This document summarizes a research paper on the effect of adopting Ind-AS and IFRS standards on financial statement presentation in India. The paper discusses major changes such as including a statement of comprehensive income, changes in equity statement presentation, and fair value measurement. It analyzes financial statements of Intertek Group prepared under IFRS. The study finds adoption will increase transparency but some differences from IFRS remain concerns. Further research on revenue recognition, assets, and liabilities is needed as companies begin preparing statements under Ind-AS.

1. A NEW DAWN IN
FINANCIAL REPORTING
IN INDIA
A STUDY OF THE EFFECT OF IND-AS AND IFRS ON THE
PRESENTATION OF FINANCIAL STATEMENTS
Name of the Researcher:
Tanuj Gupta
Name of the Institution:
St. Xavier’s College,
Kolkata
Under the guidance of
Prof. Subir Srimani
(Head of Department,
Accounting and
Finance, St. Xavier’s
College, Kolkata)

2. Literature Review
• Various articles as well as books have been written on the matter
concerning AS and its migration into Ind-AS and eventually IFRS.
• Some of the most informative literature in this regard comes from
publications by the “Big 4” firms and CA Rajkumar Adukia in his
publication “Ind AS and IFRS” too mentions the various changes
that are set to come about as a result of this. In “Framework for the
Preparation and Presentation of Financial Statements in
accordance with Indian Accounting Standards”, the ICAI too has
presented an idea of clarity about financial statements under the
new paradigm.
• However, the present literature seems insufficient to answer all
questions regarding the preparation of financial statements under
the Ind-AS regime as there is still a lack of clarity on some major
implementation issues.
2

3. Objectives of Study
• To answer the key question- “Why convergence to
IFRS? And what does it mean?”
• To understand the major changes proposed in
preparation and presentation of financial statements with
the implementation of Ind-AS
• To discuss the IFRS adoption procedure in India
• To discuss the utility for India in adopting IFRS
• To discuss the problems faced by the stakeholders in the
process of adoption of IFRS in India
• To discuss the ways through which these problems can
be addressed
3

4. Research Methodology
• Data Collection: Collecting the bare standards, guidance
notes to the standards as well as various publications
regarding the use of IFRS, AS and Ind-AS.
• Data Analysis: Data analysis was done keeping in mind
the various aspects and interpretations of the standards
as well as the various notes issued by authorities on the
same.
• A study of the the rationale behind Accounting Standards
and the need for convergence to IFRS
4

5. Limitation of Study
• Since Ind-AS is yet to be implemented in full flow, a practical
case study was difficult to find.
• Considering the vastness of all body of the Accounting
Standards, time and effort expended on its study may not
have been sufficient to reproduce within a few pages
• Presentation of Financial Statements is only one aspect of the
sea of changes that are being bought about in Financial
reporting in India. A thorough analysis of each of these
components is also necessary
However, keeping all these limitations in mind, this study looks to
adequately address one of the most important aspects of IFRS
convergence in India which will be how financial statements
would appear under the new regime.
5

6. A Glance through Contents
• Theoretical Aspect of Proposed Study
• The Conceptual Framework for Financial Reporting
• Basis of Preparation of Financial Statements
• Grouping of the standards
• An Overview of Major Changes As A Result Of Ind-
AS Implementation
• Case Study: Intertek Group PLC
• Overview of the Project
• Findings and Conclusions drawn
6

7. Theoretical Aspect of
Proposed Study
• Historical Background
• Why convergence with IFRS?
o Better Access to Global Capital Markets
o Easier Global Comparability
o Easy Cross Border Listing
o Better Quality of Financial Reporting
o Boon for Multinational Group Entities
o New Opportunities for the professionals
7

8. Conceptual Framework
for Financial Reporting
• The objective of financial reporting
o To provide financial information
o To assess an entity‘s prospects for future net cash inflows
o To provide information regarding the liquidity of the entity
• The qualitative characteristics of useful financial information
o Relevance and Faithful Representation. Comparability, Verifiability and
Timeliness
• The definition, recognition and measurement of the elements
from which financial statements are constructed
• Concepts of capital and capital maintenance
8

