Given the revised IFRS standards, Indian banks that undergo transition to IFRS from 2013 will fortunately have a stable platform. However, for Indian companies that began transition in 2011, it is like jumping into a speeding train.

The road map for banking companies requires all banks other than urban cooperative banks which have a net worth not exceeding Rs 200 cr and regional rural banks to apply International Financial Reporting Standards (IFRS). All scheduled commercial banks and those urban co-operative banks which have a net worth in excess of Rs 300 cr shall apply IFRS from April 1, 2013. Urban cooperative banks which have a net worth in excess of Rs. 200 cr but not exceeding Rs. 300 cr shall apply IFRS from April 1, 2014. Urban cooperative banks which have a net worth not exceeding Rs. 200 cr and regional rural banks will apply existing Indian accounting standards or alternatively they can choose to apply IFRS standards.

Whilst the roadmap for IFRS has been announced and the implementation of IFRS is date certain, there is uncertainty on which IFRS standards will apply in India. Firstly, IFRS standards are dynamic and undergo constant changes as the International Accounting Standards Board (IASB) is continuously under pressure to simplify the standards and converge them with the US standards. The standards when changed apply from a prospective date with an option to early adopt in many cases. It is not clear what applicability date the Indian standard setters will choose for the changes made to various standards. Secondly, the Reserve Bank of India (RBI) has set up different committees to look into the various aspects of the financial instrument standards. These committees will have to decide whether any changes or modifications are required to the IFRS standard or they can be applied as it is.

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