IFRS terminology is constantly changing
As there is a constant need to adapt and amend accounting standards, the terminology used changes with them, albeit at a much slower pace. In 2009 alone, admittedly a particularly busy year following the onset of the credit crunch, no fewer than 17 EU regulations concerned amendments to IFRS. The (at the time of writing) latest, seventh, edition of the official EU IFRS texts (IDW 2013) lists four completely new standards, one new interpretation (International Financial Reporting Interpretations Committee interpretation - IFRIC) and changes to a further ten standards, plus nonspecific improvements to IFRS, all since the previous sixth edition some 26 months earlier.
In most cases, changes in terminology are not explicitly commented on, which makes keeping track of alterations difficult even for frequent users. At times there are references to attempts at unifying or improving the terminology used, such as in a footnote to the headline of IAS 29, where it says that: “As part of Improvements to IFRSs issued in May 2008, the Board changed terms used in IAS 29 to be consistent with other IFRSs.” Occasionally, terminological change is in fact the main focus of the standard-setters’ actions.
Possibly the most comprehensive change in terminology in IAS/IFRS history occurred in 2006/2007, when a new version of IAS 1 introduced a number of new terms on a systematic basis. These new terms also replaced the old terminology in the other existing IFRS and were to be used in future regulations. Table 21.1 shows some of the most important terms before and after the amendments.
Table 21.1: Changes in terminology as given in IAS 1 (Source: lASplus 2014)
|
Term before 2007 revision of IAS 1 |
Term as amended by IAS 1 (2007) |
|
balance sheet |
statement of financial position |
|
cash flow statement |
statement of cash flows |
|
income statement |
statement of comprehensive income [income statement is retained in case of a two-statement approach] |
|
recognised in the income statement |
recognised in profit or loss |
|
recognised [directly] in equity (only for OCI components) |
recognised in other comprehensive income |
|
recognised [directly] in equity (for recognition both in OCI and equity) |
recognised outside profit or loss (either in OCI or equity) |
|
removed from equity and recognised in profit or loss (‘recycling') |
reclassified from equity to profit or loss as a reclassification adjustment |
|
Standard or/and Interpretation |
IFRSs |
|
on the face of |
in |
|
equity holders |
owners (exception for ‘ordinary equity holders') |
|
balance sheet date |
end of the reporting period |
|
reporting date |
end of the reporting period |
|
after the balance sheet date |
after the reporting period |
With the sheer number of changes to IFRS terminology, there is bound to be some confusion when, for instance, perusing texts written before this change (or indeed any other minor changes), although obviously this particular problem will diminish over time. In short, the constant alterations can clearly be seen as a major obstacle to the standardised use of terminology, irrespective of the language used.
