IFRS are principle-based standards. Interpreting these principles requires sound professional judgement in deciding the best practice for a particular transaction, condition, or event. The exercise of professional judgement can be complex due different business environments and at time downright confusing as there may be several possible interpretations of the same principle in practice. There is no clear demarcation line to determine when exercise of judgement to comply with the principles of IFRS has become unacceptable under the professional codes of ethic.

Practitioners of IFRS can be categorised into directors, accountants, auditors and regulators. Each one of these parties has different objectives, responsibilities and expectations, and thus could create varying degree of threshold on what ‘should’ and ‘should not’ be within tolerance of the code of ethics.