“We hope to notify the new accounting norms as per the IFRS standards by the end of this year,” Corporate Affairs Secretary R Bandyopadhayay said at a conference on IFRS organised by Assocham here.
He also indicated that efforts would be made to resolve alls issues including the tax implications for the convergence. “We are hopeful that beginning from April 1, 2011 Indian companies can prepare their accounts books as per the IFRS,” he said. To bring about greater transparency in accounting the Ministry of Corporate Affairs has proposed that companies with a net worth of over Rs 1,000 crore, will have to prepare their account books as per the IFRS from April, 2011.
The ministry has proposed that scheduled commercial banks and urban cooperative banks should adopt the IFRS compatible new accounting norms with effect from April 1, 2013. However, the Ministry has proposed that all insurance companies will adopt the new convert their opening balance sheets with IFRS from April, 2012.
Amending Cos Act
Listed large non-banking finance companies (NBFCs) will converge their opening books of accounts with IFRS norms from April 1, 2013. The ministry proposes that the IFRS norms will not be binding on small and medium enterprise.
The taxation committee of Institute of Chartered Accountants of India (ICAI), is helping the government in preparing the new accounting norms in sync with the IFRS standards. For the IFRS norms to be operational necessary amendment has to be made in the Companies Act, 1956.
Corporate Affairs Ministry officials said during the winter session of Parliament, the government was planning to introduce an amendment to the Companies Act, 1956 to pave way for the convergence of the Indian accounting norms with the IFRS.
Bandyopadhyay said the adoption of IFRS by India Inc would enhance comparison of financial statements, not just domestically but also globally.
Better understanding and comparability of financial statements will draw more global investments to the Indian market. Corporate experts explain IFRS norms based on the fair value approach, differ principally from the existing norms.
Hence, this will bring about significant changes in the way various aspects of accounting are currently looked at.