The document discusses the challenges of converting to IFRS for banks in India. It provides an overview of IFRS and the timeline for convergence in India. Banks with a net worth over 300 crores must converge their opening balance sheet as of April 1, 2013. Preparing the opening IFRS balance sheet involves recognizing all IFRS-compliant assets and liabilities, derecognizing any non-compliant items, and properly classifying everything. The document outlines the conversion process and comparative requirements under IFRS.
International Financial Reporting Standards (IFRS) are designed as a common global language for business affairs so that company accounts are understandable and comparable across international boundaries.
IFRS were issued by the Board of the International Accounting Standards Committee (IASC), known as International Accounting Standard Board(IASB).
International Financial Reporting Standards, commonly called IFRS, are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board
International Financial Reporting Standards (IFRS) are designed as a common global language for business affairs so that company accounts are understandable and comparable across international boundaries.
IFRS were issued by the Board of the International Accounting Standards Committee (IASC), known as International Accounting Standard Board(IASB).
International Financial Reporting Standards, commonly called IFRS, are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board
International Financial Reporting Standards (IFRS)AbhirajSingh67
ย
Accounting for Managers
International Financial Reporting Standards(IFRS) โ Meaning or Definitions
Frameworks for IFRS
Importance
Advantages & Disadvantages
Requirements of the IFRS
IFRS originated in the European Union, with the intention of making business affairs and accounts accessible across the continent. The idea quickly spread globally, as a common language allowed greater communication worldwide.
International Financial Reporting Standards (IFRS)AbhirajSingh67
ย
Accounting for Managers
International Financial Reporting Standards(IFRS) โ Meaning or Definitions
Frameworks for IFRS
Importance
Advantages & Disadvantages
Requirements of the IFRS
IFRS originated in the European Union, with the intention of making business affairs and accounts accessible across the continent. The idea quickly spread globally, as a common language allowed greater communication worldwide.
Generally Accepted Accounting Principles are those guidelines which gives clarity to the financial statements and protect the interest of the share holders and other stake holders of the firm.
BASEL CORE PRINCIPLES FOR EFFECTIVE BANKING SUPERVISION DETAILED ASSESSMENTJalaj Jain
ย
The Reserve Bank of India (RBI) is to be commended for its tightly controlled
regulatory and supervisory regime, consisting of higher than minimum capital
requirements, frequent, hands-on and comprehensive onsite inspections, a conservative
liquidity risk policy and restrictions on banksโ capacity to take on more volatile
exposures. The Indian banking system remained largely stable during the global financial
crisis. Since then, the government of India and RBI have taken additional measures to
enhance the soundness and resilience of the banking system, such as the establishment of a
Financial Stability and Development Council (FSDC), the implementation of a
countercyclical provisioning regime, and the development of a roadmap for the introduction
of a holding company structure.
This is a short article that I have made for Ind AS. I tried to do it in my own language but I have completed it with the help of internet and praveen sharma sir.
IFRS in India - RSM India publication (pre 2010)RSM India
ย
This book, published (before 2010) by RSM India group, intended to provide its readers a broad understanding of IFRS requirements in India and some key differences between IFRS and Indian Accounting Standards.
Improving profitability for small businessBen Wann
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In this comprehensive presentation, we will explore strategies and practical tips for enhancing profitability in small businesses. Tailored to meet the unique challenges faced by small enterprises, this session covers various aspects that directly impact the bottom line. Attendees will learn how to optimize operational efficiency, manage expenses, and increase revenue through innovative marketing and customer engagement techniques.
LA HUG - Video Testimonials with Chynna Morgan - June 2024Lital Barkan
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Have you ever heard that user-generated content or video testimonials can take your brand to the next level? We will explore how you can effectively use video testimonials to leverage and boost your sales, content strategy, and increase your CRM data.๐คฏ
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Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujaratโs DholeraAvirahi City Dholera
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The Tata Group, a titan of Indian industry, is making waves with its advanced talks with Taiwanese chipmakers Powerchip Semiconductor Manufacturing Corporation (PSMC) and UMC Group. The goal? Establishing a cutting-edge semiconductor fabrication unit (fab) in Dholera, Gujarat. This isnโt just any project; itโs a potential game changer for Indiaโs chipmaking aspirations and a boon for investors seeking promisingย residential projects in dholera sir.
