IFRS

1. IFRS:
Why is IFRS needed when we have a certain set of accounting standards issued in our country? How will this change
the list of our already existing accounting standards? Is this form of accounting standards easy to apply? Are the
concepts applied same as ours? How easy is it to adopt to the international accounting standards techniques?
International financial reporting standards or IFRS is a statutory body which issues accounting standards adopted by
the international accounting standards body. With the rising global market stature of every enterprise, an increased
need for the common set of accounting standards was felt by all for an uncomplicated way of trade and commerce.
Benefits of IFRS
• Global exposure to the Indian market: India is already a global market player. Above that the IFRS system
will lead to a more detailed exposure to the global markets.
• Tedious process can be avoided: This will also help the Indian entities to avoid going through the stringent
and tedious form filling process in order to follow the accounting standards principles.
• Lower accountant’s fees and funds: The international accounting standards in a way will lower the
accountant’s fees and funds allocation would be more with quick response to the capital markets.
• Single platform: The accounting techniques adopted internationally will not only lower the burden but also
bring all the global market enterprises under a single platform where all the financial discrepancies and issues can be
dealt with and resolved easily and that too at a quicker pace.
• Targets globally: The Indian market thereafter has the permission to issue targets to be achieved according to
the global market instead of the perspective prevalent nationally.
• Eliminate multiple reports: The international accounting standards when followed by all, will eliminate
multiple reporting systems and various stock exchanges files to be filed.
IFRS vs. Indian accounting standards
The international and Indian accounting standards vary and differ from each other in various aspects.
• The Indian accounting standards are generally rule based wherein the rules guide how to record a
transaction. However, the international accounting standards are principle based.
• The Indian accounting standards lay more emphasis to laws over standards whereas the international
accounting standards lay more emphasis to the standards over laws.
• The companies following Indian accounting standards follow their defined format while presenting financial
statements. However, the international accounting standards have no prescribed format. Although, the assets are to be
divided into current and non-current categories.
• The Indian Company’s Act while following the Indian standards has issued certain depreciation rates on
tangible assets to be followed by the companies. However, the international accounting standards levies an annual
charge based on the life of assets.
The above mentioned differences between both the standards policies lead to covering each aspect of the accounts in a
different manner. The IFRS accounting standards can be seen affecting the Indian standards both positively and
negatively. How to tackle the differences between the two standards is something to ponder over.