But back in the early 1990s, when the ASB began to look into the area, that was not the case. The previous few years had seen an explosion in innovative financial instruments that were accounted for in balance sheets and profit and loss accounts in such a variety of ways that the picture was extremely confused. While some accountants have contended that not too many shareholders were misled, there was plenty of obfuscation of what exactly constituted debt.
In keeping with the current spirit of disclosure, the standard, which differs little from the exposure draft published this time last year, seeks to clear away this haze and ensure there are distinctions between the various types of instrument.
Consequently, shareholders' funds and minority interests in subsidiaries from next June must be divided between equity and non-equity interests and liabilities between those that are convertible and those that are not. Moreover, their respective costs must be noted.
Mr Tweedie says that so many people have started to adhere to the standard before they have needed to because his body has made it clear it was not going to put off slamming the door on 'certain novel instruments that exploited the conventions developed for the more straightforward kinds of instruments that were used in the past'.
If this is so, then perhaps the current stream of derivatives, such as swaps and options, will evaporate as quickly. After all, FRS4 is, as one accountant put it, merely the necessary first step to dealing with this latest market dreamed up by the corporate finance houses.
The ASB is looking closely at the issue and is linking with its counterparts in the United States, Canada and Australia to formulate a common approach. Perhaps by the time they have reached their conclusions, they will not see the need to publish anything.