9. Basis of Presentation of
Financial Statements
• Fair presentation and Compliance with IFRSs
• Going Concern
• Accrual basis of accounting
• Consistency of Presentation
• Materiality and Aggregation
• Offsetting
• Comparative Information
• Consistency of preparation
• Frequency of reporting
9

10. Grouping of the Standards
10
Ind AS Ind AS name Corresponding IFRS Existing
ASIAS/IFRS IFRIC SIC
Group Reporting and Business Combination
Ind AS 103 Business Combination IFRS 3 - - AS 14
Ind AS 27 Consolidated and Separate Financial
Statements
IAS 27 - SIC
12
AS 21
Ind AS 28 Investments in Associates IAS 28 - - AS 23
Ind AS 31 Interests in Joint Ventures IAS 31 - SIC
12
AS 27
Expenses and Liabilities
Ind AS 102 Share based payment IFRS 2 - - -
Ind AS 12 Income Taxes IAS 12 - SIC
21, 25
AS 22
Ind AS 19 Employee Benefits IAS 19 IFRIC 14 - AS 15
Ind AS 37 Provisions, Contingent Liabilities and
Contingent Assets
IAS 37 IFRIC
5,6
- AS 29

11. Grouping of the Standards (Contd…)
11
Asset Based Standards
Ind AS 105 Non-Current Assets Held for Sale and
Discontinued Operations
IFRS 5 - - AS 24
Ind AS 106 Exploration for and Evaluation of Mineral
Resources
IFRS 6 - - -
Ind AS 2 Inventories IAS 2 - - AS 2
Ind AS 16 Property, Plant and Equipment IAS 16 IFRIC 1 - AS 6, 10
Ind AS 17 Leases IAS 17 IFRIC 4 SIC
15, 27
AS 19
Ind AS 36 Impairment of Assets IAS 36 - - AS 28
Ind AS 38 Intangible Assets IAS 38 - SIC
32
AS 26
Ind AS 40 Investment Property IAS 40 - - -
Ind AS 107 Financial Instruments: Disclosures IFRS 7 - - AS 32
Ind AS 32 Financial Instruments: Presentation IAS 32 IFRIC 2 - AS 31
Ind AS 39 Financial Instruments: Recognition and
Measurement
IAS 39 IFRIC 9,
16,19
- AS 13,30

12. Grouping of the Standards (Contd…)
12
Income
Ind AS 11 Construction Contracts IAS 11 IFRIC 12 SIC 29 AS 7
Ind AS 18 Revenue IAS 18 IFRIC 13,
15, 18
SIC 31 AS 9
Financial Instruments
Ind AS
107
Financial Instruments: Disclosures IFRS 7 - - AS 32
Ind AS 32 Financial Instruments: Presentation IAS 32 IFRIC 2 - AS 31
Ind AS 39 Financial Instruments: Recognition and
Measurement
IAS 39 IFRIC 9,
16,19
- AS 13,
30
Disclosure based standards
Ind AS 108 Operating Segments IFRS 8 - - AS 17
Ind AS 24 Related Party Disclosures IAS 24 - - AS 18

13. 13
Grouping of the Standards (Contd…)
Financial Reporting
Ind AS 1 Presentation of Financial Statements IAS 1 - - AS 1
Ind AS 7 Statement of Cash Flows IAS 7 - - AS 3
Ind AS 8 Accounting Policies, Changes in Accounting
Estimates and Errors
IAS 8 - - AS 5
Ind AS 10 Events after the Reporting Period IAS 10 IFRIC 17 - AS 4
Ind AS 21 The Effects of Changes in Foreign Exchange
Rates
IAS 21 - - AS 11
Ind AS 29 Financial Reporting in Hyperinflationary
Economies
IAS 29 IFRIC 7 - -
Ind AS 33 Earnings per Share IAS 33 - - AS 20
Ind AS 34 Interim Financial Reporting IAS 34 IFRIC 10 - AS 25
Ind AS 27 Consolidated and Separate Financial
Statements
IAS 27 - SIC 12 AS 21
Ind AS 28 Investments in Associates IAS 28 - - AS 23
Ind AS 31 Interests in Joint Ventures IAS 31 - SIC 12 AS 27
Ind AS 103 Business Combination IFRS 3 - - AS 14
Ind AS 27 Consolidated and Separate Financial
Statements
IAS 27 - SIC 12 AS 21
Ind AS 28 Investments in Associates IAS 28 - - AS 23
Ind AS 31 Interests in Joint Ventures IAS 31 - SIC 12 AS 27

