One of the fundamental problems with recognising the IFRS framework for taxation effective April 1 arises due to the fact that not all companies will transition to IFRS from this date.

India Inc. is at an inflection point with respect to the impending adoption of International Financial Reporting Standards (IFRS).

Companies are making a concerted effort to prepare for this transition. However, one issue that is currently being deliberated by companies and regulators is the taxation framework (both direct and indirect) applicable for corporates that follow the IFRS-converged standards.

One of the fundamental problems with recognising the IFRS framework for taxation effective April 1, 2011, arises due to the fact that not all companies will transition to IFRS from this date.

It may be difficult to justify how two Indian corporate entities are taxed differently for similar transactions just because they follow different accounting frameworks (Indian GAAP or IFRS-converged standards).

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