Of the 14 countries that have adopted IFRS for at least some (but not all) domestic publicly accountable entities, India is one. Hence, India has finally adopted fair value measurement in its business reporting system. For the purpose of defining and measuring fair value in India, the ICAI has introduced converged Indian Accounting Standards in line with IFRS, Ind AS 113 on fair value measurement. Although Ind AS 113 defines fair value, sets out a single Ind AS framework for measuring fair value and requires disclosures about fair value measurements, it does not direct which assets and liabilities too are measured at fair value. Rather, Ind AS 113 is applicable when another Ind AS requires or permits fair value measurements or disclosures about fair value measurements. As per MCA’s notification dated 16.02.2015, the first financial reporting on the basis of converged ASs of Indian companies will be mandatorily prepared on March 31, 2017. Analysis of fair value measurement of assets and liabilities made by Indian companies can only be done after preparation of their financial statements for the year 2016-17. It will be interesting to see how Indian companies measure fair value of assets/liabilities, for which no active market exists, using significant unobservable inputs (i.e., Level 3 Inputs) as enumerated in the hierarchy of Ind AS 113.

Time has really come to examine the degree of adoption of Fair Value (FV) concept in Indian Financial Reporting System as part of convergence with the International Financial Reporting Standards (IFRSs). During the last few decades, a substantial number of studies have been carried out all around the world establishing the superiority of FV concept over historical cost concept. India, though one of the fastest emerging economies, has different economic, financial and social conditions. The adoptability of FV concept in India is one of the essential elements for converging with IFRS. However, some accounting experts have expressed concerns about the fair value emphasis of IFRS and the influence of accountants from non-common-law regions, where losses have been recognized in a less timely manner. The present paper examines the degree of adoption of FV concept in the Indian scenario.

Accounting Research and Audit Practices, The Impact of EVA and Traditional Accounting, Performance Measures on Stock Returns.