Oireachtas Joint and Select Committees
Wednesday, 20 May 2015
Committee of Inquiry into the Banking Crisis
Nexus Phase
Mr. John McDonnell:
The purpose of the set of financial statements is to faithfully represent the past transactions and events ... the accounting standards are brought in to direct management as to how to do ... how to measure their assets and liabilities in the context of reflecting past transactions and events. And, where a financial statement ... sorry, where an accounting standard is prescriptive in how one must measure and recognise an asset or liability and it is specifically directed at the measurement or recognition of an asset or liability, you must apply that accounting standard to that measurement and recognition, otherwise the accounts will not give a true and fair view.
Once an accounting standard says this is what you do, you have to follow that otherwise you could not say the accounts give a true and fair view. That's the way it works. The accounting standards come in, they set the rules and they set the boundary, if you like, on true and fair.
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