Visit : https://www.avirahi.com/blog/tata-group-dials-taiwan-for-its-chipmaking-ambition-in-gujarats-dholera/
Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
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Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
"๐ฉ๐ฌ๐ฎ๐ผ๐ต ๐พ๐ฐ๐ป๐ฏ ๐ป๐ฑ ๐ฐ๐บ ๐ฏ๐จ๐ณ๐ญ ๐ซ๐ถ๐ต๐ฌ"
๐๐ ๐๐จ๐ฆ๐ฌ (๐๐ ๐๐จ๐ฆ๐ฆ๐ฎ๐ง๐ข๐๐๐ญ๐ข๐จ๐ง๐ฌ) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
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Sports events - Golf competitions/billiards competitions/company sports events: dynamic and challenging
โญ ๐ ๐๐๐ญ๐ฎ๐ซ๐๐ ๐ฉ๐ซ๐จ๐ฃ๐๐๐ญ๐ฌ:
โข 2024 BAEKHYUN [Lonsdaleite] IN HO CHI MINH
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โขCHILDREN ART EXHIBITION 2024: BEYOND BARRIERS
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โข Super Show 9 in HCM with Super Junior
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โข Korean Vietnam Partnership - Fair with LG
โข Korean President visits Samsung Electronics R&D Center
โข Vietnam Food Expo with Lotte Wellfood
"๐๐ฏ๐๐ซ๐ฒ ๐๐ฏ๐๐ง๐ญ ๐ข๐ฌ ๐ ๐ฌ๐ญ๐จ๐ซ๐ฒ, ๐ ๐ฌ๐ฉ๐๐๐ข๐๐ฅ ๐ฃ๐จ๐ฎ๐ซ๐ง๐๐ฒ. ๐๐ ๐๐ฅ๐ฐ๐๐ฒ๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐ ๐ญ๐ก๐๐ญ ๐ฌ๐ก๐จ๐ซ๐ญ๐ฅ๐ฒ ๐ฒ๐จ๐ฎ ๐ฐ๐ข๐ฅ๐ฅ ๐๐ ๐ ๐ฉ๐๐ซ๐ญ ๐จ๐ ๐จ๐ฎ๐ซ ๐ฌ๐ญ๐จ๐ซ๐ข๐๐ฌ."
Memorandum Of Association Constitution of Company.pptseri bangash
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www.seribangash.com
A Memorandum of Association (MOA) is a legal document that outlines the fundamental principles and objectives upon which a company operates. It serves as the company's charter or constitution and defines the scope of its activities. Here's a detailed note on the MOA:
Contents of Memorandum of Association:
Name Clause: This clause states the name of the company, which should end with words like "Limited" or "Ltd." for a public limited company and "Private Limited" or "Pvt. Ltd." for a private limited company.
https://seribangash.com/article-of-association-is-legal-doc-of-company/
Registered Office Clause: It specifies the location where the company's registered office is situated. This office is where all official communications and notices are sent.
Objective Clause: This clause delineates the main objectives for which the company is formed. It's important to define these objectives clearly, as the company cannot undertake activities beyond those mentioned in this clause.
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Liability Clause: It outlines the extent of liability of the company's members. In the case of companies limited by shares, the liability of members is limited to the amount unpaid on their shares. For companies limited by guarantee, members' liability is limited to the amount they undertake to contribute if the company is wound up.
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Capital Clause: This clause specifies the authorized capital of the company, i.e., the maximum amount of share capital the company is authorized to issue. It also mentions the division of this capital into shares and their respective nominal value.
Association Clause: It simply states that the subscribers wish to form a company and agree to become members of it, in accordance with the terms of the MOA.
Importance of Memorandum of Association:
Legal Requirement: The MOA is a legal requirement for the formation of a company. It must be filed with the Registrar of Companies during the incorporation process.
Constitutional Document: It serves as the company's constitutional document, defining its scope, powers, and limitations.
Protection of Members: It protects the interests of the company's members by clearly defining the objectives and limiting their liability.
External Communication: It provides clarity to external parties, such as investors, creditors, and regulatory authorities, regarding the company's objectives and powers.
https://seribangash.com/difference-public-and-private-company-law/
Binding Authority: The company and its members are bound by the provisions of the MOA. Any action taken beyond its scope may be considered ultra vires (beyond the powers) of the company and therefore void.
