Financial reporting in India is being influenced by International Financial Reporting Standards (IFRS). IFRS reporting considerations are already impacting business decisions, and not simply through foreign subsidiaries or foreign investors.
In February 2011, the Ministry of Corporate Affairs (‘MCA’) issued a press release stating that 35 Indian Accounting Standards (‘Ind AS’) converged with IFRS are being notified and placed on the its website but effective date of the Ind AS is to be notified at a later date, after various issues (including tax related issues) are resolved within various departments of the government.
In early 2010, the MCA issued various press releases on IFRS roadmap and convergence plan for India specifying the convergence date to be 1st April, 2011 through 2014 for select Indian companies. The highlights and specific timelines as per the MCA press release are given below in the tab ‘Proposed Roadmap’.
At present, it appears that the timeline in the Roadmap is no longer valid for Phase I companies. The new implementation date for Ind AS is awaited from the MCA. It is unclear if the MCA will release a fresh Roadmap or just amend the implementation date for Phase I companies.
Conversion is much more than a technical accounting issue. IFRS or Ind AS may significantly affect any-number of a company’s day-to-day operations and may even impact the reported profitability of the business itself. Conversion brings a one-time opportunity to comprehensively reassess financial reporting and take ‘a clean sheet of paper’ approach to financial policies and processes.
Understanding IFRS or Ind AS and its implications is a business imperative for Indian companies. Take advantage of the resources that PwC has developed to increase your knowledge.
