A Conceptual View of Convergence of Accounting Standards with IFRS

1. A Conceptual Paper
Nithin Venugopal
Research Scholar
P.G & Research Dept. Of Commerce
St.Thomas College
Kozhencherry

2. A set of international accounting
standards stating how a particular type
of transaction and other events should
be reported in financial statements.
These are issued by International
Accounting Standards Board (IASB)

3. IFRS is often confused with
International Accounting
Standards (IAS) which are older
standards that have been replaced
by IFRS. IAS were issued from 1973
till 2000.

4. A single set of accounting standards would
enable internationally to standardize
training & assure better quality on a global
screen.
 It would be beneficial to regulators as the
complexity associated with needing to
understand various reporting regimes
would be reduced.

5.  To Investors
 To Industries
 To Accounting Professionals
 Improves inter unit/inter firm
comparisons easy
 Acceptance of financial statements
globally

6.  Convergence of Ind. AS with IFRS will not
be difficult because we are following good
standards of accounting.
 Every corporate has to take necessary step
in understanding the new standards,
training the staff to equip with the new ones
 The cost involved in convergence largely
depends on the size & nature of the
company

7. PHASE DATE COVERAGE
Phase I
Opening B/S as at
1st April , 2011
 Companies which are
part of NSE Index –
Nifty 50
 Companies which are
part of BSE Sensex –
BSE 30
 Companies whose
shares or other
securities are listed on a
stock exchange outside
India.
 Companies, whether
listed or not, having net
worth of more than
Rs.1000 Crores.
Phase II
Opening B/S as at
1st April , 2013*
 Companies not
covered in Phase I and
having net worth
exceeding Rs.500
Crores.
Phase III
Opening B/S as at
1st April , 2014*
Listed Companies not
covered in earlier
phases
* If the
financial
year of a
company
commence
s at a date
other than
1st April, it
shall
prepare its
opening
balance
sheet at the
commence
ment of the
immediatel
y following
financial
year.

8. Due to the introduction of new Companies Act, 2013
the roadmap for convergence above has been
trashed and the MCA is likely to notify all the
sections of new Act within 1 month period for
facilitating the convergence. As per the new
roadmap India will adopt IFRS from FY15 onwards
in phased manner where Cos with t/o of 1000crs &
above to adopt IFRS from April 2015 and those Cos
with t/o between 500cr & 1000cr by April 2016.

9. And the introduction of new Act will bring forth a
new entity called NFRA (National Financial
Reporting Authority) set up u/s 132 of Companies
Act, 2013 replacing NACAS (National Advisory
Committee for Accounting Standards) established
u/s 210A of Companies Act, 1956. NFRA will be the
competent authority henceforth for pronouncing
and amending AS.

10. Any change brought to existing system will have to go
through new challenges and convergence with IFRS is no
exception
Training of accounting professionals to adapt to new
changes
Changes to be made in accounting software & IT
Systems
Issue related to different legal & regulatory requirement.