The new world ahead: the internationalisation of accounting rules

Abstract

The new draft standard on financial instruments will revolutionise financial reporting around the world. The author argues that because of the politics of accounting standard‐setting the recently promulgated draft standard will become the rule. This marks two great changes in global perception. First, it means that the principles behind accounting standards are aimed at providing investors with the ability to forecast the future. Second, it means that fair value will gradually take its place as the dominant measurement within accounts. This has severe consequences in the world of banking and financial institutions. The shape of the balance‐sheet will be changed for ever.