Intelligent reflecting surfaces can improve the communication between a source and a destination. The surface contains metamaterial that is configured to "reflect" the incident wave from the source towards the destination. Two incompatible pathloss models have been used in prior work. In this letter, we derive the far-field pathloss using physical optics techniques and explain why the surface consists of many elements that individually act as diffuse scatterers but can jointly beamform the signal in a desired direction with a certain beamwidth. We disprove one of the previously conjectured pathloss models.