Samir S. Mogul
◆ International community has long
back recognised the need for movingtowards harmonisation of the accounting standard across the globe.
Obviously on individual country is
always entitled to costomise the existing
Standards according to itsspecific
needs. Among other advantages of harmonisation of accounting standards,
the two benefits which tops the list are
(a) systematic review and evaluation ofthe performance of the multinational
company having subsidiaries and associates in various countries wherein
each country has its own set of GAAP
and (b) It provides a level playing fields
whereno country is advantaged or disadvantaged because of its GAAP
What is Harmonization of Accounting Standards?
Just as the words connote, “harmonization of
accounting standards” can be defined asthe continuous
process of ensuring that the Generally Accepted
Accounting Principles (GAAP) are formulated, aligned
and updated to international best practices (GAAPs in
other countries) withsuitable modifications and fine
tuning considering the domestic conditions.
Standards (IAS) issued by the UK based International
Accounting Standards Board (IASB) (formerly the
InternationalAccounting Standards Committee-IASC).
The IASB has been trying to harmonize international
accounting principles since 1973. Further, the IASB and
the International Organization of Securities
Commissions(IOSCO) have been jointly working on
harmonization since July 1995, and in May 2000 the
IOSCO finished its review of the IAS and recommended
usage of certain IAS, supplemented with reconciliation,disclosure and interpretations.
Why Harmonize Accounting Standards after all?
Academicians, regulators and governments have
been constantly striving to harmonize (i.e. to bring in line
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