Framework-based Teaching of IFRS Judgements CHRISTOPHER HODGDON * , SUSAN B. HUGHES * and DONNA L. STREET ** * University of Vermont, USA; ** University of Dayton, USA Received: January 2011 Revised: February 2011 Accepted: April 2011 Published online: August 2011 ABSTRACT International Financial Reporting Standards (IFRS) are principles-based accounting standards that provide less prescriptive, interpretive and implementation guidance than do some national standards. Thus, considerable judgement in the application of IFRS is often required. We suggest a three-step approach to teaching IFRS judgements (concepts, to principles/rules, to the judgements required in the application of those rules), and provide accounting educators with guidance and resources that will help them create and enhance students’ awareness of the importance of making professional judgements in the application of IFRS. We consider both pervasive issues, such as the going concern assumption, materiality and related disclosures, and issues encountered in the application of most IFRSs, such as presentation and disclosure, classification, recognition/de-recognition, and measurement. We illustrate past judgements with examples from corporate annual reports, regulatory enforcement decisions published by the ESMA, and other sources for classroom use. KEY WORDS: International financial reporting standards, judgements, framework-based teaching Introduction—the Importance of Judgements and Estimates in the Application of IFRS The goal of the International Financial Reporting Standards (IFRS) Foundation and the Inter- national Accounting Standards Board (IASB) is to develop, in the public interest, a single set of high-quality, understandable, enforceable and globally-accepted accounting standards based upon clearly articulated principles. Progress toward achieving this goal hit a milestone in 2005 with the mandatory adoption of IFRS for the consolidated accounts of all publicly- traded companies in the European Union (EU); that same year IFRS were adopted in Austra- lia. The number of countries using IFRS as of 2011 exceeds 120. 1 Today all major economies have either adopted IFRS or have established timetables to adopt or converge with IFRS. Accounting Education: an international journal Vol. 20, No. 4, 415–439, August 2011 Correspondence Address: Donna L Street, Department of Accounting, University of Dayton, 300 College Park, Dayton, Ohio 45469-2242, USA. Email: donna.street@notes.udayton.edu 0963-9284 Print/1468-4489 Online/11/040415–25 # 2011 Taylor & Francis DOI: 10.1080/09639284.2011.589587