Amendment of MOA:
While the MOA lays down the company's fundamental principles, it is not entirely immutable. It can be amended, but only under specific circumstances and in compliance with legal procedures. Amendments typically require shareholder
Attending a job Interview for B1 and B2 Englsih learnersErika906060
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It is a sample of an interview for a business english class for pre-intermediate and intermediate english students with emphasis on the speking ability.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
What is the TDS Return Filing Due Date for FY 2024-25.pdfseoforlegalpillers
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It is crucial for the taxpayers to understand about the TDS Return Filing Due Date, so that they can fulfill your TDS obligations efficiently. Taxpayers can avoid penalties by sticking to the deadlines and by accurate filing of TDS. Timely filing of TDS will make sure about the availability of tax credits. You can also seek the professional guidance of experts like Legal Pillers for timely filing of the TDS Return.
The Parable of the Pipeline a book every new businessman or business student ...
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Ifrs presentation slides
1. IFRS : Conversion Challenges and
1 Implementation Approach for Banks in
India
Vinay Kaushik & Co.
Chartered Accountants
Second Floor, Meridian Tower-II
Indira Gandhi Marg, Udhna Darwaja,
Surat-395003, Gujarat-INDIA
+91-261-2333527
+91-261-6534665
+91-9227907024
Email: ca@vinaykaushik.comCo.
Vinay Kaushik &
IFRS : Conversion Challenges and Implementation Approach Website: www.vinaykaushik.com
for Banks in India Chartered Accountants
www.vinaykaushik.com
2. 2 Over View
This presentation aims to provide increased awareness towards the
Challenges of IFRS convergence and the need for developing a roadmap
to facilitate implementation through advance planning.
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
3. 3 Introduction
The International Accounting Standard Board (IASB) is
โ a stand alone privately funded accounting standard setting body
โ established to develop global standards of financial reporting.
โ successor to the International Accounting Standard Committee (IASC)
Since 2001, the standards that the IASB develops and approves have
been known as International Financial Reporting Standards (IFRS)
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
4. 4
4 Introduction
The term IFRS comprises:-
โ IFRS issued by IASB;
โ IAS issued by IASC;
โ the interpretations issued by the Standing Interpretations Committee
(SIC); and
โ the International Financial Reporting Interpretations Committee
(IFRIC) of IASB.
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
5. 5 Introduction
Authority to formulate Accounting Standars in India:
โ The Accounting Standards Board of the Institute of Chartered
Accountants of India ('ICAI') was constituted on 21 April, 1977, to
formulate Accounting Standards applicable to Indian enterprises.
โ ICAI, being a full-fledged member of the International Federation of
Accountants (IFAC), while formulating the Accounting Standards
(ASs), the ASB gives due consideration to IASs issued by IASC and
IFRSs issued by the IASB.
โ ICAI try to integrate them, to the extent possible. However, where
departure from IFRS is warranted keeping in view the Indian
conditions, the ASs have been modified to that extent.
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
6. 6 Introduction
Authorities requiring for compliance with the Accounting Standards
issued by ICAI:
โ Ministry of Corporate Affairs in case of companies;
โ The Reserve Bank of India (RBI) in case of banks;
โ The Insurance Regulatory and Development Authority (IRDA) in case
of insurance companies; and
โ The Securities and Exchange Board of India (SEBI) in case of all listed
companies.
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
7. 7 Benefits of IFRS Convergence
โ IFRS significantly improves the comparability of entities.
โ IFRS gives better access to global capital markets and reduces the
cost of capital.
โ IFRS provides impetus to cross-border acquisition.
โ Improvement in quality and consistency of information, avoid
multiple reporting and reduce cost of the finance function.
โ IFRS balance sheet is closer to economic value
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
8. 8 IFRS in India
ICAI has decided to follow a convergence approach to IFRS
implementation rather than adoption of IFRS as issued by the IASB due
to various reasons as follows:
โ The legal and the regulatory environment prevailing in the country.
โ Alternative accounting choices that are permitted in IFRS may be
incompatible with the local requirements and considerations within
specified sectors and industries.
โ The current level of preparedness within the country for
implementation of IFRS.
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
9. 9 Timelines for Convergence
Phase I - 1 April 2011*
a) Companies which are Part of NSE - Nifty 50.
b) Companies which are part of BSE - Sensex 30.
c) Companies whose shares or other securities are listed on stock
exchanges outside India.
d) Companies, whether listed or not, which have a net worth in excess
of `1,000 crores.
