IFRS implementation by banking companies unlikely before 2015: ICAI
April, 10th 2013
Recommendations on implementation of IFRS standards by banking companies have been given to the Reserve Bank of India but are unlikely to come into force before 2015, according to accounting regulator ICAI.
Going forward, Indian accounting standard would be converged with the International Financial Reporting Standards (IFRS).
ICAI President Subodh Kumar Agrawal said that IFRS would not be implemented before 2015 for banking companies. "That is our suggestion," he told reporters here.
The Institute of Chartered Accountants of India (ICAI) has already given a tentative roadmap for implementation of IFRS standards to the Corporate Affairs Ministry. All companies having networth of over Rs 1,000 crore should implement IFRS from April 1, 2015.
Those having networth of over Rs 500 crore and up to Rs 1,000 crore, IFRS has to be implemented from April 1, 2016 and for companies, having networth of below Rs 500 crore but listed, the timeframe would be April 1, 2017.
However, the roadmap is not applicable for banking, insurance and NBFC companies. "For NBFCs, we have recommended a three-phase approach based on their networth, just like for corporates," he noted.
Meanwhile, ICAI has set up an advisory board on eXtensible Business Reporting Language (XBRL).
XBRL which would replace PDF format, is anticipated to bring in more transparency when it comes to furnishing of financial statements by companies.
Agrawal said that currently the board includes representatives from RBI, IRDA and Corporate Affairs Ministry, among others.
XBRL reporting format would be applicable for all listed companies, entities having paid up capital of Rs 5 crore and above and firms with turnover of Rs 100 crore and more.
To act against erring members at the earliest, ICAI has decided to complete hearing on all cases pending before its disciplinary committee by April 30. "When I joined in February, 90 cases were pending for hearing before the disciplinary committee," Agrawal said.
The hearings would be held at different places including Mumbai, Kolkata, Chennai and Ahmedabad, he added. Meanwhile, ICAI has expressed its "strong reservations" about the Finance Ministry's decision to exempt bank branches -- having less than Rs 20 crore advances -- from yearly audits. "We have strong reservations (about it)... We have already written to the Finance Ministry on the issue," Agrawal said.
According to him, the institute's apprehension is that a huge fund would go out of the audit purview. Those branches having advances of less than Rs 20 crore would be audited every five years while those above this threshold would have yearly audits.
"We are still trying to persuade the government that this (threshold) should be brought down to Rs 6 crore," he added.