IFRS

Learning Outcome
• Appraise the adoption process of IFRS in India.
• Describe the requirements of IFRS convergence in
India.
• Compare the Indian GAAP with IFRS (Ind-AS).
Let’s explore what is happening in the
Accounting world?
 GAAP-Introduction
• As accounting is the language of business, it
communicates the results and state of affairs.

• This language follows some accounting principles.

 New
version of New version
AS of IAS
 What is IFRS?
• A set of accounting standards
• Developed by ---International Accounting Standards
Board (IASB)
• For the preparation of public company financial
statements.
 NEED OF IFRS
• Globalization
----To reduce the differences between accounting
standards.
• International Acquisitions
• Standard quality of MIS
• Enhance confidence among the global stakeholders

Requirement of global Financial Reporting language

IASC( 1973)
 Continued……
 Attract International Investment
What is the outlook for IFRS adoption?
Global snapshot

Currently, there are 150 countries

that either adopted or signed to
adopt IFRS:
► Brazil – 2010
► Canada – 2011
► Chile – 2009/2010/2011
► India – 2011/2012
► Japan – 2010 (optional)
► Mexico – 2012
IFRS required or permitted
Local GAAP based on legacy IAS
No action taken/date set for adoption
In process of adopting or converting to IFRS
IFRS Compliance
 Indian Companies (Converged )
• IT Sector
Infosys , Wipro, NIIT
• Auto Sector
Mahindra and Mahindra
Tata Motors
• Bombay dyeing (textile)
• -Dr Reddy’s lab (pharma)
• - Bharti Airtel (telecom)
 Roadmap of IND-AS
Voluntary Mandatory Phase Mandatory Phase
Phase I II

1 April, 2015 1 April, 2016 1 April, 2017

Mandatory Phase Mandatory Phase

III IV

1 April, 2018 1 April, 2019

VOLUNTARY PHASE
 VOLUNTARY PHASE

• IND AS was voluntary adopted by companies w.e.f. 1-4-

2015
• Companies could opt in but couldn’t opt out
• If a company opted for IND AS w.e.f. 1-4-2015, its
holding, subsidiary, associate and joint venture will have
to mandatorily follow IND AS
 INDIAN COMPANIES VOLUNTARILY
ADOPTED IND-AS
 IT Sector……….INFOSYS, WIPRO, NIIT
 Auto Sector……MAHINDRA & MAHINDRA, TATA
MOTORS
 Textile………BOMBAY DYEING
 Pharma……..Dr. REDDY’s LAB
 Telecom……..BHARTI AIRTEL
MANDATORY PHASES
Phase I
Phase II
Phase III
Phase IV
 COMPARISON BETWEEN INDIAN GAAP
AND IFRS
BASIS INDIAN GAAP(AS) IFRS

COMPONENTS OF  Balance Sheet  Statement of financial

FINANCIAL STATEMENT  Statement of Profit and position
Loss  Statement of
 Cash Flow statement comprehensive income
 Notes to accounts  Statement of change in
equity
 Statement of cash flow

PRESENTATION AND  The Companies Act,  There is no prescribed

PREPARATION 1956prescribed format of rigid format
Balance Sheet(Schedule VI)
 BASIS INDIAN GAAP(AS) IFRS

PARENT COMPANY  Any company  Any company

holding 51% or more having control on
share of subsidiary decision making or
control on the
ownership of other
company
PROPOSED Current liability Retained earnings
DIVIDEND ( No longer a liability
CONVERTIBLE  Long term debt  Shareholder’s
DEBENTURES fund
CASH FLOW Exempted if SMEs No such exemption
STATEMENT
QuiZ
Accounting in India is governed by:
A.Company Law Board
B.Institute of Chartered Accountants of India 
C.Income Tax Department 
D.Reserve Bank of India
2. Companies covered in Phase I should have net
worth 
       a) Equal to 500 crores
       b) Equal and more than 500 crores
       c) Less than 500 crores
       d) more than 250 crores but less than 500 crores
3. Ind AS will apply to:
   a) both consolidated as well as standalone financials of
the company.
   b) Only consolidated financials
   c) Only standalone financials 
   d) Optional