The immediate response is often that we should either ban or regulate these "scary" products and make this "unacceptable" situation go away. Unfortunately that doesn't solve the problem for which non-standard financial products are often created in the first place. Many financial institutions have specific risks which need hedging and prefer to use tailored product that matches the risk it has. Thus, the compromise made is that they get the exact hedge they want but the valuation of it may not be as clean and clear as they would like.
Has IFRS 13 solved this problem then? No and it's not designed to because there is not a black and white answer to every accounting question. The real issue is whether firms are aware of how much judgment (often subjective) actually goes into their accounts.
Terri Duhon, author of "How the Trading Floor Really Works", is a financial market expert with almost 18 years of experience in financial markets. She graduated from MIT in Math in 1994 and immediately joined JPMorgan as a derivatives trader on Wall Street.