The Institute of Chartered Accountants of India
(ICAI), which has announced that the Indian accounting standards will
be converged with International Financial Reporting (IFR) accounting
standards from the financial year 2011-2012 onwards, is already gearing
up for the challenge.
Ruling out any possibilities of complications
arising out of the convergence, Ved Jain, vice-president, ICAI, said,
â€œIndian accounting standards are already on the lines of IFR standards
and will require very minor changes. It will nowhere affect the
performances of the companies or make them incur losses. The standards
are different only to the extent of centigrade and Fahrenheit.â€
The institute is already training CA professionals across the country in this regard. The US too has agreed to adopt the IFR.
Apart from the US GAAP (generally accepted
accounting principles) being converged with the international standard,
over 100 countries have already adopted the IFR.
â€œWith globalisation at its peak, there had been a
huge demand since long across the world for common accounting
standards. Unlike India, several countries had some differences in
adopting the common international accounting standard of IFR given the
amount of changes required in their current standards,â€ he said.
The common accounting standards has benefited
several multinational companies, who until now had to publish and
submit different set of accounts in the countries of their operations.
The Supreme Court recently upheld the revised
accounting standards, AS 22, issued by ICAI, made mandatory for all
listed companies since financial year 2001-02.
Adoption of IFRS by companies across the world helps in better comparison of the performance of companies as there will be uniformity in accounting policies & practices followed by companies across the world.It is very important for india To move towards IFRS from Indian AS as most of the countries have already adopted or will adopt IFRS in near future. Moreover it also helps the Multinational companies listed in various exchanges across the world to save cost as they are not required to prepare accounts according to different accounting Standards & practices.
It will also open new challenges and opportunities for Indian CAs.