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Major Impact of IFRS on Indian Accounting Standard

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Re: Major Impact of IFRS on Indian Accounting Standard

Post by Shubham Mathur on Sun Sep 18, 2016 11:05 pm

Under IFRS, accounting is done for all assets including intangible asset and liabilites at fair value.Inventories are calculated on the basis of LIFO and FIFO, investments are valued through the calculation of profit and loss account. The adaptation of IFRS is expected to result in better quality of financial reporting due to continuous adaptation of accounting principles.

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Impact of ifrs

Post by PGFA1658 on Tue Sep 20, 2016 4:00 pm

Improvement in comparability of financial information and financial performance with global peers and industry standards. This will result in more transparent financial reporting of a companys activities which will benefit investors, customers and other key stakeholders in India and overseas;
The adoption of IFRS is expected to result in better quality of financial reporting due to consistent application of accounting principles and improvement in reliability of financial statements. This, in turn, will lead to increased trust and reliance placed by investors, analysts and other stakeholders in a companys financial statements; and
Better access to and reduction in the cost of capital raised from global capital markets since IFRS are now accepted as a financial reporting framework for companies seeking to raise funds from most capital markets across the globe. A recent decision by the US Securities and Exchange Commission (SEC) permits foreign companies listed in the US to present financial statements in accordance with IFRS. This means that such companies will not be required to prepare separate financial statements under Generally Accepted Accounting Principles in the US (US GAAP). Therefore, Indian companies listed in the US would benefit from having to prepare only a single set of IFRS compliant financial statements, and the consequent saving in financial and compliance costs.
However, the perceived benefits from IFRS adoption are based on the experience of IFRS compliant countries in a period of mild economic conditions.

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Re: Major Impact of IFRS on Indian Accounting Standard

Post by ruchi gupta on Tue Sep 20, 2016 6:41 pm

The International Financial Reporting Standards the "IFRS" aims to make international financial reporting comparisons as easy as possible because each country has its own set of accounting rules. This will help to harmonize company financial information, improve the transparency of accounting, and ensure that investors receive more accurate and consistent reports.The investor will be benefited in as the way accounting information made available to them will be more reliable, relevant, timely and most importantly the information will be comparable across different legal framework. It will develop better understanding and confidence among the investors. The professional, both in practice and in employment will get benefits as they will be able to provide their services in various part of the world, as few years after everybody will follow the same reporting standards. So overall it will help in making things more transparent and reliable.




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Re: Major Impact of IFRS on Indian Accounting Standard

Post by himanshu goyal on Tue Sep 20, 2016 7:05 pm

The International Financial Reporting Standard (IFRS) has the major impact on co's financial statements.
Under IFRS, accounting is done for all assets including intangible asset and liabilities at fair value. The adoption of IFRS is expected to result in better quality of financial statements as now there would not be any confusion in relation to accounting procedure and will facilitate an easy understanding and comparability across global boundries.The adoption of IFRS is expected to result in better quality of financial reporting due to consistent application of accounting principles and improvement in reliability of financial statements.

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Re: Major Impact of IFRS on Indian Accounting Standard

Post by sonali gupta on Tue Sep 20, 2016 7:28 pm

International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB) that is becoming the global standard for the preparation of public company financial statements.There is a major impact of IFRS on Indian Accounting Standards in valuation of intangible assets.There is also an impact on valuation of inventories as there is difference in respect with subsequent recognition of cost/carrying amount of inventories as an expense.
Other impact can be it requires disclosure of contingent assets in the financial statements when the inflow of economic benefits and it impacts more to larger firms as compared to smaller firms and it has a positive impact on Financial Reporting and entities.

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Re: Major Impact of IFRS on Indian Accounting Standard

Post by SWATI SRIVASTAVA on Tue Sep 20, 2016 8:04 pm

India has so far followed Indian Accounting Standards. However from FY17, it will follow international accounting system called IFRS. This will increase comparability of Indian companies with their international counterparts. The new accounting standards recognize substance over form and importance of the fair value to compute financial statements. This means accurate reporting will gain importance over just complying with legal provisions and it should reflect the most current picture of financial statements. The implementation is expected to cause some trouble in companies’ finances in the initial stage as the standards call for projecting assets real value. But it offers companies an opportunity to improve their business in several ways.

