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Distinguish between IFRS and AS

RAMANJU (here to updating the knowledge) (485 Points)

24 June 2009

What are the main differences between IFRS's and AS's under Co. Act, 1956?

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CA Devanshi Gandhi (Ajani) (FCA DISA Mcom CIFRS & LLB) (9060 Points)
Replied 24 June 2009

Significant Difference between Accounting Standards and IFRS/IAS


AS-1 Disclosure of A/c-ing Policies

Points	AS-1	IFRS/IAS-1
Statement showing changes in equity	does not prescribe such statement	F.S include statement showing changes in equity
presumption about fair presentation	no such presumption	application of IFRS lead to fair presentation
specific disclosure for departure from IFRS/AS	no such disclosure	specific disclosure

AS-3 Cash Flow Statement

Points	AS-3	IFRS/IAS-7
separate disclosure of Extra Ordinary Items	required	does not require
distinction b/w Bank borrowings & Bank overdraft	no distinction	make distinction.Bank Borrowings are considered financing activities and Bank O.D are considered part of cash equivalents.

AS-4 Contingencies & Event occuring after the B.S Date

Points	AS-4	IFRS/IAS-10
treatment of Proposed Dividend	treated as adjusting event	Proposed Dividend after balance sheet date but before the date of the F.S is non-adjusting event.

AS-5 Net Profit or Loss for the period,Extraordinary Items,Changes in A/c-ing Estimates

Points	AS-5	IFRS/IAS-8
treatment of Prior Period Items	disclosed in the F.S for the period in which the error is found.i.e. Prospective effect	Subject to practicability,an entity shall correct material prior period errors retrospectively by: (a) Restating the comparative amounts for the prior period presented in which the error occured,or (b) if the error occured before that restating the opening balances of assets,liabilities and equity.
Disclosure of Extraordinary Items	specifically require certain items to be disclosed as extraordinary items	prohibits any items to be disclosed as extraordinary items

AS-6 Depreciation Accounting

Points	AS-6	IFRS/IAS-16
Change in Depreciation method	regarded as change in an accounting policy, therefore retrospective effect required.	regarded as change in an accounting estimate, therefore retrospective effect not required.

AS-6 Depreciation Accounting

Points	AS-6	IFRS/IAS-16
Change in Depreciation method	regarded as change in an accounting policy, therefore retrospective effect required.	regarded as change in an accounting estimate, therefore retrospective effect not required.


AS-10 A/c-ing for Fixed Assets

Points	AS-10	IFRS/IAS-16
Revaluation of F.A	allowed	allowed but with detailed guidelines.

AS-12 A/c-ing for Government Grant

Points	AS-12	IFRS/IAS-20
measurement of non-monetary grants	does not state about Fair Value	talks about Fair Value
Grant in the nature of Promoter Contribution	credited to Capital Reserve	treated as deffered income
Refund of Govt. Grant	Extraordinary Item as per AS-5	Change in Estimate

AS-9 Revenue Recognisition

Points	AS-9	IFRS/IAS-18
provision for Revenue Swaps (Exchange Transaction)	no provision	contain the provision of Revenue Swap. When goods or services are exchanged or swapped for goods or services which are of a similar nature & value, the exchange is not regared as a trxn which generates revenue. When goods or services are exchanged for dissimilar goods or services, the ex. is regarded as trxn which generate revenue.

AS-17 Segment Reporting

Points	AS-17	IFRS-8
Applicability	Level-1 & Non-SMEs	Enterprise whose equity or debt security are publicly traded or in the process, but does include other.
A/c-ing Policies	Segement information should be prepared in conformity with Accounting Policies adopted for preparation & presentation of A/c-ing policies	does not prescribe the a/c-ing policies to be used. Therefore, permits alternative basis of A/c-ing for segment.




AS-18 Related Party Disclosure

Points	AS-18	IFRS/IAS-24
State controlled Entities	excludes from RP	within the scope of RPD
Pricing Policy	no specific disclosure require	needs to be disclosed

AS-19 A/c-ing for Leases

Points	AS-19	IFRS/IAS-17
Applicability to use land	not applicable	applicable
Onerous lease	not dealt however AS-29 deals for the purpose of making provision for losses	IAS-37 deals with onerous contract


AS-20 Earning Per Share

Points	AS-20	IFRS/IAS-33
Share application money	treated as potential equity shares	does not specify anything
Disclosure	parent's seprate F.S as well as in Consolidated F.S	Consolidated F.S
Guidance	provides guidance on the basis of apportionment of profits over different classes of equity shares	silent about it

AS-21 Consolidated F.S

Points	AS-21	IFRS/IAS-27
Goodwill	determind on historical cost basis; no prescripttion for amortisation of goodwill	determined at fair value;amortisation is provided.
Differential period	dates of parent & subsidiary,if do not coincide should not exceed six months.	three months
Deferred Tax	no principle	if IT have been paid on inter company profits on assets remaining within the group,those tax are deffered until the related asset are sold in an arm's length transaction.
Exception	severe long term restriction	no exception

AS-22 A/c-ing for Taxes on Income

Points	AS-22	IFRS/IAS-12
Recognition of DTA	to the extent there is resonable or virtual certainty of income	to the extent that it is probable that the enterprise will have sufficient taxable profit.
Reconciliation	does not require numerical reconciliation between tax expenses and pre-tax a/c-ing profit	requires.


AS-23 A/c-ing for investmets in Associates in Consolidated F.S

Points	AS-23	IFRS/IAS-28
Goodwill	required to be separately identified & disclosed within the investment	does not require so
equity method, where?	entity prepares consolidated F.S	in separate F.S of the investor

AS-24 Discontinuing Operation

Points	AS-24	IFRS-5/IAS-35
Name	u know	IFRS-5 "Non current assets held for sale & discontinued operation"
Disclosure when	after "Initial disclosure event"	after the classification of non-current asset as 'held for sale'
valuation of asset	cost less depreciation	after the classification of non-current asset as 'held for sale' ,it will be carried at lower of carrying amount and fair value.
Disclosure	through notes to accounts.Only amount of gain or loss is disclosed on the face of P & L a/c.	A/L presented separately on the face of the B.S & income on the face of the income statement.

AS-26 Intangible Assets

Points	AS-26	IFRS-5/IAS-38
Revaluation of Assets	not permitted	permitted

AS-29 Provisions, Contingent Liabilities & Contingent Assets

Points	AS-29	IFRS/IAS-37
disclosure of Contingent Assets	not required	required