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www.businesstoday.in

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ü 
www.deloitte.com

ü 
www.ifrs.wiley.com

ü 
www.kpmg.com

ü 
www.iasplus.com

ü 
www.thehindubusinessline.com

ü 
www.ifrs.org

ü 
www.pwc.in

ü 
www.icai.org

ü 
www.ifrs.com

 

REFERENCES

 

 

 

 

 

 

·       Commitment is required for adoption of IFRS from
various stakeholders i.e. accounting professionals, academicians, company
accountants and audit firms, directors of company and regulators to overcome
these challenges and promote international convergence of accounting standards.

·       India has finally announced its convergence with
IFRS by2015 despite of many issues and challenges in the way of synchronization
of accounting standards.

·       There is increase in investment in Global markets by
Indian companies. This in turn  has
generated an interest in local Indian GAAP. Due to this, the roles of Indian
accounting standards, which are becoming closer to IFRS, have gained a great importance
from global financial reporting perspective.

·       There is presence of many multinational companies in
a country like India with the rapid liberalization process adopted

·       Convergence is expected to improve the relevance,
reliability and comparability of financial reports; thus, benefiting global
investors.

 

CONCLUSION

 

 

 

 

 

 

 

 

 

·       It will provide an analysis of
the accounting factors related to the Indian adoption of IFRS, present
scenarios for the evolution of Indian accounting standards and opportunities
for future research on global accounting standards and regulation

·      
This
study will help develop the conceptual framework for my analysis and discuss
more in depth about accounting factors driving the costs and benefits
associated with adoption and convergence with IFRS

·      
This
study shall help analyse and better understand the accounting and policy
factors related to the potential adoption and convergence with IFRS by India as
well as the other countries of the world

 

EXPECTED OUTCOME

 

 

 

6.      Consolidation of MNCs present in India is mandatory
irrespective of situations like war or short term ventures.

5.      In Case of Intangible Assets such as Goodwill life
whether definite or indefinite has to calculated on Revenue based Methods in
every FY.

4.      In case of Holding-Subsidiary companies, the
difference between Balance Sheet date should not be more than 3 months.

3.      In case of Related Party transactions apart from
blood relatives now Guardian members have also been added a person of a family
member

2.      In case of Fixed Assets Impairment , if the asset is
big machinery ,each part must be treated as a separate asset as life span of
each part can be variable.
eg. An Air plane or JCB machinery has multiple parts such as engine and other
accessories whose life may be variable , depending upon the same the treatment
for each part must be separately made

1.      In case of Revenue Recognition, it should be
disclosed at a fair value irrespective of being receivable.
eg. Income received by a company must be shown even if nor received in that FY

Some of
the major insights shared were as follows:

Existence
of proper internal control system and minimizing the risk of business disturbance
should be taken care of while modifying the information systems.

o   related party transactions, etc.

o   segment disclosures,

o   fixed assets,

·       Reporting
systems
The disclosure and reporting requirements under IFRS are completely different
from the Indian reporting requirements. Companies would have to ensure that the
existing business reporting model is amended to suit the reporting requirements
of IFRS.
The information systems should be designed to capture new requirements related
to:

·       Management
Compensation Plan
The terms and conditions relating to the above plans would have to be changed; because
the financial results under IFRS are likely to be very different from those
under the local Indian GAAP. The agreements would have to be re-negotiated
which is also a challenge.

·       Fair
value
Fair value as a measurement base for valuing most of the items of financial
statements is a major treatment under IFRS. Unpredictability and Subjectivity
to the financial statements is a major effect that can be noted on such
convergence. It also involves an effort in arriving at a fair value &
valuation experts need to be used. Adjustments to fair value result in gains or
losses which are replicated in the income statements. Whether this can be
included in computing distributable profit is also debated.

