Convergence of Indian accounting standards and IFRS would benefit industry: CII

A convergence of Indian Accounting Standards with International Financial Reporting Standards (IFRS) beginning April 2011 would help Indian corporates to compete globally, industry captains said at the `Summit on IFRS' organised by the Confederation of Indian Industry (CII) in Chennai today.

T N Manoharan, chairman, CII National Committee on accounting standards and past president, ICAI, in his address said that Indian industry would adapt IFRS with considerabale changes, based on Indian conditions.

Convergence to IFRS would provide opportunity to industries to raise funds outside India, attract foreign investment and also help in maintaining the transparency levels, he said.

Indian companies need to have a level playing field along with international companies since Ind-AS, the Indian IFRS equivalent, does not allow multiple approaches of financial reporting, which is possible in IFRS, said Dolphy D'Souza, IFRS Leader - India at Ernst & Young Pvt Ltd.

He said there were two chief distinctions between Ind-AS and IFRS. Companies adopting IFRS approach had three choices of reporting gains and losses as per IS-19 standard, viz, recognising gains and losses fully in the profit and loss account, recognising gains and losses in the reserve account and the corridor approach, where gains and losses are not recognised up to a certain corridor level, but recognised beyond the limit.

The Ind-AS, however, adopted only one approach, of recognising actual gains and losses fully, eliminating the benefits of multiple choices approach, he said.