Indian accounting standards will be fully in line with the International Financial Reporting Standards (IFRS) from April 1, 2011. This was decided by the Institute of Chartered Accountants of India (ICAI) at its 269th Council meeting here today.
To begin with, these standards will apply only to public listed companies. Other companies will be brought under IFRS ambit in a phased manner. "The International Accounting Standards Board (IASB) has come out with an exposure draft for small and medium enterprises. We need to give our suggestions for the draft to be finalised sometime late next year. Thereafter we will get to know when these standards can be applied for SMEs, said Sunil Talati, president, ICAI.
Once the new norms become applicable, all accounts prepared in India will be of uniform global standards. Indian chartered accountants will also be recognised world wide, Talati added. "It would ease a lot of problems faced during cross border mergers and acquisitions. This will also provide the necessary impetus to mutual recognition agreements currently under discussion with countries like the UK and Singapore and Australia, he added.
At present, of the 39 IASB accounting standards, 28 are already practised by Indian chartered accountants (CA), eight are under preparation, one is a guidance note already corresponding to IFRS and two do not hold relevance in the Indian context. Around 102 countries have already converged their accounting standards.
According to Talati, the date of implementation has been decided as 2011 because few standards require basic amendment in schedule 6, 14 and others in the Companys Act itself, besides few others that require cosmetic changes.
"ICAI will carry out massive training programmes across its branches, training centres, regional councils and chapters for all CAs to equip them with the knowledge of all the new standards," added Talati. ICAI in future will also look at convergence in auditing standards as well as internal audit.