between periods. Depending on the circumstances, additional comparative presentation may be required. Material movements should be supported by transactions, documented estimates or properly explained policy changes.

Plan the notes alongside the figures. Lease maturities, credit-risk information or valuation assumptions may require data that is not available from a trial balance alone. A reporting package designed only around account balances can therefore leave important gaps.

Which standards should you examine first?

Prioritise the transactions your business actually has. A service company with bundled customer contracts faces different issues from an industrial group acquiring subsidiaries.

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This is a starting point, not an exhaustive checklist. Deferred tax, employee benefits, foreign currencies and complex financial instruments can also be significant.

For example, receiving payment or issuing an invoice does not by itself determine when revenue is recognised. The analysis starts with the promises to the customer and the transfer of control. Similarly, a statutory valuation adjustment cannot simply be carried into IFRS without checking the applicable requirements. See our guide to hidden reserves in Swiss accounting for that distinction.

IFRS 18 and IFRS 19: preparing for 2027

IFRS 18 replaces IAS 1 for annual reporting periods beginning on or after 1 January 2027; early application is permitted. It introduces changes to profit-or-loss presentation, specified subtotals, disclosures about certain management-defined performance measures, and aggregation and disaggregation.

For a calendar-year company applying it in 2027, preparing the 2026 comparative information is part of the transition work. Identify the classifications, reporting mappings and reconciliation data early enough to avoid rebuilding the comparative year at the last minute.

IFRS 19 also applies from annual periods beginning on or after 1 January 2027, with early application permitted. It allows eligible subsidiaries to use reduced disclosures while applying the recognition and measurement requirements of other IFRS Accounting Standards.

It is not a general exemption for every SME and is distinct from the IFRS for SMEs Accounting Standard. Eligibility includes conditions concerning public accountability and the parent’s publicly available IFRS consolidated financial statements. Confirm eligibility before planning to use it.

Organise the reporting process

First agree the deliverable, reporting period, recipient and deadline. Then map the differences between your existing accounts and the required reporting. Every material adjustment needs an accounting basis, a calculation, an owner and supporting evidence.

• Identify the contracts and balances that need an IFRS assessment.
• Separate recurring adjustments from one-off transition work.
• Document the effect on assets, liabilities, profit and deferred tax where relevant.
• Prepare the disclosure information and review it with the financial statements.
• Reconcile the reporting output back to the underlying records.

A business with a small number of adjustments may be able to retain its bookkeeping system and maintain a controlled reporting layer. A more complex group may need additional systems, common policies and recurring controls. Your chart of accounts supports this process, but account mapping alone is not an IFRS conversion.

Budget separately for the initial assessment, conversion calculations, notes, any audit work and annual updates. First-time adoption also involves the opening IFRS statement of financial position and comparative information under IFRS 1. Waiting until the last quarter may leave too little time to gather historical evidence.

Finally, distinguish accounting from sustainability reporting. IFRS S1 and IFRS S2 are issued by the ISSB and have a separate scope and adoption framework. Preparing IFRS financial statements does not, by itself, create a universal obligation to publish sustainability disclosures.

Frequently asked questions