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Re: Major Impact of IFRS on Indian Accounting Standard

Post by Ritika on Tue Sep 20, 2016 8:21 pm

International financial reporting standards (IFRS) as a universal financial reporting language is gaining momentum across the globe. In US there is an ongoing debate regarding the adoption of IFRS replacing US GAAP.
The adoption of IFRS is expected result in better quality of financial reporting due to consistent application of accounting principles and improvement in reliability of financial statements.
Better access to and reduction in the cost of capital raised from global capital markets since IFRS are now accepted as a financial reporting framework for companies seeking to raise funds from most capital markets across the globe.

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Re: Major Impact of IFRS on Indian Accounting Standard

Post by Neha Choudhary on Tue Sep 20, 2016 11:14 pm

International financial reporting standards are designed as a common language for business so that companies accounts are understandable across the boundries. These are the rules to be followed by accountants to maintain books of accounts which are comparable, understandable, reliable as per the internal and external user.
Global adoption of IFRS would save money on alternative comparison coat and individual investigation,while also allowing information to move more freely.
IFRS influence the ways in which the components of balance sheet are reported.
American standards GAAP are used by companies worldwide instead of which IFRS would be used by the companies.There exist difference between IFRS and GAAP that affect the way a financial ratio is calculated.
another difference is the specification of the way inventory accounted for. there are two ways under GAAP that is LIFO and FIFO while IFRS prohibit LIFO.
The companies that have adopted IFRS both companies and investor would benefit using the system, since investors are more likely to put money into a company if the company's business practices are transaparent.

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Re: Major Impact of IFRS on Indian Accounting Standard

Post by kshipra on Tue Sep 20, 2016 11:27 pm

IFRS are generally principles-based standards and seek to avoid a rule-book mentality. Application of IFRS requires exercise of judgment by the preparer and the auditor in applying principles of accounting on the basis of the economic substance of transactions.

It will impact revenue, operating profit, net profit, book value, goodwill, and return on equity will be computed.
Assets will be recognised at fair value,Fixed assets are not to be calculated on book value instead they will be calculated on fixed value, while investment are calculated from the profit and loss account.
The adoption of IFRS has had a positive impact on entities, financial reporting and wider economic settings. The adoption of IFRS has been found to have little impact on the accounting quality of smaller firms, and a larger impact on the accounting quality of larger firms.


Last edited by kshipra on Fri Oct 14, 2016 9:34 pm; edited 1 time in total

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Re: Major Impact of IFRS on Indian Accounting Standard

Post by SHWETA KHANDAL on Wed Sep 21, 2016 12:56 pm

IFRS adoption will not only open up a bundle of benefits to Indian Corporates but it will also open up a lot of opportunities for accounting professionals.As IFRS is principle based,it will provide cross border activities to professionals including accountants,values,auditors and actuaries,which will boost the growth prospects for BPO/KPO segment in India.The mobility for accounting professionals in industry also increases in all parts of the world.The benefits and costs associated with IFRS implementation are broadly discussed for three important aspects of accounting,i.e. corporate accounting public accounting and academics.

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Re: Major Impact of IFRS on Indian Accounting Standard

Post by Sankalp on Wed Sep 21, 2016 5:35 pm

I will consider IFRS as a tool which bring uniformity in accounting system of India earlier when IFRS was not introduced every one were free to choose their accounting systems that were convinient to them but somewhere around create disturbance  in the whole accounting system of India and that create difficulty in comparing as because of difference in accounting rules followed by different organisation. IFRS is defined as common global language for business affairs so that company accounts are understandable and comparable across international boundaries.
So to eliminate this disturbance IFRS has become a mandatory in India from 1 April 2016.
Now lets come towards its accounting impact, well this transition will create impact on the computation of revenue, operating profit, net profit and net worth of the listed companies. Inspite of only complieng of legal formalities it give importance to transparent  current report.
Earlier excise duty were to be deducted from sales but in new norms it will be treated as a tax on manufacturing activity.

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Re: Major Impact of IFRS on Indian Accounting Standard

Post by Ashishhh on Wed Sep 21, 2016 5:43 pm

Every country stipulates a method for companies to report financial data based on rules called accounting standards. India has so far followed Indian Generally Acceptable Accounting Principle (IGAAP). However, from FY17, it will follow Ind-AS whose principles are closely based on international accounting system called IFRS. This will increase comparability of Indian companies with their international counterparts.
according to new accounting standard i.e. IFRS all the revenues will be calculated by adding excise duty that will lead to higher revenue, lower margin and EPS neutral.
most of company having ESOP based on intrinsic value but under new standard this will be booked under fair value accounting and that will lead to increase employee cost
acording to IGAAP,propsoed divident is recognised in the same year..and according to new standard proposed dividend in a year when it is approved by shareholders this may increase the year end book value of company and lower the return on equity of high dividend paying companies. and assets and liabilities are to be recognised at fair value and and contingent liabilities to be accounted at fair value and goodwill value to be tested annually.
current investment valued at cost or market value but now needs to be valued at fair value. so cash rich companies will be more impacted. major repair charges are allowed to capitalised.

