IFRS to benefit India Inc, say industry captains

NEW DELHI, INDIA: As the India Inc is set to converge from the Indian Accounting Standards to International Financial Reporting Standards (IFRS) from April 1, 2011, the industry captains voiced that the convergence would favour Indian corporates eyeing the global markets, at the IFRS summit organized by Confederation of Indian Industry (CII) - ‘IFRS Convergence Gaining Strength’, here today.

According to T V Mohandas Pai, director and head, Finacle, Admin, Human Resources, Infosys Leadership Institute and Education and Research, Infosys Technologies, though there are concerns among industry players, in fact it would benefit the Indian industries.

“IFRS is world’s best accounting standard and converging into the same would make raising funds outside India and attracting foreign investment easier. IFRS shall help in maintaining transparency levels to attract overseas players,” he added.

On the issues of convergence, S Mahalingam, chairman – CII IFRS Summit and executive director and chief financial officer, Tata Consultancy Services (TCS) also said that there should be no fears among industry players as the key elements of Indian Accounting Standards and IFRS are not going to vary much.

While addressing the summit, Y H Malegam, chairman of the National Advisory Committee on Accounting Standards (NACAS) said that IRFS guidelines for the banking, insurance and NBFCs would be released soon.

“Under IRFS there will be changes in treating certain aspects of assets and liabilities like treatment of redeemable preference shares and depreciation provisions. But, mainly the terminologies will change and other provisions would not affect the tax treatments and cash profit calculations,” he assured.

“IRFS will consist of two parts, initially for the organizations with more than Rs 500 crore networth and rest having less than Rs 500 crore networth with having a difference of reporting disclosures by both,” Malegam added.

Manfred Hannich, global head of Accounting Advisory Services, KPMG informed that the US is also considering IRFS convergence.

“India is one of the earliest countries to go for IRFS and the US may follow soon as discussion on consolidated taxation treatment on financial reports is underway,” Hannich said.