• The NYSE and AICPA jointly published – First Accounting Standard of the World in 1934.• During 1960 to 2008 Financial accounting and reporting "principles, standards, and practices.“ emerged as International Accounting Standards• New series of guidelines called International Financial Reporting Standards (IFRS) from 1997 ICAI constituted the Accounting Standards Board (ASB) on 21st April, 1977, with a view to harmonize the diverse accounting policies and practices in use in India.(32 standards)
29 International Accounting Standard (IAS), 8International Financial Reporting Standards (IFRS),11Standing Interpretations Committee (SIC) and 17International Financial Reporting Interpretations(IFRIC) Adoption by over 110 countries, Acceptance by Stock Markets Globally. Full adoption of IFRS from accounting periodcommencing on or after 1 April 2011, Applicable tolisted entities and public interest entities such asbanks, insurance companies and large sized entities(turnover 100 crores, public deposit 25 crores lastyear)
"Adoption of IFRS, the new global reportingstandards, would improve Comparability (Benchmarking with global peers) transparency (Base is known to the investor) and credibility of financial statements and in a globalized world, would lead to greater economic efficiencies, (Avoids multiple reporting) CII said in a release.
India needs 500 Billion dollars of investment in infrastructure sector alone by 2012. As per Bloomberg, Indian companies raised Rs12,672 crore (USD 2.64 billion converted at Rs 48 a dollar) by issuing depository receipts in the September 2009 quarter itself.
IFRS (IAS 1) INDIAN GAAP (AS1)No specific Format No specific format but guided by Companies Act and Industry GuidelinesTwo Years ‘ Consolidated Two Years ‘ Consolidated• Balance Sheet • Balance Sheet• Income Statement • Income Statement• Cash Flow Statement • Cash Flow Statement• Changes in equity• Accounting Policies and notes • Accounting Policies and notes• Statement of recognized income and expenses(SORIE)
IFRS (IAS 29) INDIAN GAAPIf cumulative inflation in thecountry is approaching or No guidanceexceeding 100% in three yearsEntities that have functionalcurrency of the hyperinflationeconomy , restate their financialstatement using a measurementunit current at the Balance Sheet.
IFRS ( IAS 3) Indian GAAP (AS 14) Consolidation- Purchase MethodAll business combinations shall beaccounted as per purchase method Amalgamation- Pooling of Interestat fair values Acquisition- Held as a subsidiary and long term investment
Factors IFRS (IAS 16, 38) INDIAN GAAP (AS 6, 10, 26)Depreciation Useful Life Higher of useful life or schedule XIVAnnual Review Useful life, Depreciation Not Required Method , Residual ValueMajor Repair and Capitalized Treated as ExpensesMaintenanceRevaluation Every Year which opts for Not Required revaluation modelIntangible Assets • May have indefinite life • No indefinite life • No amortization • Amortized in 10 years • May be revalued if • No Revaluation active market exists