What accounting standard is used by most countries outside the United States?

The accounting standard used by most countries outside the United States is IFRS (International Financial Reporting Standards). IFRS provides a common framework for describing companies’ financial performance and position so that financial statements can be compared across borders.

The system developed from the International Accounting Standards Committee, established in June 1973 by accountancy bodies from ten countries. In 2001, the International Accounting Standards Board replaced that committee and adopted the name International Financial Reporting Standards for its newer standards.

IFRS is not the same as U.S. GAAP. The United States generally requires domestic public companies to use U.S. GAAP, while IFRS is required or permitted in jurisdictions across Europe, Asia, Africa, and elsewhere. The European Union’s 2002 regulation required IFRS for consolidated accounts of EU-listed companies beginning January 1, 2005.

A common mix-up is treating IFRS as a single worldwide rulebook with no local variations. Countries may adopt IFRS fully, modify it, or use national standards for certain companies. IFRS is also often described as more principles-based, whereas U.S. GAAP is commonly characterized as more rules-oriented.