Essay: IAS 29

Sample Essay

As the economic crisis hurt the credibility of some of the standards such as IAS 29 and thereby the decision making ability of business and investment users, this combined front is necessary to restore confidence in the accounting language the standard setting bodies lay down (Sigrid 2009).

Furthermore, by taking measures on standards that have been seen to be at the bottom of the economic collapse, it creates an aura in the markets that the damaging part has been addressed. In the case of the current financial crisis, the standards for valuing illiquid assets like mortgage backed securities and collateralized debt obligations led many to believe that the rules of the IASB have exacerbated the financial crisis (Rehman 2009). The article mentions that considering the relative importance of financial reporting in terms of usefulness in decision making, there may be a great danger from inaction by standard setting bodies in times of economic peril.

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