IFRS & TFRS

What are IFRS and TFRS?

IFRS (International Financial Reporting Standards) and TFRS (Turkish Financial Reporting Standards) are regulatory frameworks that help companies prepare financial statements according to internationally accepted accounting principles. TFRS is the Turkish adaptation of IFRS, designed to comply with local legislation and practices, and is issued by the Public Oversight, Accounting, and Auditing Standards Authority (KGK). Both standards ensure transparency, reliability, and comparability in financial reporting, which is essential for businesses operating in global markets.

The main distinction between the two is that TFRS is tailored to Turkey’s specific regulations and requirements, while IFRS is internationally applicable. Despite this, both frameworks aim to produce financial statements that are consistent, transparent, and comparable, ensuring companies can gain trust in both local and global markets.

Purpose of IFRS and TFRS

The key goal of IFRS and TFRS is to harmonize financial reporting standards globally, allowing businesses to present reliable financial information and to be easily compared across countries. This helps companies project a clear and credible financial image to stakeholders such as investors, creditors, and regulatory bodies.

Main objectives of IFRS and TFRS:

• Ensure transparent and reliable financial reporting
• Facilitate accurate information sharing with international investors and credit providers
• Enhance the comparability of financial statements across global markets
• Reduce tax and financial risks through standardized reporting

Who Should Prepare Financial Reports in Compliance with IFRS and TFRS?

Companies that must follow IFRS and TFRS standards typically include those in specific sectors or situations where international financial reporting is required:

• Companies subject to independent audits
• Publicly traded companies that must report to international investors
• International joint ventures with cross-border business operations
• Financial institutions and insurance companies
• Multinational corporate groups operating in multiple countries

For companies looking to work with international investors, preparing for public offerings, or aiming for higher levels of transparency, adopting IFRS and TFRS standards is crucial for ensuring their financial reporting aligns with global expectations.