Impact of international financial reporting standards (IFRS) in Indian corporate sector-An analysis

The International Financial Reporting Standards (IFRS) aims to make International Financial Reporting Comparisons as easy as possible because each country has its set of accounting rules, over the years the use of IFRS has emerged as widely used and accepted standards in the world with more than 12000 companies and over 100 Countries accepting and mandating its implementation. At presents India aim to be joining IFRS club from the financial year 2011 to include, all listed companies, all banking companies, all financial institutions, all scheduled commercial banks, all insurance companies and all NBFC.

Many countries have recognized the need for convergence of accounting standards and are moving towards its implementation whilst other are more passive in their approach, perhaps having issues too complex to resolve or have not comprehended the importance of IFRS. The timeline for the convergence of select countries, including India. The Institute of Chartered Accountants of India (ICAI) has announced that IFRS will be mandatory in India for financial statements for the periods beginning on or after 1 April 2011. This will be done by revising existing accounting standards to make them compatible with IFRS. Reserve Bank of India has stated that financial statements of banks need to be IFRS-compliant for periods beginning on or after 1 April 2011.