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Re: Major Impact of IFRS on Indian Accounting Standard

Post by manish rajpal on Thu Sep 22, 2016 3:02 pm

The International Financial Reporting Standard(IFRS) has the major impact on the valuation of Fixed Assets and Intangible assets,Inventory and Investments.

It will impact how key financials such as revenue, operating profit, net profit, book value, goodwill, and return on equity will be computed. For instance, under the existing rules, sales are calculated after deducting excise duty. Under the new norms, excise duty will be treated as a tax on manufacturing activity.
Assets will be recognised at fair value,Fixed assets are not to be calculated on book value instead they will be calculated on fixed value, while investment are calculated from the profit and loss account.

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Re: Major Impact of IFRS on Indian Accounting Standard

Post by Niharikasingh18j on Thu Sep 22, 2016 3:26 pm

IFRS have a great impact on Indian company's financial statements as company accounts are understandable and comparable across global boundaries. it will bring uniformity in the accounts worldwide which will eventually help in easy evaluation. India has today become an international economic force. and to stay as a leader in the international market IFRS is very important.

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Re: Major Impact of IFRS on Indian Accounting Standard

Post by Dheeraj Mohan on Thu Sep 22, 2016 4:05 pm

Adoption of IFRS means that the entire set of financial statements will be required to undergo a drastic change. The differences are wide and very deep routed.It would be a challenge to bring about awareness of IFRS and its impact among the users of financial statements.Lack of training facilities and academic courses on IFRS will also pose challenge in India.There is a need to impart education and training on IFRS and its application.

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Re: Major Impact of IFRS on Indian Accounting Standard

Post by manishnaruka on Thu Sep 22, 2016 4:10 pm

Insurance, banking and non-banking financial companies shall not be required to apply Ind AS either voluntarily or mandatorily. However, it appears (though not clarified), that if these entities are subsidiaries, joint venture or associates of a parent company covered by the roadmap, they will have to report Ind AS adjusted numbers for the parent company to prepare consolidated Ind AS accounts.

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Major Impact of IFRS on Indian Accounting Standard

Post by maharwal.vartika on Thu Sep 22, 2016 4:13 pm

The new standards Every country stipulates a method for companies to report financial data based on rules called accounting standards. India has so far followed Indian Generally Acceptable Accounting Principle (IGAAP). However, from FY17, it will follow Ind-AS whose principles are closely based on international accounting system called IFRS. This will increase comparability of Indian companies with their international counterparts.
It is likely to increase the employee cost.


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Re: Major Impact of IFRS on Indian Accounting Standard

Post by prerna khandelwal on Thu Sep 22, 2016 5:46 pm

conversion is much more than a technical accounting issue. Ind AS (the converged IFRS standards) in India may significantly affect a company’s day-to-day operations and may even impact the reported profitability of the business itself. Conversion brings a one-time opportunity to comprehensively reassess financial reporting.

On 2 January 2015, the Press Information Bureau, Government of India, Ministry of Corporate Affairs (MCA) issued a note outlining the various phases in which Indian Accounting Standards converged with IFRS (Ind AS) is proposed to be implemented in India, for Companies other than Banking Companies, Insurance Companies and NBFCs.

The application of Ind AS is based on the listing status and net worth of a company. Ind AS will first apply to companies with a net worth equal to or exceeding 500 crore INR beginning 1 April 2016. Listed companies as well as others having a net worth equal to or exceeding 250 crore INR will follow 1 April 2017 onwards. From April 2015 companies impacted in the first phase will have to take a closer look at the details of the 39 new Ind AS currently notified. Ind AS will also apply to subsidiaries, joint ventures, associates as well as holding companies of the entities covered by the roadmap. For the detailed roadmap and clarifications.

While announcing the Ind AS implementation in his 2014 Budget speech, Finance Minister Arun Jaitley also said that the standards for the computation of tax would be notified separately.

