Implementation of IFRS as Indian Accounting Standard for Similarity in Financial Reporting in India: Challenges & Benefits

Abstract

International Financial Reporting Standards (IFRS) are issued by the International Accounting Standards Board (IASB), a committee of14 memberswho are from nine different countries work together to develop global accounting standards. At present, there are two sets of accounting standards that Generally Accepted Accounting Principles (GAAP), USA based and International Financial Reporting Standards (IFRS) have been issued by International Accounting Standards Board (IASB), London based. Generally Accepted Accounting Principles (GAAP) arevery different in nature but based on a few basic principles of GAAP rules.India also set up its own accounting standard namely Indian Accounting Standard (Ind-AS) from April, 2015to fulfilling all the requirement of IFRS in the country for matching the gap between IFRS and Indian accounting standards. This study is based on secondary data tries to investigate the benefits & challenges of IFRS application from which India can draw a lesson towards implementation of IFRS, converged Ind-AS and recommends must do reflections for a successful takeover. It highlights main benefits of IFRS adoption to include; enhanced transparency & comparability; improved quality of accounting information; reduced cost of processing information; augmented cross border investments & acquisitions; substantiated economic growth and financial stability. It recommends to the countriesvarious prerequisites are necessary for effective application and conformance with IFRS to store full benefits.This paper also presents a literature about the benefits of adoption of IFRS and related implementation challenges, reflects for successful application of converged Indian Accounting Standards (Ind-AS). Finally the paper presents the significance of IFRS and challenges for implementation.