IFRS course to be implemented in April 2011 may be watered down a tad
November, 26th 2010
The International Financial Reporting Standards (IFRS), which are on course to be implemented in April 2011, may be watered down a tad to help companies get a breather while switching to the stringent conditions, . The ministry of corporate affairs has drawn up a clear roadmap for the implementation of Indian Accounting Standards in convergence with IFRS, a circular issued earlier in the month said.
"The IFRS mode will be applicable for a few big listed companies though issues that relate to tax and the manner in which it should be calculated, need to be addressed," a government official said.
In the first phase, companies on the Nifty 50 and BSE Sensex, firms whose securities are listed on stock exchanges outside the country, and all those having a net worth of R1,000 crore, would switch to the new accounting system.
Insurance and banking companies, however, would be required to migrate to the IFRS methodology from 2012, the circular said.
The Institute of Chartered Accountants of India (ICAI) has also set up a group, which includes members from the finance ministry, for identifying tax issues that may arise from the convergence issue.
The group has prepared a draft report identifying certain options that could be adopted to achieve tax neutrality.
R Bandyopadhyay, secretary, ministry of corporate affairs has already held a meeting with members of the group. It has instructed the group to come up with a specific proposal, in a time-bound manner, that will be revenue-neutral as well as acceptable to the finance ministry, while being compatible with the IFRS.