Page 39 - Banking Finance December 2016

ARTICLE

in the financial world so that business and accounts can be and involve both listed and unlisted with a net worth of
understood from company to company and country to coun- over Rs. 500crore but less than Rs. 1000crore and appli-
try. IFRS are approved and issued by International Account- cable to holding, subsidiary, joint venture or associate com-
ing Standard Board (abbreviated as IASB). Broadly IFRS panies of above companies.
consist of :
1. 13 International Financial Reporting Standards(IFRS) From April 1 2017, there will be mandatory adoption for
unlisted companies having net worth of Rs. 250crore or
2. 28 International Accounting Standards(IAS)
more and applicable to companies with net worth of less
3. 15 International Financial Reporting Interpretation
than Rs. 500crore whose equity or debt securities are listed
Committee(IFRIC)
in India or outside India.
4. 9 Standards Interpretation Committee(SIC)
Roadmap for Implementation of IND AS
However Indian Accounting Standards are most similar to
IFRS. But there is a gap between them as IFRS are issued for SCBs(excluding RRBs), Insurers/Insur-
on the basis of global environment and Indian Accounting ance Companies and NBFCs
Standards are issued on the basis of Indian environment. After consultation with RBI, IRDA and PFRDA, the follow-
Hence few of IFRS are carved out to bridge that gap and
ing roadmap to implement IND AS converged with IFRS for
to make them suitable for Indian Environment.
Scheduled Commercial Banks(excluding RRBs), Insurers/In-
surance Companies and Non-Banking Financial Companies
Need for IFRS in India has been drawn up by Honorable Financial Minister Arun
Here the question arises, why does India need IFRS for Jaitley:
maintaining accounting records? The answer for aforesaid (a) (i) Scheduled Commercial Banks(excluding Regional
question has been described below: Rural Banks), All-India Term Lending Institutions,
Y IFRS provides stability and transparency throughout the Insurers/ Insurance Companies and holding , sub-
financial world. sidiary, joint venture and associate companies of
above mentioned institutions would be required to
Y Apple to apple comparison of financial statements with
foreign companies becomes possible. prepare IND AS based financial statements for
accounting periods beginning from April 1, 2018
Y To compete with organizations across the world be-
onwards with comparatives for the periods ending
comes easy and smooth. March 31, 2018 and thereafter
Y IFRS provides new opportunities for Indian Companies (ii) Urban Cooperative Banks(UCBs) and Regional Ru-
to establish their business throughout the world. ral Banks(RRBs) shall not be required to apply IND
Y It will attract Foreign Investment as Investors will feel AS and shall continue to comply with the existing
free to analyze the organizations having a common ac- Accounting Standards, for the present
counting language.

Y Smoothness in world trade can be achieved.

How IFRS is applicable in India, voluntary

or mandatory?
Government wants companies to adopt IND AS converged
with IFRS on voluntary basis from F.Y. 2015-16 and on man-
datory basis from F.Y. 2016-17 onwards. In the first phase,
it was implemented at companies that have a net worth of
over Rs. 1000crore. The second phase, from April 1, 2016

BANKING FINANCE | DECEMBER | 2016 | 39

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