Implementation of IFRS as Indian Accounting Standard for Similarity in Financial Reporting in India: Challenges & Benefits
American Journal of Theoretical and Applied Business
Volume 5, Issue 4, December 2019, Pages: 90-96
Received: Sep. 3, 2019;
Accepted: Sep. 30, 2019;
Published: Oct. 17, 2019
Views 82 Downloads 17
Ram Singh, School of Business & Management, Quantum University, Roorkee, India
Santosh Kumar Srivastava, School of Commerce, HNB Garhwal Central University, Garhwal, India
International Financial Reporting Standards (IFRS) are issued by the International Accounting Standards Board (IASB), a committee of14 memberswho are from nine different countries work together to develop global accounting standards. At present, there are two sets of accounting standards that Generally Accepted Accounting Principles (GAAP), USA based and International Financial Reporting Standards (IFRS) have been issued by International Accounting Standards Board (IASB), London based. Generally Accepted Accounting Principles (GAAP) arevery different in nature but based on a few basic principles of GAAP rules.India also set up its own accounting standard namely Indian Accounting Standard (Ind-AS) from April, 2015to fulfilling all the requirement of IFRS in the country for matching the gap between IFRS and Indian accounting standards. This study is based on secondary data tries to investigate the benefits & challenges of IFRS application from which India can draw a lesson towards implementation of IFRS, converged Ind-AS and recommends must do reflections for a successful takeover. It highlights main benefits of IFRS adoption to include; enhanced transparency & comparability; improved quality of accounting information; reduced cost of processing information; augmented cross border investments & acquisitions; substantiated economic growth and financial stability. It recommends to the countriesvarious prerequisites are necessary for effective application and conformance with IFRS to store full benefits.This paper also presents a literature about the benefits of adoption of IFRS and related implementation challenges, reflects for successful application of converged Indian Accounting Standards (Ind-AS). Finally the paper presents the significance of IFRS and challenges for implementation.
Santosh Kumar Srivastava,
Implementation of IFRS as Indian Accounting Standard for Similarity in Financial Reporting in India: Challenges & Benefits, American Journal of Theoretical and Applied Business.
Vol. 5, No. 4,
2019, pp. 90-96.
Barth, M. E., Wayne R. L., Lang M. H., (2008). International Accounting Standards and Accounting Quality. Journal of Accounting Research. Vol. 46, 467-498.
Beria, Kumar, S., (2010). IFRS in real estate- A technical area mare than just accounting and reporting. The Chartered Accountant Journal. Vol. 58 (12), pp 1963-1973.
Bhatacharjee, S and Islam, Z. M. (2009). Problems of Adoption and Application of IFRS in Bangladesh. International Journal of Business and management. Vol. 4 (12).
Bhattacharya, Joydes (2012). Revised schedule VI- A scientific approach towards preparation of financial statements? The Chartered Accountant Journal. Vol. 61 (3), pp 444-452.
Callao, S. & Lainez, Jose, A. (2000). The effects of Accounting Diversity on international financial Analysis: Empirical Evidence. The International Journal of Accounting. Vol. 35 (1), pp.65-88.
Chamisa E. E. (2000). The relevance and observance of IASC standards in developing countries and the particular case of Zimbabwe. The International Journal of Accounting. Vol. 35 (2), 267-286.
D`souza, & Dolphy, (2007). IFRS the way forward. The Chartered Accountant Journal. Vol. 55 (11), pp 1692-1695.
D`souza, Dolphy (2014): ‘Managing the pitfalls for Ind-AS adoption in India’. Available on: http://articles.economictimes.indiatimes.com/2014-0829/news/53362679_1_indian-gaap-indian-mnc-mca.
Dancey, K (2012): ‘The future of accounting –A Canadian perspective’, The Chartered Accountant Journal, Vol. 61 (1), pp 77-80.
Daske, H., Hail, L., Leuz, C. and Verdi, R (2008) `Mandatory IFRS reporting around the world: early evidence on the economic consequences’, Journal of Accounting Research, 46 (5), pp.1085-1142.
Deloitte (2011): `Ind AS consideration for Board and Audit Committees’, Available on http://www.iasplus.com/en/publications/india/ind-as-considerations-for-boards-and-audit-committees.
Deloitte (2015). Indian GAAP, IFRS and Ind AS: A Comparison’, Available onhttp://www.iasplus.com/en/publications/india/indian-gaap-ifrs-and-ind-as-a-comparison/view.
Deloitte (2015). Preface to International Financial Reporting Standards. Available on - http://www.iasplus.com/en/standards/other/preface.
Ding Yuan, Hope Ole-Kristian, Jeanjean, Thomas and StolowyHeme, (2007). Differences between Domestic Accounting Standards and IAS: measurement, Determinants and Implications. Journal of Accounting and Public Policy. Vol. 26, 1-38.
Edogbanya, A. & Kamardin, H. (2014). Adoption of IFRSs in Nigeria: Concepts and Issues. Journal of Advanced Management Science. Vol. 2 (1).
Espinosa, German L, and Biscarri, Javier G, (2007). The influence of differences in accounting standards on empirical pricing models: An empirical implication of Fama-French model. Working Paper, No.13/07.
Gupta A. (2012). Revenue recognition under IFRS. The Chartered accountant Journal. Vo. 60 (7), pp. 54-60.
Herbert, Wilson E. Ene, Emeka, E. and TsegbaIoraver, N, (2014). Globalization of Financial Reporting: Obstacles of IFRSs Adoption in Nigeria. Asian Journal of Business and Management Science, Vol. 3 (12), 25-41.
IASB (2015). IFRS application around the world, Jurisdiction profile: Tanzania. Available on, http//www.ifrs.org/use/around-the-world-/documents/jurisdictional–profiles/TZ-IFRSprofile.pdf.
Kumar, R. (2015). Implementation of IFRS in India: Opportunities & Challenges. International Journal of Business Management and Scientific Research. Vol.3, pp. 73-78.
Muniraju M. & Ganesh S. R. (2015). Convergence of International Financial Reporting Standards- Benefits, problems, Challenges for India. International journal of Informative & futuristic Research. Vol. 01 (6), pp. 1548-1557.
Preethi, S., Deepti, M., & Rawat, D. (2015). Challenges and Prospects of IFRS in Indian Accounting Systems. International Journal of Core Engineering and Management, pp. 142-149.
Tendeloo, B. & Vanstraelen (2005). Earning Management under German GAAP versus IFRS. European Accounting Review. Vol. 14 (1), pp. 155-180.
Veeramani, C. & Mahendra, S. (2015). Overview-accelerating growth and development, challenges in short term and long-term. India Development Report, 2015, pp. 1-19, Indira Gandhi Institute of Development Research.
World Bank Group, (2004). Report on the Observance of Standards and Codes (ROSC). India-Accounting and Auditing. pp. 1-34. http://www.worldbank.org/ifa/rosc_aa_ind.pdf.
World Bank Group. (2005). Report on the Observance of Standards and Codes (ROSC) Tanzania Accounting and Auditing pp. 1-27. Available on http://www.worldbank.org/ifa/rosc_aa_tza_0405.pdf.
World Bank Group. (2014). Global economic prospects, World Bank report, Vol. 9, June, 2014, Washington DC.