Introduction to IFRS in the Indian Accounting sytsem

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INDEX
SR.NO. PARTICULARS PAGE NO.
1. Executive Summary
2. Introduction to IFRS
3. Scope of IFRS
4. Introduction to Ind AS
5. IFRS-Converged Indian Accounting Standards
6. List of Ind AS vis-a-vis IFRS and AS (Categorisation)
7. Comparison of Ind AS vis-a-vis IFRS
8. Observations
9. Conclusion
10. Bibliography

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1. EXECUTIVE SUMMARY
India, one of the fastest growing global economies is on the verge of converging with
International Financial Reporting Standards (IFRS). As on date 123 countries across the
globe have converged with IFRS, India is soon to join the bandwagon. The Ministry of
Corporate Affairs in its press release dated 25.2.2011 notified 35 Indian Accounting
Standards converged with International Financial Reporting Standards (henceforth called
Draft IND AS). The Ministry of Corporate Affairs will implement the IFRS converged Indian
Accounting Standards in a phased manner after various issues including tax related issues are
resolved with the concerned Departments. Consequently, the companies listed outside but
carrying their operations in India will need to convert their accounts from Indian GAAP to
IFRS while some of the companies would like to see how their how their present financial
statements would look if these were prepared as per IFRS. Though, there has been
considerable delay in the implementation of these standards, efforts are on the run. The newly
revised Schedule VI which is completely based on IAS 1 is a clear evidence of being
optimistic on convergence with IFRS. While similarities between the Indian Accounting
standards and IFRS do exist, the changes required to convert to international standards are
both numerous and complex. It is essential for companies and finance professionals to initiate
their IFRS learning curve and to begin the design of IFRS adoption strategy.

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2. INTRODUCTION TO IFRS
International Financial Reporting Standards (IFRS) are designed as a common global
language for business affairs so that company accounts are understandable and comparable
across international boundaries. They are a consequence of growing international
shareholding and trade and are particularly important for companies that have dealings in
several countries. They are progressively replacing the many different national accounting
standards. They are the rules to be followed by accountants to maintain books of accounts
which are comparable, understandable, reliable and relevant as per the users internal or
external.
The first preface was published in January 1975, and amended in November 1982. However,
it was replaced in April 2002 and further amended twice in January and November 2007. It
sets out the objective and due process of the IASB and explains the scope, authority, and
timing of application of IFRSs. Standards and Interpretations adopted by the International
Accounting Standards Board (IASB). They comprise of the following:
 International Financial Reporting Standards
 International Accounting Standards; and
 Interpretations developed by the IFRS Interpretations Committee (IFRIC) and
 Former Standing Interpretations Committee (SIC)
IFRS began as an attempt to harmonize accounting across the European Union but the value
of harmonization quickly made the concept attractive around the world. However, it has been
debated whether or not de facto harmonization has occurred. Standards that were issued by
IASC (the predecessor of IASB) are still within use today and go by the name International
Accounting Standards (IAS), while standards issued by IASB are called IFRS. IAS were
issued between 1973 and 2001 by the Board of the International Accounting Standards
Committee (IASC). On 1 April 2001, the new International Accounting Standards
Board (IASB) took over from the IASC the responsibility for setting International
Accounting Standards. During its first meeting the new Board adopted existing IAS and

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Standing Interpretations Committee standards (SICs). The IASB has continued to develop
standards calling the new standards "International Financial Reporting Standards". IFRS
Foundation is the new name of the IASC Foundation. The name change formally took effect
on 1 July 2010. A non profit organization, IFRS Foundation is the legal entity under which 9
the IASB operates. The Foundation is governed by a board of 22 trustees. The IFRS Advisory
Council provides support and advice in the standard setting process. The IASB staff, headed
by Chairman of IASB provides technical support to the Board and IFRS Interpretations
Committee. Moreover, the staff has a technical director and research director and a number of
project directors with considerable background in technical accounting matters The IASB
meets monthly and on a quarterly basis with the Advisory Council and national standard
setters. The meetings are open to public observation, except for certain administrative matters
that are discussed in closed sessions Effective 1 February 2009, the IASC Foundation
Constitution was amended to create a Monitoring Board of public authorities with the
purpose of enhancing public accountability of the IASC Foundation while not impairing the
independence of the standard-setting process.
The working of the IASB can be diagrammatically depicted as follows :

