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Should Accounting Standards Be Rule-Based Or Principle Based

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Introduction
The standards for financial reporting are designed for corporation with global business matters in order to understand and compare the global business needs. These are the rules to be followed by worldwide accountants to maintain books of financial records. In the world of business it is called international financial reporting standards. The debate has been going throughout the last fifty years on whether accounting standards should be rules –based or principle based (Zeff, 2003). The question is whether historical cost accounting or fair value must be used is questioned and for the instant, as Zeff (2007) opinion, fair value is becoming more prominent in the standards of the International Accounting Standards Board (IASB) as well as in the standards of its U.S. counterpart, the Financial Accounting Standards Board (FASB). This shows that the universal financial reporting comparability is developing, as Zeff (2007) further argues.
After the IAS regulation of 2002 went into influence, approximately 800 registered companies in the European Union are started to get ready their consolidated financial statements with the help of using …show more content…

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