MFIs have very varied business models, sources of funding, management & control, and clients. Due to their very varied businesses, it is very difficult to have a uniform accounting standard applicable to all of them. The constitution of MFIs is also varied - self - help groups, co-operatives, etc..  They are highly influenced by the regulatory requirements of the country in which they operate. They should follow the accounting standard applicable to NBFCs or those applicable to companies offering similar services as those offered by MFIs to their members.

Accounting is a source of information that managers could use for decision making. Going back to first principles, if the information is flawed or does not reflect the realities of a business, then there is very little value in its preparation other than for some compliance requirements.

The experience of a micro insurance company may yield some insights on how to think about the use of information and the business decision you are trying to make. In insuring houses built with flimsy materials in slums against damage from natural disasters, they reframed the problem as one of providing emergency cash to assist the insured to get back on their feet. This is a departure from the conventional insurance premise of covering against risk of damage to property that in this case, could not be reasonably assessed for their "correct" value. When disaster strikes, the insured could withdraw a fixed sum per incident based on the premiums they contracted and paid for. Hence, by treating the insurance as some form of annuity, the micro insurer does not require a complex valuation of the asset to price the insurance. They simply price the probably of incidence and the amount of payout from the "annuity" for each incident.  

Thank you Brother Ricardo for your views.