Harmonization of Accounting Standards
Samir S. Mogul < E X E C U T I V E S U M M A R Y >
◆ International community has long back recognised the need for moving towards harmonisation of the accounting standard across the globe. Obviously on individual country is always entitled to costomise the existing international accounting Standards according to its specific needs. Among other advantages of harmonisation of accounting standards,
the two benefits which tops the list are (a) systematic review and evaluation of the 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 where no 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 as the continuous process of ensuring that the Generally Accepted Accounting Principles (GAAP) are formulated, aligned and updated to international best practices (GAAPs in other countries) with suitable modifications and fine tuning considering the domestic conditions. Why Harmonize Accounting Standards after all? Academicians, regulators and governments have been constantly striving to harmonize (i.e. to bring in line or match) the local/domestic Accounting Standards (AS), also referred to as Generally Accepted Accounting Principles (GAAP), with the International Accounting The author is members of the Institute. The views expressed herein are the personal views of the author and do not necessarily represent the views of the Institute. 681
Standards (IAS) issued by the UK based International Accounting Standards Board (IASB) (formerly the International Accounting Standards Committee-IASC). The IASB has been trying to harmonize international accounting principles since 1973. Further, the IASB and the International Organization of Securities...