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Comparison of Ind AS & IFRS

1. Terms and Language used

2. Presentation of Financial Statements

3. Treatment of Interests and Dividends

4. Disclosure of Earning per share

Complication in applying IFRS in India

- India AS would have to be altered to account for the introduction of fair and present value

- Time taken up for management to implement new IFRS policies can lead to exposure to more financial reporting risk.

- Indian companies would not be able to take advantage on using judicial court adjustments and would instead be required to add such adjustments to their income statements

- Business practices such as training employees, ensuring compliance with debt and tax planning would all be effected and slowed during transition period.

Historical Influences of Ind AS

  • India's accounting system: 16th century
  • Great Britain's influence of India
  • Independence of India 1947
  • India's difficult to standardize
  • Languages
  • States
  • Family-owed businesses

Current Accounting standard practices in India

When are Ind AS applied?

  • Why is India such an important target?
  • Companies Act 1956
  • Corrected several times: 1965 & 1969
  • Social System Model
  • IAA, ICSSR & ICAI efforts
  • Challenges they face

- India AS are applied to companies by initially complying with the first time adoption policy of India AS

- Forms of users of India AS are investors, governments, customers and suppliers.

- This requires companies to use India AS when filing there first reported financial information and continue to do so through each proceeding interim report.

- Other India AS such as policies on revenue become applicable after things like rendering of services or selling goods are recorded.

NACAS & ASB

NACAS (National Advisory Committee on Accounting Standards)

-Advises the central government on the formulation of the accounting policies

ASB (Accounting Standard Board)

- Provides interpretations and guidance on accounting standards

Differences b/w India GAAP & US GAAP

- US GAAP restricts the ability for possible valuation of tangible assets.

India GAAP does not.

- US GAAP requires companies to comply with SEC rules and

regulations, companies using India GAAP must comply with regulations of SEBI . While Indian GAAP first time adoption policy does not outline any specific

requirements, adoption under US GAAP means a complete financial timeline for the company must be submitted and compliance with transitional treatment standards is essential

- In Indian GAAP, companies are excluded from being able to use another set of accounting standards or regulations in order to procure a fair presentation of their financial information. The SEC does allow some forms of this practice but only in extreme cases.

Criticisms to current Ind AS

  • India's accounting methods are generalized and broad
  • ICAC sets India's accounting standards
  • 1990's and slow progression
  • Difficulties to invest
  • Weak practices and systems

Who issues India Accounting Standards?

The Institute of Chartered Accountants of India

Adoption of IFRS in India

(ICAI)

  • Unification: April 1st, 2011
  • Purpose of joining the IFRS
  • How this impacted accountants during the present, and how it will impact those of the future

References

  • http://www.mca.gov.in/Ministry/pdf/Ind_AS101.pdf
  • http://excelpublication.com/issue/Vol-I/IFRS_–_Opportunies_and_Challenges_for_India.pdf
  • http://220.227.161.86/23732frameworkIndAS.pdf
  • http://www.iasplus.com/en/jurisdictions/asia/india
  • http://www.joshiapte.com/Accounting%20Standards.aspx
  • http://www.mca.gov.in/Ministry/pdf/Ind_AS39.pdf
  • http://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/18354.pdf
  • http://www.iasplus.com/en/binary/asia/1103intrackingifrs9.pdf
  • http://www.charteredclub.com/ind-as-%E2%80%93-the-indian-desi-version-of-ifrs/
  • http://en.wikipedia.org/wiki/National_Advisory_Committee_on_Accounting_Standards
  • http://www.mca.gov.in/Ministry/pdf/Accounting_Standards.pdf
  • http://en.wikipedia.org/wiki/Institute_of_Chartered_Accountants_of_India

THANK YOU

India's Principle Accounting System

BY: Palak Jain, Brody O'Connor & Zuleika Chan

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