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IFRS

IFRS. IFRS. IFRS stands for “International Financial Reporting Standards” and includes International Accounting Standards (IASs ). §IFRSs are developed and approved by IASB (International Accounting Standard Board ).

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IFRS

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  1. IFRS

  2. IFRS • IFRS stands for “International Financial Reporting Standards” and includes International Accounting Standards (IASs). • §IFRSs are developed and approved by IASB (International Accounting Standard Board). • These are standards for reporting financial results and are applicable to general purpose financial statements and other financial reporting of all profit-oriented entities. •  IAS were issued between 1973 and 2001 by the Board of the International Accounting Standards Committee (IASC). On 1 April 2001, the new IASB took over from the IASC the responsibility for setting International Accounting Standards.

  3. IFRS-Introduction(Contd) • International Financial Reporting Standards comprise: • International Financial Reporting Standards (IFRS)—standards issued after 2001 • International Accounting Standards (IAS)—standards issued before 2001 • Interpretations originated from the International Financial Reporting Interpretations Committee (IFRIC)—issued after 2001 • Standing Interpretations Committee (SIC)—issued before 2001

  4. Why IFRS • Increasingly being recognised as Global Reporting Standards for financial statements. • As global capital markets become increasingly integrated, many countries are moving to IFRS • More than 100 countries such as European Union, Australia, New Zealand and Russia currently permit the use of IFRS in their countries. • Increased growth of international business • Encourage international investing and thereby lead to more foreign capital inflows into the country • IFRS would enhance the comparability between financial statements of various companies across the globe • Benefit investors who wish to invest outside their own country • Reduce cost of compliances by reducing different accounting requirements

  5. IFRS In India • Earlier it was to be implemented from 1st April 2011 in the following manner: • Phase I (opening balance sheet as at 1 April, 2011):- 1. Companies which are part of BSE - Sensex 30 and NSE - Nifty 50 2. Companies whose shares or other securities are listed outside India; 3. Companies whether listed or not, having net worth of more than Rs. 1,000 crores.

  6. IFRS in India(Contd) • Phase II (opening balance sheet as at 1 April, 2013):- Companies not covered in Phase 1 and having net worth exceeding Rs. 500 crores. • Phase III (opening balance sheet as at 1 April, 2014):- Listed companies not covered in earlier phases But now the implementation has been deferred and the new date is not known.

  7. Indian GAAP and IFRS

  8. Indian GAAP and IFRS

  9. Indian GAAP and IFRS

  10. Benefits to India • Improved access to International capital markets • Reduction in Cost of capital • Benchmarking with Global peers • Avoidance of multiple reporting • Reflecting true value of acquisitions

  11. Differences- IFRS and US GAAP

  12. Differences- IFRS and US GAAP(Contd)

  13. Challenges in adopting IFRS • Regulatory endorsement and acceptance • Shortage of skilled resources • Huge cost of enhancement of IT systems • Acceptance by tax authorities • Business issues like management reporting system, employee benefit plan , tax planning etc.

  14. Queries

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