The future of IFRS in India Dr. Jayachitra S. Assistant Professor of Commerce, PSG College of Arts and Science, Coimbatore-641 014, Tamil Nadu, India Online published on 13 February, 2018. Abstract IFRS is used in many parts of the world, including the European Union, Hong Kong, Australia, Malaysia, Pakistan, GCC countries, Russia, South Africa, Singapore and Turkey. As in December 2011 more than 110 countries around the world, including all of Europe, currently require or permit IFRS reporting. Approximately 85 of those countries require IFRS reporting for all domestic listed companies. In subsequent years, many other countries either adopted IFRS or converged to IFRS. An upcoming economy on world economic map, India, too, decided to converge to IFRS. IFRS convergence, in recent years, has gained momentum all over the world. As the capital markets become increasingly global in nature, more and more investors see the need for a common set of accounting standards. India being one of the key global players, migration to IFRS will enable Indian entities to have access to international capital markets without having to go though the cumbersome conversion and filing process. It will lower the cost of raising funds, reduce accountant‟s fees and enable faster access to all major capital markets. Furthermore, it will facilitate companies to set targets and milestones based on a global business environment rather than an inward perspective. Furthermore, convergence to IFRS by various group entities, will enable management to bring all components of the group into a single financial reporting platform. This ill eliminate the need for multiple reports and significant adjustment for preparing consolidated financial statements or filing financial statements in different stock exchanges. Historically, each country developed its own Generally Accepted Accounting Principles (GAAP) for financial accounting and reporting and there was no uniformity among the GAAPs of different countries. Comparison of financial statements issued by business firms from different countries has become difficult leading toward suboptimal capital allocation across countries in the world. Gradually, there emerged a global demand for convergence of GAAP of different countries into a single set uniform accounting standards applicable to all countries. As a result, the International Accounting Standards Committee (IASC) was established in 1973. The IASC formed International Accounting Standards Board (IASB) in 2001 which began issuing International Financial Accounting Standards (IFRS). This paper presents details of each of these suggested alternatives and future perspective of the convergence and adoption of IFRS into the Indian accounting and reporting system. Top Keywords GAAP, IFRS, International Accounting Standards Board, Convergence, Adoption in India. Top |