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HI Sir,
may I know what issue has arisen when it comes to principle vs rule-based accounting standards in the convergence btw IFRS and GAAP? Provide argument as example
ThanksPrinciples based is more flexible, less dogmatic and can thus better cope with changes as they occur. Principles based establishes the ‘spirit’ of the matter – honesty, integrity, transparency and all those other attributes that we would wish to be associated with the profession and the financial statements being prepared by and reported on by members of the profession
Rules based – dogmatic! THIS IS VAT YOU VILL DO! No flexibility, but easily checked that rules have been complied with – tick the boxes
Flexibility may be sen as a good thing or a bad thing – depends on your point of view
What’s within the ‘spirit’ in one person’s mind my be breaking the ‘spirit’ in another person’s mind
So where is continuity and consistency?
Is that enough?
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