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3. SCOPE OF IFRS
1. All International Accounting Standards (IASs) and Interpretations issued by the former
IASC (International Accounting Standard Committee) and SIC (Standard Interpretation
Committee) continue to be applicable unless and until they are amended or withdrawn.
2. IFRS set out recognition, measurement, presentation and disclosure requirements of
transaction and events in general purpose financial statements. IFRSs apply to the
general purpose financial statements and other financial reporting by profit-oriented
entities -- those engaged in commercial, industrial, financial, and similar activities,
regardless of their legal form.
3. Entities other than profit-oriented business entities may also find IFRSs appropriate
4. General purpose financial statements are intended to meet the common needs of
shareholders, creditors, employees, and the public at large for information about an
entity's financial position, performance, and cash flows.
5. Other financial reporting includes information provided outside financial statements that
assists in the interpretation of a complete set of financial statements or improves users'
ability to make efficient economic decisions.
6. IFRS apply to individual company and consolidated financial statements.
7. A complete set of financial statements includes a statement of financial position, a
statement of comprehensive income, a statement of cash flows, a statement showing
either all changes in equity or changes in equity other than those arising from
investments by and distributions to owners, a summary of accounting policies, and
explanatory notes.

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4. INTRODUCTION TO IND-AS
In the present era of globalisation and liberalisation, the world has become an economic
village. The globalisation of the business world, the attendant structures and the regulations,
which support it, as well as the development of e-commerce make it imperative to have a
single globally accepted financial reporting system. A number of multi-national companies
are establishing their businesses in various countries with emerging economies and vice
versa. The entities in emerging economies are increasingly accessing the global markets to
fulfil their capital needs by getting their securities listed on the stock exchanges outside their
country. Capital markets are, thus, becoming integrated consistent with this world-wide trend.
More and more Indian companies are being listed on overseas stock exchanges. The use of
different accounting frameworks in different countries, which require inconsistent treatment
and presentation of the same underlying economic transactions, creates confusion for users of
financial statements. This confusion leads to inefficiency in capital markets across the world.
Therefore, increasing complexity of business transactions and globalisation of capital markets
call for a single set of high quality accounting standards. High standards of financial
reporting underpin the trust investors place in financial and non - financial information. Thus,
the case for a single set of globally accepted accounting standards has prompted many
countries to pursue convergence of national accounting standards with IFRSs. International
Financial Reporting Standards (IFRSs) are considered a "principles -based" set of standards.
In fact, they establish broad rules rather than dictating specific treatments. Every major nation
is moving toward adopting them to some extent. Large number of authorities requires public
companies to use IFRS for stock-exchange listing purposes, and in addition, banks, insurance
companies and stock exchanges may use them for their statutorily required reports. So over
the next few years, thousands of companies will adopt the international financial reporting
standards while preparing their financial statements. The Institute of Chartered Accountants
of India (ICAI) has announced that IFRS will be mandatory in India for financial
statements for the periods beginning on or after 1 April 2016 in a phased manner. There is a
roadmap issued by MCA for adoption of IFRS. These Converged IFRS to be adopted, will be
known as IND AS.

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There are many beneficiaries of convergence with IFRSs such as the economy, investors,
industry etc. They are:
 The Economy : When the markets expand globally the need for convergence increases
since the convergence benefits the economy by increasing growth of its international
business. It facilitates maintenance of orderly and efficient capital markets and also
helps to increase the capital formation and thereby economic growth. It encourages
international investing and thereby leads to more foreign capital flows to the country.
 Investors : A strong case for convergence can be made from the viewpoint of the
investors who wish to invest outside their own country. Investors want the
information that is more relevant, reliable, timely and comparable across the
jurisdictions. Financial statements prepared using a common set of accounting
standards help investors better understand investment opportunities as opposed to
financial statements prepared using a different set of national accounting standards.
Investors‘ confidence is strong when accounting standards used are globally accepted.
Convergence with IFRSs contributes to investors‘ understanding and confidence in
high quality financial statements.
 The Industry : A major force in the movement towards convergence has been the
interest of the industry. The industry is able to raise capital from foreign markets at
lower cost if it can create confidence in the minds of foreign investors that their
financial statements comply with globally accepted accounting standards. With the
diversity in accounting standards from country to country, enterprises which operate
in different countries face a multitude of accounting requirements prevailing in the
countries. The burden of financial reporting is lessened with convergence of
accounting standards because it simplifies the process of preparing the individual and
group financial statements and thereby reduces the costs of preparing the financial
statements using different sets of accounting standards.

