This paper examines the benefits of adopting International Financial Reporting Standards (IFRS) by Indian entities and further examines the effect of adoption of IFRS on companies’ segment reporting as compared to segment reporting under Indian GAAP (IGAAP). It studies the impact of adoption of IFRS 8 by taking the case of M/s Sify Technologies Ltd., an Indian listed entity and presents a detailed analysis of differences in the segment disclosures data under the new standard IFRS 8 vis-ŕ-vis the Indian Accounting Standard, AS-17. It is observed from the study that there are certain marked deviations in the segment profit and loss as disclosed by the financial statements of M/s Sify Technologies Ltd. as reported under IGAAP and those reported under IFRS. The major difference between the two reporting is the information given and the presentation requirement. Further, under IFRS 8, the disclosure requirements related to geographical segments are significantly reduced or in most of the cases completely lost, which is a major concern to stakeholders. Further, there will be lack of comparability of segment information between companies as IFRS provides discretion to the Chief Operating Decision Maker to choose what to disclose and the manner in which the information can be disclosed.

The era of ‘globalization’ has not left the capital markets and the financial markets around the world untouched and therefore comparison between firms is crucial for investors and stakeholders around the world to make vital and necessary decisions. The common tool used by them to take such decision is accounting or financial information. The investors make use of this information as one of the most important inputs or sometimes the sole input in their decision-making process to decide whether to invest or not in the securities of a particular firm. The differences in financial reporting requirements and frameworks across nations create complications and inconsistent treatment for the companies that are globally active in preparing, consolidating and auditing the financial statements. This heterogeneity also renders it impossible to compare financial information of companies from different countries across the world. The differences in accounting standards create confusion for users of financial statements which leads to inefficiency in capital markets across the world. It also increases the cost of providing supplementary information so as to make the financial statements comparable. This globalization of capital markets and increasing complexity of business transactions call for a single set of high-quality accounting standards. Throughout the world, the bodies responsible for setting accounting standards in different nations are exploring ways to eliminate differences in accounting information, thereby creating uniform standards for preparation of the accounting information so that the financial statements from anywhere in the world can be easily read and understood by the business and financial communities. International Financial Reporting Standards (IFRS) are accounting rules which are applied while preparing the balance sheet and income statement of a company and are issued by the International Accounting Standard Board (IASB). IFRS is becoming the global standard for the preparation of public company financial statements. Convergence with IFRS has gained momentum in recent years and the accounting bodies all over the world have realized that the adoption of the IFRS would enable the world to speak the same accounting language which can be understood by all.

Accounting Research and Audit Practices, Comparative Study, Segment Reporting, Empirical Evidence, International Financial Reporting Standards (IFRS) , Indian GAAP (IGAAP), International Financial Reporting Standards (IFRS), International Accounting Standards Board (IASB), India.