New Delhi, Mar 27 (UNI) India's convergence with International Financial Accounting Standards (IFRSs) will depend on the co-operation received from the government, regulators, tax authorities, courts and tribunals, a report said.
''The adoption of IFRS depends on the cooperation received from the stakeholders. Though many of them, like Banks, appreciate the IFRS, they abstain to the idea of using it in their own organisation,'' Head US GAAP and IFRS services Jamil Khatri said.
However, for publishing their IFRS financial statement by 2011-12, which would require comparatives for 2010-11, work needs to start now, Mr Khatri added.
Institute of Chartered Accountants of India (ICAI) has proposed a plan to move to IFRS from April 2011 for listed companies, banks, insurance companies and large sized entities with a turnover of over Rs 100 crore or borrowings of Rs 25 crore.
For this, the institute released a concept paper with KPMG on the convergence with IFRSs in India last evening, which details the strategy and roadmap for convergence of Generally Accepted Accounting Standards in India (Indian GAAP).
The report points out that the accounting standard setting in the country is subject to direct or indirect oversight by regulators such as the Reserve Bank of India, the Insurance Regulatory and Development Authority and SEBI, among others.
''Therefore, the ICAI will need to work closely with these regulators while opting for international reporting standards,'' the report said.
The report attempts to look into the benefits, feasibility, challenges, roadmap and impact of converging to IFRS by individual companies The major benefits of converging to IFRS highlighted in the report include more compatibility among sectors, countries and companies; improvement and initiating a new relationships with investors, customers and suppliers across the globe due to its universal appeal. It will provide impetus to cross- border acquisitions while enabling partnerships and alliances with foreign entities. It will also give better access to global capital markets and will reduce the cost of capital The report also said the convergence would result in a significant demand for IFRS resources, and at the same time due to the significant differences between Indian GAAP and IFRS, adoption is likely to have a significant impact on the financial position and financial performance of most Indian companies ''The IFRS requires senior management to take responsibility for the project and to demonstrate clear leadership and sponsorship throughout its implementation,'' the report said.
UNI BJR MP HT1300