Introduction to Accounting Standards

International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), and the standards issued by the Financial Accounting Standards Board (FASB) are globally recognized frameworks designed to enhance transparency, consistency, and comparability in financial reporting.

• IFRS (International Financial Reporting Standards)
  • IFRS is a set of globally accepted accounting standards, developed by the International Accounting Standards Board (IASB).
  • It emphasizes the principles-based guidelines for preparing and presenting financial statements.
  • IFRS aims to standardize financial reporting across countries, fostering transparency and comparability.
• IAS (International Accounting Standards)
  • IAS, issued by the International Accounting Standards Committee (IASC), preceded IFRS before the IASB took over in 2001.
  • While many IAS standards have been replaced or updated by IFRS, some are still in use and provide foundational guidance for specific accounting practices.
• FASB (Financial Accounting Standards Board)
  • The FASB is a U.S.-based organization that establishes accounting standards, known as Generally Accepted Accounting Principles (GAAP).
  • These standards govern financial reporting in the United States, emphasizing detailed and rule-based approaches.

Adoption in Banking

Accounting standards play a vital role in the banking sector, ensuring compliance with evolving regulatory requirements. Temenos Transact, a core banking solution, supports the following key accounting standards essential for banks:

• IAS39 - Financial Instruments
• IFRS9 - Financial Instruments or Transition from IAS39 to IFRS9
• IFRS7 - Financial Instruments – Disclosure (Partial Support)
• FASB91 - Recognition of Fees & Costs (US Standard)
• IFRS16 - Leasing (Lessor Perspective)
• IAS36 - Impairment of Assets
• Local GAAP or Multi GAAP Provisioning

By supporting these standards, Temenos Transact empowers banks to maintain regulatory compliance, enhance financial transparency, and address diverse accounting requirements across global and local frameworks.