Phase II - 1 April 2013*
The companies, whether listed or not, having a net worth exceeding
` 500 crores but not exceeding `1,000 crores.
Phase III - 1 April 2014*
Listed companies which have a net worth of `500 crores or less.
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
10. 10 Deadline for UBC
RBI has vide circular no.25/12.05.001/2011-12, dated 6th March, 2012,
made it clear that all urban co-operative bank (UCB) having:
โ Net worth in excess of `300 crore would, in the preparation of their
accounts, converge with IFRS in tendem with the time schedule given
for scheduled commercial banks and accordingly convert their
opening balance sheet as on 1st April, 2013 in compliance with IFRS
converged IAS.
โ Net worth in excess of `200 crore but not exceeding `300 crore
would convert their opening balance sheet as on 1st April, 2014 in
compliance with IFRS converged IAS.
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
11. 11 Net worth compution
The MCA press release dated May 5, 2010, clarifies in Issue 8 that net
worth will be calculated as:
Share Capital XXX
Add : Add : Reserves XXX
Total A XXX
Less: Less: Revaluation Reserve XXX
Miscellaneous Expenditure XXX
Debit Balance of the P&L Account XXX
Total B XXX
Networth A-B XXX
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
12. 12 Underlying Assumptions
Accrual basis:
It is assumed that the effects of transactions and other events are
recognised when they occur (and not as cash or its equivalent is received
or paid) and they are recorded in the accounting records and reported in
the financial statements of the periods to which they relate
Going concern:
It is assumed that the entity has neither the intention nor the need to
liquidate or curtail materially the scale of its operations.
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
13. Qualitative characteristics
13
of IFRS financial statements
The four principal qualitative characteristics are:
โ Understandability
โ Relevance
โ Reliability
โ Comparability
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
14. 14 IFRS financial statements
Complete set of IFRS Financial Statements comprises of:
โ A statement of financial position as at the end of the period;
โ A statement of comprehensive income for the period;
โ A statement of changes in equity for the period;
โ A statement of cash flows for the period;
โ Notes, comprising a summary of significant accounting policies,
and other explanatory information; and
โ A statement of financial position as at the beginning of the earliest
comparative period.
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
15. 15 Comparative Position
IAS No. And Title Corresponding Indian GAAP
IAS 1. Presentation of financial AS 1
Statements
IAS 2. Inventories AS 2 (Revised)
IAS 7. Statement of Cash Flow AS 3 (Revised)
IAS 8. Accounting Policies change AS 5 (Revised)
in Accounting Estimates and Errors
IAS 10. Events after the Reporting AS 4 (Revised)
Period
IAS 11. Construction Contracts AS 7 (Revised)
IAS 12. Income Taxes AS 22
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
16. 16 Comparative Position
IAS / IFRS No. And Title Corresponding Indian GAAP
IAS 16. Property Plant and AS10 and AS 6 (Revised)
Equipment
IAS 17. Leases AS 19
IAS 18. Revenue AS 9
IAS 19. Emplyee Benefits AS 15
IAS 20. Accounting for Government AS 12
Grants and Disclosure of
Governmant Assistance
IAS 21. The effect of changes in AS 11 (Revised)
Foreign Exchange Rates
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
17. 17 Comparative Position
IAS / IFRS No. And Title Corresponding Indian GAAP
IAS 23. Borrowing Costs AS 16
IAS 24. Related Party Disclosures AS 18
IAS 26. Accounting and Reporting AS under preparation by ICAI
by Retirement Benefit Plans
IAS 27. Consolidated and Separate AS 21
Financial Statement
IAS 28. Investments in Associates AS 23
IAS 29. Financial Reporting in Not Relevant for Indian Conditions
Hyperinflationary Economics
IAS 31. Interest in Joint Ventures AS 27
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
18. 18 Comparative Position
IAS / IFRS No. And Title Corresponding Indian GAAP
IAS 32. Financial Instruments AS 31 (Not mandatory at present)
Presentation
IAS 33. Earning per share AS 20
IAS 34. Interim Financial Reporting AS 25
IAS 36. Imparement of Assets AS 28
IAS 37. Provisions, Contingent AS 29
Liabilities and Contingent assets
IAS 38. Intangible Assets AS 26
IAS 39. Financial Instruments: AS 30 (Not Mandatory at present)
Recognition and Measurements
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
19. 19 Comparative Position
IAS / IFRS No. And Title Corresponding Indian GAAP
IAS 40. Investment Property Partly Covered by AS 13
IAS 41. Agriculture AS under preperation by ICAI
IFRS 1. First Time Adoption of IFRS Not relevant to India at present
