Susan Maina is a content writer at Mugo and Company, where she simplifies Accounting, Auditing, and Forensic Audit services with her finance expertise.
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If you’re just starting out in accounting in Kenya, you’ve probably heard the term IFRS thrown around – but maybe you’re scratching your head, wondering what it really means or why it matters to you and your organization.
Don’t worry – you’re in the right place.
By the time you finish this guide, you’ll understand the types of IFRS standards in Kenya, know which ones matter most for your business or NGO, and discover how Mugo & Company can make the whole process simpler for you.
Let’s dive right in!!
Mugo & Company can help you identify the relevant IFRS standards and guide you through adopting them step by step
Request your FREE Consultation with Mugo & Co todayWhatsAppIFRS stands for International Financial Reporting Standards.
Simply put, these are a set of global rules that guide you on how to prepare, present, and report your financial statements.
Think of IFRS as a universal accounting language. Whether you run a company, NGO, or startup in Kenya, following IFRS ensures that your financial reports are:
Pro Tip:
Even if you’re a beginner, starting with the relevant types of IFRS standards in Kenya – like IFRS 9 for financial instruments or IFRS 15 for revenue – will make your financial reporting much easier and more credible.
IFRS standards are developed and maintained by the International Accounting Standards Board (IASB).
Their main mission is to create a single set of high-quality accounting rules that make financial reporting consistent, transparent, and comparable worldwide.
That means if you adopt IFRS, your accounts are understandable not just in Kenya, but anywhere in the world.
It’s like speaking a language that investors and regulators immediately recognize and trust.
The very first International Financial Reporting Standard (IFRS) – originally known as an International Accounting Standard (IAS) – was issued in 1973.
Since then, IFRS has evolved to cover a wide range of accounting topics, from revenue recognition to leases and sustainability reporting.
In Kenya, IFRS adoption has been gradual, but today it’s widely recognized, especially for organizations that value transparency, credibility, and compliance.
IFRS Standards are designed to make your financial reporting clear, reliable, and credible.
The main objectives of IFRS standards for you and your organization include:
1. Present your financial information clearly
2. Build trust with investors, donors, and regulators
3. Compare your performance with others easily
4. Stay compliant with Kenyan authorities
If you’re serious about making your financial reporting reliable and credible, IFRS standards are your best friend.
If you’re just starting to explore IFRS Standards in Kenya, you might be wondering: How many standards are there, and which ones do I need to know?
Here’s a quick snapshot of the types of IFRS standards currently used in Kenya:
Don’t panic! You don’t need to master all of them at once. Focus on the standards that are most relevant to your organization, whether you’re running a business, NGO, or startup.
We help you understand which standards matter most and how to implement them according to Kenyan and international best practices.
Request your FREE Consultation with Mugo & Co todayWhatsAppBelow is a simple overview of the main types of IFRS standards used in Kenya.
If you want to understand any standard in detail, you can click through to Mugo & Company’s beginner guides for each IFRS standard.
| IFRS Standard | What It Covers | What Does It Say | Who Should Use It |
|---|---|---|---|
First-Time Adoption of IFRS |
– Helps organizations transition to IFRS when adopting the standards for the first time |
– New IFRS adopters | |
– Share-Based Payments |
– Explains how to record payments made using company shares or share-based incentives. |
– Companies offering employee share plans | |
Business Combinations |
– Provides rules for accounting when one company acquires or merges with another. |
– Companies involved in mergers & acquisitions | |
Insurance Contracts (replaced by IFRS 17) |
– Provided temporary guidance for insurance contract accounting before IFRS 17. – It was replaced by IFRS 17 |
– Insurance companies | |
Non-Current Assets Held for Sale & Discontinued Operations |
– Explains how to report assets that are being sold or operations that are discontinued. |
– Companies selling major assets or business units | |
Exploration for and Evaluation of Mineral Resources |
– Guides how companies account for exploration costs for oil, gas, and mineral resources. |
– Mining and extractive companies | |
Financial Instruments: Disclosures |
– Requires companies to disclose risks and details related to financial instruments like loans and investments. |
– Companies with financial assets or liabilities | |
Segment Reporting |
– Helps companies show how different parts of their business perform. |
– Large or diversified companies | |
Financial Instruments |
– This global accounting standard dictates how businesses classify financial assets and liabilities, recognize expected credit losses (ECL), and manage hedge accounting. |
– Businesses, banks, SACCOs, and investors | |
Consolidated Financial Statements |
– Requires parent companies to combine financial results of subsidiaries into one report. |
