International Financial Reporting Standards carve-outs wide-ranging
May, 16th 2011
Converged Indian Accounting Standards are notified with some major carve-outs and deferrals of certain critical standards and interpretations to suit the local purposes apart from major departures for the first time convergence. The Ministry is reportedly open for more carve-outs if the industry requires.
The carve-outs originally suggested by the ICAI in the Exposure Draft were very minimal and restricted to the definition of related party disclosures whether to include brothers, sister, father mother of key individuals as close family members which was considered as matching with the social environment of India, and eliminating the corridor approach' in accounting for post-employment benefit schemes.
Carve-outs in the finalisation stage range from presentation issues to fundamental IFRS accounting principles such as elimination of fair value option in investment property, deferral of lease interpretation and service concession arrangements, widening the scope of other comprehensive income, deferral of certain exchange fluctuation loss, adopting percentage of completion basis revenue recognition in real estate development business, to list a few.