IFRS2. Share based Capital AS under preperation by ICAI
IFRS3. Business Combination AS 14
IFRS4. Insurance Contracts AS under preperation by ICAI
IFRS 5. Non Current Assets held for AS 24
sale and discontinued operations
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
20. 20 Comparative Position
IAS / IFRS No. And Title Corresponding Indian GAAP
IFRS 6 Explanation for and Covered by Guidance Note on
evaluation of Mineral Resources Accounting for Oil and Gas
Producing Activities
IFRS 7. Financial Instruments AS 32 (Not mandatory at present)
Disclosure
IFRS 8. Operating Segments As 17
IFRS 9. Financial Instruments AS 30 (Not Mandatory at present)
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
21. 21 First Time Adoption of IFRS
โ FRS 1 sets out the procedures that a first-time adopter must follow
on first-time adoption of IFRS.
โ IFRS- 1 requires an entity to follow all the accounting standards in the
preparation and presentation of its financial statements which are
effective at the reporting date.For eg. an entity which carries out the
transition in 2009 has to comply with the standards effective 31st
December 2009.
โ IFRS 1 also permits an entity to apply a new IFRS that is not yet
mandatory if that standard allows early application.
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
22. 22 First Time Adoption of IFRS
โ The first-time adopter establishes its date of transition, which is
defined as the beginning of the earliest period for which an entity
presents full comparative information under IFRS in its first IFRS
financial statements.
โ At the date of transition the first-time adopter prepares an opening
statement of financial position. This is the starting point for its
accounting under IFRS.
โ In the opening statement of financial position, the first-time adopter
applies its IFRS accounting policies in recognising and measuring all
assets and liabilities, and if appropriate reclassifies items recognised
under previous generally accepted accounting principles (GAAP) as
another type of asset, liability or component of equity.
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
23. 23 First Time Adoption of IFRS
โ In preparing the opening statement of financial position, the first-
time adopter may choose the optional exemptions from retrospective
application.
โ The first-time adopter applies the mandatory exemptions in all
applicable cases.
โ A first-time adopter prepares reconciliations between previous GAAP
and IFRS, and discloses these reconciliations in its first IFRS financial
statements (and interim report, if applicable). The entity complies
with other note disclosures in IFRS 1 in addition to those required by
other IFRSs.
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
24. How Opening IFRS Balance
24
Sheet is Prepared
โ Recognise all assets and liabilities whose recognition is required
by IFRS
โ Derecognise assets and liabilities where recognition is not permited
by IFRS
โ Classify all assets and liabilities inaccordance with IFRS
โ Measure all recognised assets and liabilities in accordance with
applicable IFRS
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
25. 25 Impact of key differences
โ Currently, only listed Indian companies and banks are required to
prepare consolidated financial statements. Adoption of IFRS would
require all defined entities (which include large-sized entities that are
not listed on stock exchanges) to prepare and present consolidated
financial statements.
โ The accounting for acquisition is largely dependent on the form of the
acquisition. Under IFRS, all acquisitions are generally accounted for
using the purchase method whereby the purchase price is compared
to the fair value of all identifiable tangible assets, liabilities, contingent
liabilities and intangible assets of the acquired company, with the
excess being recognised as goodwill. This goodwill is not amortised,
but is assessed for impairment annually.
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
26. 26 Impact of key differences
โ Under Indian GAAP intangible assets are generally recognised only if
they are acquired separately. Under IFRS, intangible assets are
recorded either while accounting for acquisitions using the purchase
method, or when intangible assets are acquired separately.
โ Under Indian GAAP all intangible assets are amortised over their
useful lives (and tested for impairment) and there is a rebuttable
presumption that the useful life cannot exceed 10 years. IFRS
acknowledges that certain intangible assets may have indefinite
useful lives (for example, brands that demonstrate certain
characteristics) and accordingly, such intangible assets are not
amortised, but tested for impairment annually.
