The apex body for chartered accountants ICAI today said the new accounting regime will change the way firms report their financial statements as the new norms require them to make more disclosures.

The new regime would bring in accounting based on 'fair value' model in various cases as well as separate standards for financial instruments.

The system has made departure from the International Financial Reporting Standards with respect to classification of Foreign Currency Convertible Bonds (FCCBs) and regarding recognition of bargain purchase gain arising on a business combination.

The companies would also have options not to comply with IFRS-converged Indian Accounting standards related to classification of a loan liability in case any loan condition is not met, recognition of investment property using fair value model, recognition of lease rentals, among others.

The government has notified the rules for Indian Accounting Standards (Ind AS) which will be mandatory for companies from April 1, 2016.

Ind AS norms, which are converged with global standards IFRS, can be followed by corporates on a voluntary basis from April 1 this year.

The Institute of Chartered Accountants of India (ICAI) newly elected president Manoj Fadnis today said that "there will be some impact (on the financial statements) as higher levels of disclosures will be required and for the first time there will be more 'fair value' accounting".

Additionally, Fadnis also said that the new accounting norms "have a well defined standard in place for financial instruments which would be made applicable".

"So there will be some changes in which financial statements are reported," he told reporters here.

Talking about the carve outs in IFRS-converged Ind As, Fadnis said that while those pertaining to FCCBs and bargain purchasing are mandatory the other carve outs are optional.

"We have two mandatory carve outs which are principle based standards and it is in the national interest why we are holding on to them... we will continue the dialogue with International Accounting Standards Board (IASB) and see that over a period of time the carve outs are minimised," he said.

"While we would encourage the companies to follow these standards in all other areas for certain other reasons if the Indian corporates do not want to follow the international treatment we have given them a option," Fadnis noted.

He said that if the firms exercise these options they would be need to make proper disclosures to keep investors adequately informed.

Observing that the carve outs would not put companies at a disadvantage, Fadnis also said that the new norms will help bring in "more transparency" as additional information would now be provided in the financial statements.