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» IFRS Reporting
The transition from Indian GAAP to IFRS
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.
On 22nd January, 2010, the Ministry of Corporate Affairs (the ‘MCA’) issued a press release on IFRS roadmap and convergence plan for India, reaffirming the convergence date to be 1st April, 2011 for select Indian companies. In view of the roadmap for achieving convergence, there will be two separate sets of Accounting Standards u/s Section 211(3C) of the Companies Act, 1956. The press release has brought some clarity to Indian companies but requires more detailed guidelines and clarifications on applicability and transition provisions. These are expected soon from the MCA.
Conversion is much more than a technical accounting issue. IFRS 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.
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