New Delhi: Industry Chamber CII said on 4 November the convergence of International Financial Reporting Standards (IFRS), the global accounting practice followed by 102 countries, would improve comparability, transparency and credibility of financial statements of the India Inc.
“Adoption of IFRS, the new global reporting standards, would improve comparability, transparency and credibility of financial statements and in a globalised world, would lead to greater economic efficiencies,“In India too, the IFRS will be adopted only for the listed entities and other public interest entities such as banks and insurance companies, it said.
However, the chamber observed it is important to assess the impact of the decision of the Institute of Chartered Accountants of India (ICAI) to fully converge with the global accounting standard issued by the International Accounting Standards Board for accounting periods commencing on or after 1April, 2011.
The introduction of IFRS represents a fundamental change in financial reporting, it said, adding planning for it, generating the necessary awareness, educating stakeholders and managing the required changes will take considerable management commitment and time to achieve a successful transition.
CII also noted that another big challenge for countries adopting IFRS is a shortage of resources, particularly IFRS-trained professionals. Also, since IFRS are fair value driven, unlike the Indian GAAP (Generally Accepted Accounting Principles), India would need a large pool of valuation experts.