The aim of the ratings’ tool, which uses seven criteria for scoring, is to provide comparison between standards and their predecessors.
So far the ratings’ tool has shown controversial results.
After an initial test on three new standards and one draft standard issued by the Accounting Standards Board, the results have indicated that ‘a change is not always an improvement’.
Peter Holgate, senior technical partner at PwC, said: ‘The working presumption is that a new accounting standard is superior to the standard it replaces. However the scores that we have attributed to these standards tell us that in just half the cases we looked at, the new standards fared worse than their predecessors.’
Holgate added that the drive to develop the ratings tool was an attempt to offer a consistent approach to commenting on proposals for new standards or changes to existing ones.
In responding to discussion papers from the Accounting Standards Board Holgate said there was often the temptation to focus on one aspect, such as is it good for global harmonisation, instead of the whole reporting picture.
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