14. Major changes:
Components of financial statements
14
AS IFRS Ind-AS
The components of
financial statements are:
a. balance sheet;
b. statement of profit and
loss;
c. cash flow statement;
d. explanatory notes
including summary of
accounting policies.
A complete set of financial
statements under IFRS
comprises:
a. a statement of financial
position;
b. a statement of
comprehensive income;
c. a statement of cash flows;
d. a statement of changes in
equity; and notes including
summary of accounting
policies and explanatory
notes
A complete set of financial
statements under Ind AS
comprises:
a. a balance sheet as at the end
of the period (including
statement of changes in
equity which is presented as
a part of the balance sheet);
b. statement of profit and loss;
c. a statement of cash flows;
d. notes including summary of
accounting policies and
other explanatory
information

15. AS IFRS Ind-AS
Fair presentation requires
compliance with the applicable
requirements of the Companies
Act, 2013 and the other
regulatory requirements and
the application of the
qualitative characteristics of the
Accounting Standards
Framework.
Departures from Accounting
Standards or Companies Act,
2013 are prohibited unless
permitted by other regulatory
framework.
Fair presentation requires faithful
representation of the effects of the
transactions, other events and
conditions in accordance with the
definitions of and recognition
criteria for assets, liabilities,
income and expenses set out in the
Framework.
In extremely rare circumstances in
which management concludes that
compliance with requirements of a
Standard or Interpretation is so
misleading, it may depart from the
Standard or the Interpretation.
Reasons for departure are required
to be disclosed.
Same as that in
IFRS
15
Major changes:
Fair Presentation

16. AS IFRS Ind-AS
Statement of profit and
loss is the Indian
GAAP equivalent of
separate income
statement under IFRS.
Some items such as
revaluation surplus
which are treated as
‘other comprehensive
income’ under IFRS/
Ind AS are recognised
directly in
equity under Indian
GAAP.
Includes all items of income and
expense including:
a. Components of profit or loss and
b. Other comprehensive income, for
example revaluation reserve.
Items are presented either :
a. in a single statement or;
b. in a separate statement displaying
components of profit or loss and a
separate statement of
comprehensive income beginning
with profit or loss and displaying
components of other
comprehensive income.
An entity is
required to present
all items of income
and expense
including
components of
other
comprehensive
income in a period
in a single
statement of profit
and loss.
16
Major changes:
Statement of Comprehensive Income

17. AS IFRS Ind-AS
A statement of
changes in equity
is not required.
Movements in
share capital,
retained earnings
and other reserves
are to be
presented in the
notes to accounts.
A statement of changes in equity is presented
showing:
a. the total comprehensive income for the period
b. effects of retrospective application or restatement
on each component of equity
c. for each component of equity, a reconciliation
between opening and closing balances,
separately disclosing changes resulting from:
(i) profit or loss;
(ii) each item of other comprehensive income and ;
(iii)transactions with owners in their capacity as
owners, showing separately contributions by and
distributions to owners and changes in
ownership interests in subsidiaries that do not
result in a loss of control.
A statement of
changes in
equity is
presented as
part of balance
sheet.
The statement
of changes in
equity
Contains
information
which is similar
to that under
IFRS.
17
Major changes:
Statement of Changes in Equity

