After months of confusion over the implementation of International Financial Reporting Standards (IFRS) in India,there seems to be some clarity emerging on the issue.
Though the roll out of international reporting standards has been delayed by two years,given the differences between the finance ministry and corporate affairs ministry on tax issues,corporate affairs minister Veerappa Moily today said that his ministry will try to ensure that the standards are rolled out from next financial year.
We have taken the initiative that irrespective of whenever the DTC comes…we are determined to ensure that IFRS is implemented by April 1,2013, Moily said at an Assocham event here.
He said that it is imperative for the country to usher in reforms in the processes of doing business and vital to keep pace with changing times and global trends,more so because India does not enjoy a good ranking in the global index on ease of doing business.
The ministry of corporate affairs (MCA),had in 2008,said Indian Accounting Standards must converge with the IFRS by 2011. The convergence was expected to increase the credibility of Indian companies globally. Besides other things,the IFRS requires marking assets to market value that is expected to adversely impact the financial statements of many companies initially.
However,resistance from corporates and lack of clarity on tax-related issues led to postponement of the implementation date.
The MCA has already chalked out a roadmap for its implementation. According to the roadmap,companies with a networth of over Rs 1,000 crore were to converge their account books as per IFRS from April 1,2011. In the second phase,both listed and unlisted companies with a net worth over Rs 500 crore but less than Rs 1,000 crore will have to converge with the international accounting standards from the financial year beginning April 1,2013.
Moily said that realising the poor rating of the country in doing business,We have hastened the pace of reform process to effectively address the current challenges faced by the domestic corporate sector.