INTERNATIONAL FINANCIAL REPORTING STANDARD - EMERGING CHALLENGES & OPPORTUNITIES
ICAI has decided that Indian Accounting Standards shall converge with International Financial Reporting Standards including international standards commencing from 1st April, 2011. In view of IAS-,1 requirement of providing comparable financial statement for the last 2 accounting periods, the
deadline for conversion practically shifts to accounting year commencing 1st April, 2009.The corporate accountants need to quickly finalize the strategy in this regard. ICAI has issued a detailed concept paper on convergence with IFRS, indicating that IFRS will be mandatory for all corporate beyond a particular size including all listed companies, banks and insurance companies. Full details are available on ICAI website i.e. www.icai.in. The Institute has further decided to align most of the Indian Accounting Standards even for small and mid size corporate in conformity with international accounting standards including IFRS and about 70 to 80% requirements of IFRS will also apply to small and medium size corporate and other business enterprises. IFRS and International Accounting Standards are being pronounced from time to time by International Accounting Board (IASB) which has support of more than 135 countries, who have agreed to comply with IFRS requirements.
Even US Securities and Exchange Commission (SEC) has permitted foreign companies listed in US market to not to re-state their account in terms of US GAAP, in case they have adopted IFRS. This is a significant move. US GAAP and IFRS are likely to converge with each other in next 3 - 4 years, to achieve the target of uniform accounting standards worldwide. Indian and international communities are debating the concept of “how fair is the fair value” and how far it is proper to shift to fair value
accounting as compared to historical cost accounting. The checks and balances in case of fair value accounting needs to be deeper and stronger. The chartered accountants community needs to very carefully study all international financial reporting standards as a matter of great priority to enable
successful implementation of the target of convergence by 1st April, 2011 and transition to new set up of accounting standards with effect from 1st April, 2009.
deadline for conversion practically shifts to accounting year commencing 1st April, 2009.The corporate accountants need to quickly finalize the strategy in this regard. ICAI has issued a detailed concept paper on convergence with IFRS, indicating that IFRS will be mandatory for all corporate beyond a particular size including all listed companies, banks and insurance companies. Full details are available on ICAI website i.e. www.icai.in. The Institute has further decided to align most of the Indian Accounting Standards even for small and mid size corporate in conformity with international accounting standards including IFRS and about 70 to 80% requirements of IFRS will also apply to small and medium size corporate and other business enterprises. IFRS and International Accounting Standards are being pronounced from time to time by International Accounting Board (IASB) which has support of more than 135 countries, who have agreed to comply with IFRS requirements.
Even US Securities and Exchange Commission (SEC) has permitted foreign companies listed in US market to not to re-state their account in terms of US GAAP, in case they have adopted IFRS. This is a significant move. US GAAP and IFRS are likely to converge with each other in next 3 - 4 years, to achieve the target of uniform accounting standards worldwide. Indian and international communities are debating the concept of “how fair is the fair value” and how far it is proper to shift to fair value
accounting as compared to historical cost accounting. The checks and balances in case of fair value accounting needs to be deeper and stronger. The chartered accountants community needs to very carefully study all international financial reporting standards as a matter of great priority to enable
successful implementation of the target of convergence by 1st April, 2011 and transition to new set up of accounting standards with effect from 1st April, 2009.
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