– Holding Companies / Companies with Subsidiaries | |
Joint Arrangements |
– Explains how to account for projects or entities jointly controlled with other partners. – Teaches you how to record your share of assets, liabilities, income, and expenses. |
– Joint ventures and partnerships | |
Disclosure of Interests in Other Entities |
– Requires companies to disclose relationships with subsidiaries, associates, or structured entities. |
– Companies with investments in other entities | |
Fair Value Measurement |
– Provides a framework for valuing assets and liabilities based on market value. |
– Companies and NGOs measuring assets at fair value | |
Regulatory Deferral Accounts |
– Shows how your company can report costs or revenues that regulators allow you to recover in the future. Think of it as “prepaid or delayed income” for businesses like utilities. |
– Companies under government or rate regulation that need to track these special accounts. I.e KPLC | |
Revenue from Contracts |
– Explains when and how to recognize income from customer contracts or services delivered. |
– Businesses and NGOs receiving funding or contracts | |
Leases |
– Requires organizations to record leases as assets and liabilities on the balance sheet. |
– Businesses or NGOs with leased assets | |
Insurance Contracts |
– Establishes a global framework for measuring and reporting insurance contracts. – Replaced IFRS 4 |
– Insurance companies | |
Presentation and Disclosure in Financial Statements |
– Introduces improved rules for presenting financial information clearly in financial statements. |
– Most Companies and Entities | |
Subsidiaries Without Public Accountability |
– Simplifies reporting for subsidiaries that follow IFRS but do not have public accountability. |
– Private subsidiaries | |
Simplified IFRS Framework for SMEs |
– A streamlined version of IFRS designed specifically for small and medium-sized businesses. |
– SMEs in Kenya | |
Sustainability Reporting |
– Requires disclosure of sustainability risks and opportunities affecting financial performance. |
– Organizations reporting ESG information | |
Climate-Related Disclosures |
– Requires reporting on climate risks and opportunities affecting business performance. |
– Organizations reporting climate impact |
Tip:
IFRS adoption in Kenya is guided by the Institute of Certified Public Accountants of Kenya (ICPAK), the professional body responsible for setting and promoting accounting standards in the country.
If you run a company, NGO, SME, or startup in Kenya, following IFRS standards helps you keep your financial reporting consistent with international best practices.
1. What does IFRS mean?
IFRS (International Financial Reporting Standards) are global accounting standards used to prepare financial statements.
These standards ensure that financial reports are transparent, consistent, and comparable across countries, which helps investors, regulators, and stakeholders understand a company’s financial position.
2. How many IFRS standards exist?
In Kenya, there are 19 main IFRS standards issued by the International Accounting Standards Board (IASB) , IFRS for SMEs, and 2 sustainability-focused standards (IFRS S1 & S2).
3. Which IFRS standards focus on sustainability reporting?
Two standards specifically address sustainability reporting:
These standards help organizations report how environmental and climate risks affect financial performance and long-term sustainability.
4. Are IFRS standards mandatory in Kenya?
Yes. IFRS standards are widely adopted in Kenya and are regulated by the Institute of Certified Public Accountants of Kenya (ICPAK).
Most companies, listed entities, and regulated organizations must prepare financial statements in accordance with IFRS to remain compliant with Kenyan financial reporting regulations.
5. Is there a specific IFRS standard for NGOs in Kenya?
Currently, there is no IFRS standard designed specifically for NGOs or non-profit organizations. However, NGOs in Kenya typically apply relevant IFRS standards such as:
These standards help NGOs maintain transparent financial reporting and accountability to donors and regulators.
To find out more, check out our guide on IFRS for NGOs in Kenya
IFRS standards in Kenya might seem overwhelming at first – but don’t worry!
You don’t need to master every standard immediately. Start by focusing on the IFRS standards most relevant to your organization, whether you run a company, NGO, or startup.
When you do, your accounts will be clear, transparent, and credible, making your organization more trustworthy to investors, donors, and regulators.
Are you ready to make IFRS adoption in Kenya simple and stress-free for your company, NGO, or startup?
Mugo & Company offers a free consultation to help you:
Take the first step today and get expert guidance tailored to your organization.
Request your free IFRS consultation with Mugo & Company now and start building trust with investors, donors, and regulators.
Click the WhatsApp button to book your free consultation with Mugo & Company now.
Or email us at info@mugo-co.com
WhatsAppThis guide on types of IFRS standards in Kenya is for educational and informational purposes only. It does not replace professional advice.
Always consult your accountant, auditor, or financial advisor for guidance tailored to your organization’s specific financial reporting and compliance needs.
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