5 If there is one area where International Financial Reporting Standards have faced a lot of criticism, it is with respect to their effect on market prices. Because financial assets and liabilities have to be reported at fair or market value, volatility in the stock markets inevitably leads to volatility in the accounting statements. The main standard is IAS 39 Financial Instruments: Recognition and Measurement. IAS 39 provides definitions for different types of financial securities and how to measure their value. Another is FRS 7 Financial Instruments: Disclosure. Given their hypothesized impact on accounting statements and the corresponding reinforced share price revisions, it is very likely that both standards will change over the next few years.

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