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5. IFRS-CONVERGED INDIAN ACCOUNTING STANDARDS
The Institute of Chartered Accountants of India (ICAI) being the accounting standards -
setting body in India, way back in 2006, initiated the process of moving towards the
International Financial Reporting Standards (IFRSs) issued by the International Accounting
Standards Board (IASB) with a view to enhance acceptability and transparency of the
financial information communicated by the Indian corporate through their financial
statements. This move towards IFRS was subsequently accepted by the Government of India.
The Government of India in consultation with the ICAI decided to converge and not to adopt
IFRSs issued by the IASB. The decision of convergence rather than adoption was taken after
the detailed analysis of IFRSs requirements and extensive discussion with various
stakeholders. Accordingly, while formulating IFRS-converged Indian Accounting Standards
(Ind AS), efforts have been made to keep these Standards, as far as possible, in line with the
corresponding IAS/IFRS and departures have been made where considered absolutely
essential. These changes have been made considering various factors, such as, various
terminology related changes have been made to make it consistent with the terminology used
in law, e.g., ‗statement of profit and loss‘ in place of ‗statement of comprehensive income‘
and ‗balance sheet‘ in place of ‗statement of financial position‘. Certain changes have been
made considering the economic environment of the country, which is different as compared
to the economic environment presumed to be in existence by IFRS.
Initially Ind AS were expected to be implemented from the year 2011. However, keeping in
view the fact that certain issues including tax issues were still to be addressed, the Ministry of
Corporate Affairs decided to postpone the date of implementation of Ind AS. In July 2014,
the Finance Minister of India at that time, Shri Arun Jaitely ji, in his Budget Speech,
announced an urgency to converge the existing accounting standards with the International
Financial Reporting Standards (IFRS) through adoption of the new Indian Accounting
Standards (Ind AS) by the Indian companies from the financial year 2015-16 voluntarily and
from the financial year 2016-17 on a mandatory basis. Pursuant to the above announcement,
various steps have been taken to facilitate the implementation of IFRS-converged Indian
Accounting Standards (Ind AS). Moving in this direction, the Ministry of Corporate Affairs
(MCA) has issued the Companies (Indian Accounting Standards) Rules, 2015 vide
Notification dated February 16, 2015 covering the revised roadmap of implementation of Ind

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AS for companies other than Banking companies, Insurance Companies and NBFCs and
Indian Accounting Standards (Ind AS). As per the Notification, Indian Accounting Standards
(Ind AS) converged with International Financial Reporting Standards (IFRS) shall be
implemented on voluntary basis from 1st April, 2015 and mandatorily from 1st April, 2016.
With a view to provide a stable platform to the Indian entities for smoother and effective
implementation of Ind ASs it has been decided to converge early by notifying certain Ind ASs
corresponding to the IFRSs issued by the IASB such as IFRS 9, Financial Instruments
(effective from January 01, 2018), IFRS 14, Regulatory Deferral Balance (effective from
January 01, 2016), IFRS 15, Revenue from Contracts with Customers (Effective from
January 01, 2017).
ROADMAP FOR IMPLEMENTATION OF IND AS:-
Voluntary: 1st April 2015 or thereafter : Voluntary Basis for all companies (with
Comparatives)
Phase I: 1st April 2016: Mandatory Basis for:
(a) Companies listed/in process of listing on Stock Exchanges in India or
Outside India having net worth >= INR 5 Billion
b) Unlisted Companies having net worth > = INR 5 Billion
c) Parent, Subsidiary, Associate and J.V. of Above
Phase II: 1st April 2017: Mandatory Basis for:
(a) All companies which are listed/or in process of listing inside or outside
India on Stock Exchanges not covered in Phase I (other than companies listed
on SME Exchanges)
b) Unlisted companies having net worth INR 5 Billion>= INR 2.5 Billion
c) Parent, Subsidiary, Associate and J.V. of Above
 Companies listed on SME exchange not required to apply Ind AS.
 Once Ind ASs are applicable, an entity shall be required to follow the Ind AS for all the
subsequent financial statements.
 Companies not covered by the above roadmap shall continue to apply existing Accounting
Standards notified in Companies (Accounting Standards) Rules, 2006.