18. 18
Major changes:
Estimation Uncertainty
AS IFRS Ind-AS
AS 1 does not specifically
require an entity to
disclose information
about the assumptions
that it makes about the
future and other major
sources of estimation
uncertainty at the end of
the reporting period
though other standards
may require certain
disclosures of the same.
Requires disclosure of key sources
of estimation uncertainty at the end
of the reporting period, that have a
significant risk of causing a material
adjustment to the carrying amounts
of assets and liabilities within the next
financial year.
The nature of the uncertainty and the
carrying amounts of such assets and
liabilities at the end of the reporting
period are required to be disclosed
Same as that in
IFRS

19. 19
Major changes:
Measurement Basis
AS IFRS Ind-AS
Indian GAAP is broadly
in line with Ind-AS.
However, it disregards
fair valuation/
discounting in some
situations, for example,
provisions are not
allowed to be discounted
and fair value gains on
current investments held-
for-trading are not
allowed to be recognized
IFRS recognizes four
measurement bases, viz., historical
cost, current cost, net realizable
value and present value.
Key exceptions to the
historical cost
measurement in Ind-
AS include fair
valuation of financial
instruments,
revaluation of
property, plant and
equipment and
intangible assets and
impairment of assets

20. A Brief Analysis of the Changes
• Other key changes include consolidated financial statements for all
entities, compulsory cash flow statement for all Ind-AS applicable
companies, an “order of liquidity presentation” as well as changes to
capital management disclosures.
• IFRS allows the profit and loss account to be presented either as one
statement (statement of comprehensive income) or as two statements
(as profit and loss account and a statement of other comprehensive
income). Ind AS allows only the one statement approach.
• IFRS requires the statement of changes in equity to be presented as a
separate statement. Ind AS requires the statement of changes in equity
to be shown as a part of the balance sheet.
• IAS 1 requires an entity to present an analysis of expenses recognised
in profit or loss using a classification based on either their nature or
their function within the equity. Ind AS 1 requires only nature-wise
classification of expenses.
20

21. Case Study
A review of the Financial Reports of Intertek Group PLC
prepared under IFRS
21

22. Brief Background
• Intertek Group plc. is a multinational inspection, product
testing and certification company headquartered in London,
United Kingdom.
• It is listed on the London Stock Exchange and is a constituent
of the FTSE 100 Index.
• Intertek has over 36,000 people in 1,000 locations in over 100
countries.
• The Group is characterised by a diverse geographic footprint,
represented by a large number of medium and small sized
operations. The aggregate risk is taken into account when
during final analytical procedures over the Group financial
statements
• Intertek prepares its annual reports on the basis of IFRS as
adopted by the EU
22

23. Consolidated Income Statement
23

24. Consolidated Statement of
Comprehensive Income
24

25. Consolidated Statement of Changes
in Equity
25

26. Findings and Conclusions
drawn
• While there may not exactly be a sea change in terms of what
the financial statements are representing, there will still be a
substantial difference in the approach to them following
implementation
• The presentation of financial statements as through Ind-AS is
one that will lead to more transparency and clarity
• Some major areas of concern will continue to be the
significant carve outs that Ind AS has in comparison to IFRS .
• There is hope that the MCA will consistently revise the
standards to bring them even closer to IFRS norms
26

27. Area of further research
• There are many more areas with a lot of potential for
research such as the impact of Ind-AS on investments,
assets and liabilities, recognition of revenue and many
other key areas related closely to financial reporting.
• It is also interesting to note that once companies begin to
prepare their Annual financial statements as per Ind-AS
there will be many more interpretations as well as
varying presentations.
27

28. Acknowledgements
• This project would be incomplete without the support and help of
Rev. Fr. Felix Raj, Principal, St. Xavier’s College, Kolkata, Rev Fr.
Dominic Savio, Rector and Vice Principal, St. Xavier’s College,
Kolkata and Prof. Swapan Banerjee, Dean, St. Xavier’s College
Kolkata.
• A heartfelt token of gratitude to Prof. Subir Srimani, Head of Dept.,
Accounting & Finance, St. Xavier’s College, Kolkata who has been a
guiding light and made this project a possibility.
• A thank you to all the support staff and fellow students who have
helped to create this as without them this project would not have
seen completion.
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