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