A Brief Discussion on Accounting Standards & IFRS

Accounting is developed in response to the need to keep a record of transactions between the organisation and various parties, which take place during a specified time period. But, for many years, the practice of financial accounting lacked a generally accepted theory that could clearly enunciate the objective of financial reporting of the required qualitative features of financial information or provided clear guidance as to when and how to recognise and measure the various elements of accounting. Over the years, a set of rules were developed as generalisations of existing practices. But, in absence of an accounting theory, accounting Standards were evolved in an ad-hoc manner with numerous inconsistencies among them.