IGAAP and IFRS: Testing the diffrence in Key Financial Ratios

Harmonization of accounting standards has become a highly demanded issue of discussion and debate among accounting professionals around the globe. Accounting framework has been shaped by International Financial Reporting Standards (IFRS) to provide for recognition, measurement, presentation and disclosure requirements relating to transactions and events that are reflected in the financial statements. The statements on accounting standards are issued by the Institute of Chartered Accountants of India (ICAI) to establish standards that have to be complied with, to ensure that financial statements are prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The key analysis of the study is to compare the key financial ratios that are widely used under IGAAP as well as under IFRS and to examine the impact of IFRS on IGAAP in order to understand the difference in their financial performance. It is concluded from the study, that the differences of the individual firms were both in positive and negative directions upon the adoption of IFRS.