Presentation on International Financial Reporting Standards

By:Sinto Aparna Saikiran Kishore Bhavesh Abhimanyu

History
International Financial Reporting Standards (IFRS)are

principles-basedStandards,Interpretationsandthe Framework(1989). AdoptedbyInternationalAccountingStandardsBoard (IASB). Fewstandardsareknownbytheformernameof InternationalAccountingStandards(IAS). OnApril12001,thenewIASBtookovertheresponsibility forsettingIAS.

WhatisIFRS?
ItsaUniversalfinancialreportingLanguage IAS/IFRSisasinglesetofhighquality,understandableandenforceableglobal

accountingstandards. ThereisaFrameworkforthePreparationandPresentationofFinancial Statements. Detailsthequalitativecharacteristicsoffinancialstatements,specifiesthe requiredreportingelements,constraintsandassumptionsinvolved. Qualitative Characteristics: a)Understandability:Customershouldbeabletoreadilyunderstandthe statement. b)Comparability: Isconsistentamongfirmsandacrosstimeperiods. c)Relevance: Timely,sufficientlydetailed,influencesdecisionsandaffectsusers evaluation. d)Reliability:Reflectseconomicreality,isunbiased,andisfreeofmaterial errors.

WhyIFRS?
Companiescanstreamlinetheirfinancialreporting.Thisreduces

relatedreportingcosts. Crossborderinvestmentsleadingtoeconomicgrowth. Comparabilityoffinancialstatementsofanytwocompanies anywhereintheworld. Globalizationofeconomyandworldtrade Timeandmoneysavedbyinternationalprofessionalaccounting firmsinplanningandexecutionofaccountingandaudits.

ImpactofIFRSIndianContext
To Whom Its Applicable:

ComplianceswithIFRSinIndiaisrestrictedtoPublic Enterpriseswhichincludethosecompanies&entitieslistedon anystockexchangeorhaveraisedmoneyfromthepublic,or havepublicinterest,orpublicsectorcompanies.

Impact : Implementation will affect:

Presentationofdocuments,theaccountingpoliciesand procedures,thewaylegaldocumentsaredrafted,thewaythe entitycommunicatedwithitsstakeholdersandconductsits business.

CurrentIndianScenario
Implementation in India

ThegovernmentwantedtoconvergeIndianAccounting StandardswithIFRSfromApril1st ,2011.Butishasbeen postponedtillalaterdateisannouncedbytheministry. Challenges a)Awarenessaboutinternationalpractice b)Training c)Amendmentstotheexistinglaw d)Taxation e)Fairvalue

IGAAP vs. IFRS

Particulars
1 ) C o m p o n e n ts o f Fi a n ci l n a S ta te m e n ts

IGAAP
C o m p ri s o f se B a l n ce sh e e t a Pro fi a n d Lo ss A / c t C a sh fl w sta te m e n t a n d o N o te s to A cco u n ts

IFRS
C o m p ri s o f se S ta te m e n t o f Fi a n ci l n a Po si o n , S ta te m e n t o f ti C o m p re h e n si I co m e ve n S ta te m e n t o f C a sh fl w o N o te s to A cco u n ts S ta te m e n t o f C h a n g e s i n Equi ty

2)CashFlowStatement 3)Dividends

E xe m p te d fo r Le ve l 3 e n ti e s a s p re scri e d b y ti b I AI C .

Mandatoryforall entities

D i d e n d s d e cl re d a fte r D i d e n d s d e cl re d a fte r vi a vi a th e e n d o f th e re p o rti g th e e n d o f th e re p o rti g n n p e ri d b u t b e fo re th e o p e ri d b u t b e fo re th e o fi a n ci l sta te m e n ts a re fi a n ci lsta te m e n ts a re n a n a a p p ro ve d a re re co rd e d a s a u th o ri d fo r i e a re ze ssu l a b i i i th e fi a n ci l i l ty n n a n o t re co rd e d a s l a b i i i i l ty n sta te m e n ts. th e fi a n ci lsta te m e n ts. n a

IGAAP VS IFRS CONTD..

Particulars 4)Accountingfor foreigncurrency transactions
5 ) Fu n cti n a l cu rre n cy o

IGAAP

IFRS

Exchangedifferences Allexchange onforeigncurrency differencesare transactionsare includedinthe recognizedinthe determiningnet P&LAccount. incomefortheperiod D o e s n o t d e fi e n C u rre n cy o f p ri a ry m fu n cti n a l cu rre n cy . o e co n o m i e n vi n m e n t c ro inwhichdifferences i w h i e n ti n ty arise. ch
o p e ra te s. D i o se d a s p re p a i scl d D i o se d a s a p a rt o f scl a sse ts a n d a cco u n ti g fi d a sse ts. n xe tre a tm e n t i si i a r to s m l o p e ra ti g l a se s. n e

6 ) Le a se h o l La n d d

THANK YOU.