On January 22, 2010, the
Ministry of Corporate Affairs (MCA) issued a press
release setting out the road map for International Financial
Reporting Standards (IFRS) convergence in India. This is
an historic step that will elevate Indian entities and their
finance and accounting professionals to much
greater heights. Compliments to all the agencies that made
this possible, including the MCA, the IFRS core group, the
Securities and Exchange Board of India (Sebi) and the
National Advisory Committee on Accounting Standards (NACAS).
IFRS converged accounting standards
(hereinafter referred to as IFRS) shall apply to Indian companies
in three phases, as explained below.
Certain Indian companies have already begun to plan
the conversion to IFRS. They have found that IFRS conversion
is more than an accounting change and may affect
many aspects of a company outside of the finance function,
including information technology, group structures, direct
and indirect taxes, strategic plans such as an initial public
offering or an acquisition, investor relations, debt
arrangements, and executive compensation. For the companies covered
in Phase I, there is no time to lose: listed companies
in Phase I are required to start reporting IFRS results
from the first quarter of the year, beginning April 1, 2011.
Furthermore, depending on how a company elects to
present comparative information in the first year, its actual date
of transition could be as early as April 1, 2010. Companies
in Phase I should therefore accelerate the process of
conversion to IFRS. |
