Convergence with International Financial Reporting Standards (IFRS) in India

Abstract

The globalisation prompt more and more countries to open their doors to foreign investments and as the business expand across borders the need arises to recognize the benefits of having commonly accepted and understood financial reporting standards. The sound financial reporting standards underline the trust that investors place in financial reporting information: and thus play an important role in contributing to the economic development of a country. The mission of International Accounting Standards Board (IASB) is to develop a single set of financial reporting standards that are accepted worldwide. The Accounting Standards Board (ASB) of the Institute of Chartered Accountants of India (ICAI) is committed to convergence of its standards with those of IASB. However, deviations from International Financial Reporting Standards (IFRS) have been noted due to the some unavoidable reasons like legal and regulatory requirements, economic environment, level of preparedness and conceptual differences etc. Thus it can argued that even there has been lot of deliberation on convergence of Indian accounting standards with IFRS, it is difficult to adopt IFRS considering the indigenous problems.The present paper discusses the IFRS adoption in India and the utility for India in adopting IFRS, the problems and the challenges faced by Indian corporate in adopting IFRS. This paper will help in better understanding of this new language of financial reporting.