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6. Categorisation of Ind AS vis-a-vis IFRS and AS
This exhibit gives the list of Ind-AS corresponding to IFRS/IAS, IFRIC and SIC, as also the
existing Accounting Standard (AS). The categorisation made by ICAI is as follows:
Ind-AS
Reference
Ind-AS Title
Corresponding IFRS Existing AS
Reference
IFRS IFRIC SIC
IND-AS 101 First-time adoption of Indian
Accounting Standards
IFRS 1 - - -
IND-AS 102 Share based Payment IFRS 2 - - -
IND-AS 103 Business Combination IFRS 3 - - AS 14
IND-AS 104 Insurance Contracts IFRS 4 - - -
IND-AS 105 Non-Current Assets Held for Sale and
Discontinued Operations
IFRS 5 - - AS 24
IND-AS 106 Exploration for and Evaluation of
Mineral Resources
IFRS 6 - - -
IND-AS 107 Financial Instruments: Disclosures IFRS 7 - - AS 32
IND-AS 108 Operating Segments IFRS 8 - - AS 17
IND-AS 1 Presentations of Financial Statements IAS 1 - - AS 1
IND-AS 2 Inventories IAS 2 - - AS 2
IND-AS 7 Statement of cash flows IAS 7 - - AS 3
IND-AS 8 Accounting Policies, Changes in
Accounting Estimates and Errors
IAS 8 - - AS 5
IND-AS 10 Events after the Reporting Period IAS 10 IFRIC 17 - AS 4
IND-AS 11 Construction Contracts IAS 11 IFRIC 12 SIC 29 AS 7
IND-AS 12 Income Taxes IAS 12 - SIC 21,
25
AS 22
IND-AS 16 Property, Plant and Equipment IAS 16 IFRIC 1 - AS 6, 10
IND-AS 17 Leases IAS 17 IFRIC 4 SIC 15,
27
AS 19
IND-AS 18 Revenue IAS 18 IFRIC 13,
15, 18
SIC 31 AS 9
IND-AS 19 Employee Benefits IAS 19 IFRIC 14 - AS 15
IND-AS 20 Accounting for Government Grants
and Disclosure of Government
Assistance
IAS 20 - SIC 10 AS 12
IND-AS 21 The Effects of changes in Foreign
Exchange Rates
IAS 21 - - AS 11
IND-AS 23 Borrowings Costs IAS 23 - - AS 16

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Ind-AS
Reference
Ind-AS Title
Corresponding IFRS Existing AS
ReferenceIFRS IFRIC SIC
IND-AS 24 Related Party Disclosures IAS 24 - - AS 18
IND-AS 27 Consolidated and Separate Financial
Statement
IAS 27 - SIC 12 AS 21
IND-AS 28 Investment in Associates IAS 28 - - AS 23
IND-AS 32 Financial Instruments: Presentation IAS 32 IFRIC 2 - AS 31
IND-AS 33 Earnings Per Share IAS 33 - - AS 20
IND-AS 34 Interim Financial Reporting IAS 34 IFRIC 10 - AS 25
IND-AS 36 Impairment of Assets IAS 36 - - AS 28
IND-AS 37 Provisions, Contingent liabilities and
Contingent Assets
IAS 37 IFRIC 5,
6
- AS 29
IND-AS 38 Intangible Assets IAS 38 - SIC 32 AS 26
IND-AS 39 Financial Instruments: Recognition
and Measurement
IAS 39 IFRIC 9,
16, 19
- AS 13, 30
IND-AS 40 Investment Property IAS 40 - - -
IND-AS 41 Agriculture IAS 41 - - -

