ICAI Submits Revised IFRS Conversion Road Map Ahead of Annual Audit Season
March, 28th 2014
India’s Institute of Chartered Accountants of India (ICAI) has recommended a new timeline for the convergence of Indian Accounting Standards (AS) with the International Financial Reporting Standards (IFRS).
The revised road map was finalized last week by the ICAI during its annual meeting from March 20 to 22, and submitted to the Ministry of Corporate Affairs (MCA) for approval.
While a phased convergence of AS with the IFRS was first initiated in April 2010 with a target date of April 2015 for full implementation, slow progress led the Ministry of Corporate Affairs to abandon this timeline in favor of a new road map for convergence that was originally expected to be finalized by late March 2014.
According to the revised roadmap from the ICAI, companies with a net worth of over INR5 billion (US$83 million) will be required to transition to IFRS standards from April 1, 2016.
According to the ICAI, this new timeline will provide companies with “ample time” to prepare for the shift.
These changes will only implement the converged standards for consolidated financial statements, with no implications on tax or the computation of managerial remuneration and dividend distribution.
India’s eventual convergence with the IFRS will differ from “adoption” in that the AS will be altered to conform with the IFRS rather than requiring full-fledged adoption of the standards outlined by the International Accounting Standards Board (IASB). This will preserve differing terminologies between the IFRS and AS while adding some new concepts and models.
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