National accounting rules are an oddity in a world where companies sprawl across national boundaries and money glides in and out of economies. A global economy needs global accounting standards.
So, it’s good that the government has reiterated on Wednesday that Indian companies will have to move to the International Financial Reporting Standards (IFRS) by 2011. US accounting rules did become the default global accounting rule for some time, but now even the world’s largest economy is set to embrace IFRS.
The first beneficiaries will be Indian companies which access global capital markets. Their cost of doing business will drop, since they will not have to maintain two sets of financial numbers. But these rules will eventually increase transparency and make things easier for investors. And local accountants could also look forward to some outsourcing work coming their way, once global accounting rules are harmonized.