ICAI suggests revised IFRS roadmap, to start from April 2016
March, 25th 2014
Revising its earlier roadmap, Institute of Chartered Accountants of India (ICAI) has recommended that companies, having net worth of over Rs.500 crore, implement new accounting standards that converge with global norms from 1 April 2016.
The ICAI, the country’s apex accounting watchdog, on Monday said the revised schedule would provide companies “ample time” to comply with standards that converge with International Financial Reporting Standards (IFRS) norms. The norms converged with the IFRS are referred as Ind AS (Indian Accounting Standards). As per the new roadmap, Ind AS is to be implemented for preparing consolidated financial statements of listed and unlisted companies starting from 1 April 2016. It would be applicable for entities with more than Rs.500 crore net worth from the accounting year starting on or after 1 April 2016, with previous year comparatives in Ind AS for the year 2015-16.
“The stand alone financial statements will continue to be prepared as per the existing notified Accounting Standards which would be upgraded over a period of time,” ICAI said in a statement.
Earlier ICAI had recommended implementation of the converged standards (Ind AS) from 1 April 2015 in phases.
The accounting watchdog’s recommendation is to implement Ind AS only for consolidated financial statements. This would have the advantage that Ind AS would have no implications on tax as well as on computation of managerial remuneration and dividend distribution, among others, the statement said.
For such purposes, the existing notified accounting standards would continue to be used as is the practice in almost all countries that have adopted or converged with IFRS, it added. ICAI president K. Raghu said the implementation of Ind AS from 1 April 2016 would allow industry ample time to prepare themselves with certain subsequent revisions and amendments after 2011.
“...the aforesaid time is sufficient to implement Ind AS for all listed companies and unlisted companies having net worth in excess of Rs.500 crore in one go, instead of implementing Ind AS in phases, as was laid down in the previous roadmap,” he noted.
The revised roadmap, which was finalized by the ICAI council during its meeting from 20 to 22 March, has been submitted to the corporate affairs ministry, “which is expected to take decision in the matter shortly”.
India is only converging with IFRS and not implementing it.