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7. Comparison of Ind AS vis-a-vis IFRS
I. IFRS 5 v/s Ind AS 105: Non-current Assets Held for Sale and
Discontinued Operations.
1. Objective
The objective of this Indian Accounting Standard (Ind AS) is to specify the accounting
for assets held for sale, and the presentation and disclosure of discontinued operations.In
particular, this Ind AS requires:
(a) assets that meet the criteria to be classified as held for sale to be measured at the
lower of carrying amount and fair value less costs to sell, and depreciation on such assets
to cease; and
(b) assets that meet the criteria to be classified as held for sale to be presented separately
in the balance sheet and
(c) the results of discontinued operations to be presented separately in the statement of
profit and loss.
2. Scope
The classification and presentation requirements of this Ind AS apply to all recognised
non -current assets and to all disposal groups of an entity. The measurement provisions
of this Ind AS do not apply to the following assets, which are covered by the Ind ASs
listed (i.e. Ind AS 12-Deferred Tax Asset, Ind AS 19-Employee Benefits, Ind AS 109-
Financial Instruments, Ind AS 41-Agriculture, Ind AS 104-Insurance Contracts) either as
individual assets or as part of a disposal group.
3. Discontinued Operations
A component of an entity that either has been disposed of or is classified as held for sale
and:
(a) represents a separate major line of business or geographical area of operations,
(b) is part of a single co-ordinated plan to dispose of a separate major line of business or

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geographical area of operations or
(c) is a subsidiary acquired exclusively with a view to resale.
Disposal Group : A group of assets to be disposed of, by sale or otherwise, together as a
group in a single transaction, and liabilities directly associated with those assets that will
be transferred in the transaction. The group includes goodwill acquired in a business
combination if the group is a cash-generating unit to which goodwill has been allocated
in accordance with the requirements of Ind AS 36, ‘Impairment of Assets’, or if it is an
operation within such a cash-generating unit.
4. Classification of Non-current Assets (or Disposal Groups) as Held for Sale
or as Held for Distribution to Owners
An entity shall classify a non-current asset (or disposal group) as held for sale if its
carrying amount will be recovered principally through a sale transaction rather than
through continuing use. To be classified as held for sale/distribution the asset (or disposal
group):
1. Must be available for immediate sale in its present condition subject only to terms that
are usual and customary for sales of such assets (or disposal groups) and
2. Its sale must be highly probable.
5. Measurement of Non-current Assets (or Disposal Groups) Classified as
Held for Sale or Held for Distribution
 An entity shall measure a non-current asset (or disposal group) classified as held for
sale at the lower of its carrying amount and fair value less costs to sell.
 An entity shall measure a non-current asset (or disposal group) classified as held for
distribution to owners at the lower of its carrying amount and fair value less costs to
distribute.
When the sale is expected to occur beyond one year, the entity shall measure the costs to
sell at their present value. Any increase in the present value of the costs to sell that arises
from the passage of time shall be presented in profit or loss as a financing cost.

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6. Major Changes in Ind AS 105 vis-à-vis IFRS 5
 Classification of a Non-current Asset
IFRS 5 prescribes the conditions for classification of a non-current asset (or disposal
group) as held for sale. In Ind AS 105, a clarification has also been added that the non-
current asset (or disposal group) cannot be classified as held for sale, if the entity
intends to sell it in a distant future.
 Non-current Assets accounted as per the Fair Value Model
IFRS 105 deals with noncurrent assets that are accounted for in accordance with the fair
value model in IAS 40. Since Ind AS 40 prohibits the use of fair value model, this has
not been included in Ind AS 105.
 Presentation of Discontinued Operations
IFRS 5 requires presentation of discontinued operations in the separate income
statement, where separate income statement is presented. This requirement is not
provided in Ind AS 105 consequential to the removal of option regarding two statement
approach in Ind AS 1. Ind AS 1 requires that the components of profit or loss and
components of other comprehensive income shall be presented as a part of the
statement of profit and loss.
 Transitional Provisions
Ind AS 101 provides transitional relief, similar to the transitional provisions in IFRS 5,
that while applying Ind AS 105, an entity may use the transitional date circumstances to
measure such assets or operations at the lower of carrying value and fair value less cost
to sell. This would facilitate smooth convergence with Ind AS.