·       Taxation
The effect of convergence of IFRS on most of the items in the financial
statements would therefore create a change in the tax liabilities as well.
The taxation laws should address the treatment of tax liabilities arising on
convergence. It is important that the taxation laws identify IFRS compliant
financial statements or else it would duplicate administrative work for the
organizations

·       Training
To ensure successful implementation of IFRS professionals are looked upon.
The lack of training facilities and academic courses on IFRS in India is the
biggest hurdle for the professionals in implementing IFRS

·       Awareness

The entire set of financial statements will be required to undergo a drastic
change in case of adoption of IFRS.
There exist a number of differences between the Indian GAAP and IFRS. This may
cause the users of financial statements to look at them from a new viewpoint.
It would also be a challenge to bring about awareness of IFRS and its impact
among the users of financial statements. 

o   some of the guidelines are also issued by the
Ministry of Corporate Affairs

o   the guidelines are issued by SEBI for listed
companies

o   the guidelines for electricity companies are issued by
Central Electricity Regulatory Commission

o   the guidelines for insurance companies are issued by
the Insurance Regulatory and Development Authority(IRDAI)

o   guidelines for banking companies are issued by the
Reserve Bank of India (RBI)

·       Amendments
to the law
Today a major issue for Indian regulators is the lack of IFRS knowledge and
experience in the accounting and auditing profession; a need to align the
industry with specific accounting guidelines issued by various regulators.
For example,

o   cultural barrier to accepting foreign accounting
principles

o   diversified sources of industry-specific accounting control

o   lack of trained professionals

·       Macro
level:
The structural challenges include:

·       Micro
level
Cost of convergence is an immediate challenge. Deficiencies in corporate practices,
systems and processes are some of the other challenges.

 

Ø
Challenges
 

 

·     
Synchronization with Global
Financial Market
Some Indian companies are already listed on overseas stock exchanges and many
more will list in the future.
Globally acceptable accounting standards will then become the language of
communication for Indian companies.

·       Benefits
to Stock Exchange
Stock exchanges around the world could profit from synchronization of
accounting standards, as more companies begin to adopt the international
standards, they will become eligible for listing.

·       Reduction
in Cost
A potential benefit would be the reduced costs associated with MNCs who must resolve
their accounting information for multiple accounting standards

·       Transparency
 It will
improve the comparability of financial information and performance with global
peers and standards set by the industry.
This will result in more transparent reporting of a company’s activities which in
turn will benefit the investors, customers and key stakeholders in India and
overseas

·       Indian
Corporate
A company could enjoy the benefit of raising
capital from abroad viz external commercial borrowings if a company uses IFRS. Comparison
is made easier with a foreign rival if a company presents its financial
statement according to IFRS.

·       Accounting
Professionals
The accounting professionals are able to sell their services as experts in
different parts of the world. It offers them more opportunities in any part of
the world if same accounting practices conquer throughout the world. Their flexibility
to work in different parts of the world increases as a professionals in
industry as well as in practice

·       Industry
The industry is able to raise capital from global markets at lower cost if it
can create confidence in the minds of foreign investors that their financial
statements are in compliance with the globally accepted accounting standards.
With the variety in accounting standards from one country to another, firms
which operate in multiple countries face a multiple accounting requirements existing
in different countries.
This can help reduce the burden of financial reporting with convergence of
accounting standards for a reason being that it simplifies the process of
preparing the individual and group financial statements thus reducing the costs
of preparing the financial statements using different sets of accounting
standards

·       Investors
Investors are in search for such a data that is relevant, reliable, timely and
comparable across the jurisdictions. Such Financial statements prepared using a
common set of accounting standards help investors understand growth and investment
opportunities as divergent to statements prepared using a different set of
national accounting standards.
Further for a better understanding of such statements, investors have to incur
cost for the time and efforts to convert the financial statements so that they
can compare various opportunities in the market. Investors assurance would be
strong if accounting standards used are one set of standards globally accepted.
Convergence with IFRS contributes to investors understanding and confidence in
high quality financial statements.

·       Economy
The convergence benefits the economy by increasing growth of its international
business as the markets expand globally.
It facilitates upkeep of efficient capital markets along with a help to
increase the capital formation thereby contributing to improving economic
growth of a nation.
It also encourages international investing leading to more foreign capital inflows
to a country.

Ø
Benefits

 

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