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Re: Major Impact of IFRS on Indian Accounting Standard

Post by alka yadav on Thu Sep 22, 2016 6:10 pm

IFRS is a global accounting standard.In India it may significantly affect company day to day operation and may even impact the reported profitability of business itself.IFRS adoption will not only open up a bundle of benefits to Indian Corporates but it will also open up a host of opportunities for accounting professionals

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Re: Major Impact of IFRS on Indian Accounting Standard

Post by Karishma kedia on Sat Sep 24, 2016 12:12 am

IFRS are designed as a common global language for business affairs so that the company accounts are understandable and comparable across international boundaries.

The impact of IFRS on valuation of fixed assets & intangible assets are valued at fair price and the accounting policy choice for intangible assets is revaluation model, inventory & investments is that, in GAAP LIFO & FIFO was used for treatment of inventories but now under IFRS, LIFO cannot be used.

The impact of IFRS on financial statements is that it will have a substantial impact on the P&L account, net asset and gearing position, and also certain key ratios such as debt-equity or leverage ratios. It will also result in lower profits for the companies as compared to GAAP because IFRS will require companies to make significant new disclosures.

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Re: Major Impact of IFRS on Indian Accounting Standard

Post by pallavi maindola on Sat Sep 24, 2016 2:38 am

It refers to International Financial Reporting standards,is a set of accounting standards developed and maintained by international accounting standard board. IFRS is a universal financial reporting language which is gaining momentum across the globe.it has the considerable impact on the computation of revenue,operating profit,net profit and net worth of Indian companies accounting structures.

There are several benefits in context with the Indian accounting ,in which few are as follows:

* It improves the comparability of financial information and financial performance globally and industry standards,which results in more transparent financial reporting of a companies activity which
will benefit investors,customers and other key stakeholders in India and overseas.

* The adoption of IFRS is expected to result in better quality of financial reporting due to consistent application of accounting principles and improvement in reliability of financial statements.

* Tt is basically creating more relevant and transparent way of making financial statements and financial reporting framework in a proper manner in seeking to raise funds from most capital markets across the globe.

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Re: Major Impact of IFRS on Indian Accounting Standard

Post by ajmera911 on Sat Sep 24, 2016 9:15 pm

Indian accountants and businessmen feel the need for convergence with IFRS. Capital markets provide an important
explanation for this change. Some Indian companies are already listed on overseas stock exchanges and many more will list in the future. Internationally acceptable accounting standards are becoming the language of communication for Indian companies.
The use of international financial reporting standards (IFRS) as a universal financial reporting language is gaining momentum across the globe. Over a 100 countries in the European Union, Africa, West Asia and Asia-Pacific regions either require or permit the use of IFRS. Some benefits of IFRS to Indian Corporates are as follows:
i) Improvement in comparability of financial information and financial performance.
ii) Better quality of financial reporting.
iii) Better access to and reduction in the cost of capital raised from global capital markets.

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Re: Major Impact of IFRS on Indian Accounting Standard

Post by Vartika Shukla on Sat Sep 24, 2016 11:21 pm

Accounting standards widely accepted as appropriate set of rules to the field of accounting necessary so financial statements are meaningful across a wide variety of businesses and industries
IFRS is to provide a global framework for how public companies prepare and disclose their financial statements. IFRS provides general guidance for the preparation of financial statements, rather than setting rules for industry-specific reporting.


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Re: Major Impact of IFRS on Indian Accounting Standard

Post by Aarya Gupta on Sun Sep 25, 2016 12:59 am

IFRS will overcome the flaw of not recording business
combinations at fair value,(as the purchase consideration paid for intangible assets not recorded in
acquiree's book is usually not reflected separately in financial statements;instead the amount gets
added to goodwill. Hence, true value of business combination is not communicated through
Financial Statements.) IFRS has had a positive impact on the financial statements of entities as its implementation has experienced large increases in market liquidity but mixed results for the cost of capital.

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Re: Major Impact of IFRS on Indian Accounting Standard

Post by Prateek Poddar on Mon Sep 26, 2016 11:41 pm

IFRS has a major impact on valuation of fixed assets and intangible assets, inventory and investments and financial statements of the company as under IFRS assets are recognized as at fair value rather than on book value. Liability are recognized at fair value the intangible assets under IFRS will be tested annually. IFRS helps the company to result in better quality of financial reporting due to continuous acquaintance of accounting principles.
No talking about inventories under IFRS inventories are calculated on the basis of LIFO and FIFO methods. Investment are valued by the calculation of profit and loss account.
Hence it will result in a positive impact as there will not be any kind of bewilderment in relation to accounting procedure and will help in easy understanding and comparability of accounting principles.
( Acc. to GAAP, IAS16)

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Re: Major Impact of IFRS on Indian Accounting Standard

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