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II. IFRS 6 v/s Ind AS 106: Exploration for and Evaluation of Mineral Resources
1. Objective
The objective of this Indian Accounting Standard (Ind AS) is to specify the financial
reporting for the exploration for and evaluation of mineral resources.
In particular, the Ind AS requires Limited Improvements to existing accounting practices
for exploration and evaluation expenditures, Entities that recognise exploration and
evaluation assets to assess and measure such assets for impairment and Disclosures to
Identify and explain the amounts in the entity’s financial statements arising from the
exploration for and evaluation of mineral resources with reference to the amount, timing
and certainty of future cash flows
2. Measurement of Exploration and Evaluation of Assets
 Measurement at Recognition
Exploration and evaluation assets shall be measured at cost.
 Measurement of elements of Cost of Exploration and Evaluation of Assets
An entity shall determine an accounting policy specifying which expenditures are
recognised as exploration and evaluation assets and apply the policy consistently.
 Measurement after Recognition
After recognition, an entity shall apply either the cost model or the revaluation model to
the exploration and evaluation assets. If the revaluation model is applied (either the
model in Ind AS 16 ‘Property, Plant and Equipment’ or the model in Ind AS 38) it
shall be consistent with the classification of the assets.
3. Classification of Exploration and Evaluation Assets
An entity shall classify exploration and evaluation assets as tangible or intangible
according to the nature of the assets acquired and apply the classification consistently.

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4. Impairment Recognition and Measurement
Exploration and evaluation assets shall be assessed for impairment when facts and
circumstances suggest that the carrying amount of an exploration and evaluation asset
may exceed its recoverable amount.
When facts and circumstances suggest that the carrying amount exceeds the recoverable
amount, an entity shall measure, present and disclose any resulting impairment loss in
accordance with Ind AS 36 assets for impairment. Each cash-generating unit or group of
units to which an exploration and evaluation asset is allocated shall not be larger than an
operating segment determined in accordance with Ind AS 108, ‘Operating Segments’.
One or more of the following facts and circumstances indicate that an entity should test
exploration and evaluation assets for impairment (the list is not exhaustive):
(a) the period for which the entity has the right to explore in the specific area has expired
during the period or will expire in the near future, and is not expected to be renewed.
(b) substantive expenditure on further exploration for and evaluation of mineral
resources in the specific area is neither budgeted nor planned.
(c) exploration for and evaluation of mineral resources in the specific area have not led to
the discovery of commercially viable quantities of mineral resources and the entity has
decided to discontinue such activities in the specific area.
(d) sufficient data exist to indicate that, although a development in the specific area is
likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely
to be recovered in full from successful development or by sale.
An entity shall disclose information that identifies and explains the amounts recognised
in its financial statements arising from the exploration for and evaluation of mineral
resources.

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8. OBSERVATIONS
The adoption of Ind AS would entail a significant change in the financial reporting
framework used by Indian companies to report their financial results. As a consequence, the
reported earnings (net income) and financial position (net worth) reported by all these
companies would undergo a change. Impact of this change would vary from sector to sector
and company to company, with some sectors/companies being significantly impacted.
The move to Ind AS standards will significantly enhance the quality of and transparency in
financial reporting by Indian companies. It will also enhance the international comparability
of financial statements of Indian companies and make the Indian capital markets more
attractive. It will also reduce capital costs and facilitate international fund-raising by Indian
companies. Applying IFRS converged standards has significant benefits for Indian
multinationals operating across the world and for multinationals operating in India.
With these Ind AS standards, India will be adopting some of the latest global standards before
the rest of the world does. While India has been working on IFRS convergence, IFRS itself,
as a body of standards, continues to evolve. Recently, the International Accounting Standards
Board (IASB) issued new standards on revenue recognition and financial instruments, and
these standards are mandatorily applicable internationally only from 2017 and 2018
respectively. The notified Ind AS standards are converged with these newer standards,
including those on revenue and financial instruments, considering the timing of India’s move
to IFRS. Early adoption of these standards as compared to the global adoption timelines,
would not only ensure that our standards remain current with or ahead of their IFRS
equivalents, but also provide a stable platform of reporting for Indian companies for a period
of time after they move to Ind AS. If these standards are not early adopted, Indian companies
would have to adopt these newer standards a year or two after they move to Ind AS,
potentially hampering comparability and increasing cost of compliance. However, Indian
companies will have to gear up to adopt these standards ahead of global timelines and closely
monitor developments by bodies such as the Transition Resource Group of the IASB.
India’s efforts towards convergence with IFRS is a giant leap forward and to make Indian
standards contemporary. However, due to the existence of certain carve-outs or deviations
from IFRS, these standards would not be considered as equivalent to IFRS, even though the