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
27. 27 Impact of key differences
โ Indian GAAP on share-based payment to employees (for example,
employee stock options) provides entities with a choice to either
adopt the intrinsic value method (under this employee stock options
are granted with an exercise price equal to the market price on the
grant date, no compensation cost is recognised) or the fair value
method. IFRS mandates the use of the fair value method, whereby
the fair value of the options is determined using an option pricing
model. This would usuall result in recognition of compensation cost
even if the options are in-the-money on the grant date.
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com
28. 28 Impact of key differences
โ IFRS require that a financial instrument should be classified in
accordance with the substance of the contractual agreement rather
than its legal form (substance over form). Thus, redeemable
preference share would be a financial liability and dividends on
redeemable preference shares are recognised as interest expense
under IFRS and impact the profits and loss for the year. This is
different from the Indian GAAP classification of redeemable
preference shares as equity and the related presentation of dividends
on such preference shares as appropriation of profits. This would
impact financial structures and debtequity ratios.
IFRS : Conversion Challenges and Implementation Approach
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29. 29 Impact of key differences
Under Indian GAAP, long-term investments are generally carried at
cost, less impairment; and current investments are carried at lower of
cost or market value.
IFRS requires that investments be categorised into three categories:
โ Trading or investment carried at fair value,
โ Held-to-maturity and
โ Available-for-sale.
Except for held-tomaturity investments, all investments are carried at fair
value. Held-to-maturity investments are carried at amortised cost.
IFRS : Conversion Challenges and Implementation Approach
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30. 30 Impact of key differences
โ Unlike Indian standards, where prior period items that represent
correction of errors; and cumulative impact of change in accounting
policies, are recorded as an adjustment in the current period, IFRS
generally require accounting policy changes and correction of prior
period errors to be made by adjusting opening retained earnings and
restating comparatives. This is a relatively new concept for preparers,
auditors, users, regulators, investors and analysts in India (although
such restatements are required in certain limited situations that
involve initial public offerings) and would require companies to
clearly communicate with and educate investors and other users to
highlight the impact of this change.
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31. Presentation of Financial
31
Statements
โ Financial statements presentation formats under Indian GAAP are
primarily driven by regulatory requirements specified in the Indian
Companies Act and other regulation for specific industries (for
example, banking and insurance).
โ Under IFRS, IAS 1 sets out detailed requirements for presentation of
financial statements, including their structure and minimum
requirements for content.
โ Under IFRS, in addition to the balance sheet, income statement and
cash flow statement, a Statement of Changes in Equity (SOCIE) with
supplimentry notes are required.
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32. Critical success factor for
32
IFRS convergence
Following are the common critical success factors identified for Indian
entities for successful IFRS conversion projects:
โ Strategy
โ Leadership
โ Communication
โ Resources
โ Knowledge
โ Project Management
โ Time
IFRS : Conversion Challenges and Implementation Approach
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33. 33 Project Management
Complex tasks are easier when divided into manageable pieces. IFRS
conversion projects can be broken down into key phases.
Phase 1 Phase 2 Phase 3
Assess Impact and Learn and build the Roll out and Parallel
Plan Conversion tools run
Assets Design Implement
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34. 34 Project Management
Asset Impect and Plan Conversion:
โ Mobile Core Team;
โ Impact assessment;
โ Resource Budget;
โ IFRS Treaning needs assessment;
โ Management decision; and
โ Plan Conversion
IFRS : Conversion Challenges and Implementation Approach
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35. 35 Project Management
Learn and build the Tools:
โ Mobile finance function and informational Technology;
โ IFRS training detailed plan;
โ Make policies and financial statement reporting package; and
โ Convert system and budgets
IFRS : Conversion Challenges and Implementation Approach
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36. 36 Project Management
Roll out parallel run:
โ Mobile business and parallel run;
โ April 1, 2012 balance sheet;
โ 2012-2013 financial statements; and
โ Manage business on IFRS Basis
IFRS : Conversion Challenges and Implementation Approach
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37. 37
CA. Vinay Kaushik
B.Com., F.C.A., D.E.M., DISA(ICAI),
DIRM(ICAI), Cer. IFRS (CICA)
IFRS : Conversion Challenges and Implementation Approach
Vinay Kaushik & Co.
for Banks in India Chartered Accountants
www.vinaykaushik.com