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10 / 22

so the argument goes, so will the accounting principles arising from

those

purposes.

In

some

countries,

such

as

Germany

for

example,

financial statements have been used as a basis for accounting for tax

liability.

14/

In

other

countries,

such

as

the

United

States,

financial

statements have been intended to be general purpose statements that

are designed for non-governmental users such as investors and

creditors, but are not used principally as a part of the tax compliance

system.

In

yet

other

countries,

financial

statements

are

prepared

primarily for use of creditors, and not for equity investors. 15/

The dramatic increase in international capital flows in recent years,

however, particularly with respect to world class companies, is pushing

us

towards

development

of

multi-purpose

financial

statements.

It

is

more and more important that a world class company produce financial

statements that are of use not only to its banks, but also to the many

outside institutions and investors, both public and private, from which

such a company may want to attract funds.

For its part, the lASe has decided that international

accounting

principles should be designed to produce multi-purpose

financial

14/ The

See Organisation for Relationship between

by

the

Working

Group

on

Economic Co-operation and Development, Taxation and Financial Reporting, Report Accounting Standards (Paris 1985).

15/

~

Groves,

supra

note

11, at 595. 9

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