International Financial Reporting Standards (IFRS): Is India Gearing Up?

Abstract

The growing demand for transparency and comparability of financial information across the globe is an important reason for adopting a single set of globally acceptable accounting and financial reporting standards. As the world globalizes, it has become imperative for India also to make a formal strategy for convergence with IFRS with the objective of harmonizing with globally accepted accounting standards. While India Inc. eagerly waiting for guidelines on the IFRS, experts say that a lot remains to be done before it can be introduced. With the involvement of various regulators such as MCA, RBI, IRDA, Tax authorities and SEBI Draft Schedule Vi and Accounting Standard 1 (Exposure Draft) consistent with IFRS, India will stick to IFRS convergence timeline. There is a need for clarity about the time by which companies need to convert their accounts as per IFRS; if there are changes to be made to regulatory frameworks, then by when that should happen; changes in accounting standards should be on a fast-track basis; how indirect and direct taxes would be levied. Conversion to IFRS is a tedious task involving significant time, cost and efforts. But the need of the hour is to strategize the convergence process and enable Indian companies to source equity globally and to outbound investments easy.