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carve-outs are relatively minor. While some of these carve-outs are optional, there are certain
mandatory carve-outs, which may prevent companies from being able to state dual
compliance with IFRS as per the IASB. Ability to state full compliance with IFRS would be
relevant for several Indian companies that are raising funds from global investors, including
from leading global capital markets. The MCA and the ICAI have done laudable efforts
towards minimising the carve-outs as compared to those that existed in the 2011 version of
the Ind-AS standards. Going forward, the MCA and the ICAI should continue to work closely
with the IASB to eliminate these carve-outs in a time bound manner by either getting the
IASB to change the IFRS requirements or align the Indian requirements with IFRS.
Companies on their part should endeavour to minimise the use of carve-outs, so that their
financial reports are as close to or the same as it would be under IFRS.
The transition to Ind AS has an organisation wide impact, and not just accounting.
Companies need to plan in advance and invest time. Given the pervasive nature of the impact
of these new standards, in addition to the financial reporting impacts, companies will also
have to assess impact on other stakeholders such as investors and analysts. Companies would
also have to determine the impact of the standards on areas such as tax planning, compliance
with loan covenants, incentive plans, new arrangements for acquisitions, funding, etc. This
would also require changes to systems and processes including, sales and contracting
processes, IT systems, internal controls, etc.

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9. CONCLUSION
With the notification of these standards, Indian financial reporting has undergone seismic
shift by introducing the most contemporary standards. It is a paradigm shift that introduces
several new and complex concepts, and will involve the application of significant judgement
and estimates, accompanied by detailed quantitative and qualitative disclosures. On the
whole, it would lead to a better reflection of the financial performance of an entity and more
relevant information in the hands of users of financial statements. However, implementation
is a quantum leap from mere intent. With the standards and roadmap being notified, the
Government has kept its date with IFRS convergence. The ball is now firmly in India Inc’s
court. The corporate sector will need to do its part to make the implementation a success,
starting with an acknowledgement of the fact that this is not just an accounting change, but
something that impacts the whole organisation and the way they do business. With less than a
few years to go, it is time for the corporates to make a holistic assessment of this change, and
gear up for the implementation within the fairly short timelines.

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10. BIBLIOGRAPHY
I have taken information from:
 http://www.caclubindia.com/forum/difference-between-as-ind-as-ifrs-165605.asp
 http://www.ey.com/IN/en/Issues/IFRS
 http://www.caaa.in/Image/ifrs%20indas.pdf
 http://www.iasplus.com/en/publications/india/ifrs-and-ind-as
 http://taxguru.in/company-law/differences-ifrs-ind.html
 http://www.pwc.in/assets/pdfs/publications-2011/comparison_of_ind_as_with_ifrs.pdf
 https://www2.deloitte.com/content/dam/Deloitte/in/Documents/audit/in-audit-indian-
gaap-ifrs-and-indas-a-comparison-noexp.pdf
 http://www.mca.gov.in/Ministry/pdf/Ind_AS106.pdf
 http://www.mca.gov.in/Ministry/pdf/Ind_AS105.pdf
 http://resource.cdn.icai.org/23733comparision_IFRS-Ind%20AS.pdf
 http://www.icai.org/post.html?post_id=7543
 http://reports.standardchartered.com/annual-report-
2012/supplementaryinformation/financialinformation/bdifferencesbetweenindiangaapifrs
.html
 http://resource.cdn.icai.org/39331bos28801.pdf
 http://www.investopedia.com/terms/i/ifrs.asp
 https://en.wikipedia.org/wiki/International_Financial_Reporting_Standards