Gujarat Inc. will have to restructure company configuration ahead of the introduction of International Financial Reporting Standards (IFRS) and Direct Tax Code (DTC) for mitigating losses, a top consultancy firm said here today.
"In Gujarat's scenario, proposed introduction of IFRS and DTC from April 1, 2011, will have high impact on Infrastructure companies here," Executive Director, Pricewaterhouse Cooper, Nikhil Bhatia said.
The notification on introduction of IFRS is likely to be introduced in November this year, industry sources have said.
"Once guidelines for IFRS are issued, the company balance sheets will have to be restated to reflect fair value of assets," Bhatia said.
A listed entity will spend anything between Rs 30 lakh to Rs 2 crore to make transition to IFRS depending on the company size, industry sources said.
"Assets of infrastructure companies will reflect substantial growth, once IFRS is introduced. Unless such companies change their company structures the incidence of taxation shall be high," he said.
Referring to the tax part, Bhatia said "IFRS in conjunction with DTC will lead to heavy tax payouts under normal provisions of Minimum Alternate Tax (MAT).