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IFRS Transition

Sana Malik (CA) (29 Points)

13 September 2010

Can someone please confirm the exact date of IFRS conversion in phases and also the date of transition i.e preparation of opening balance sheet.

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(Guest)

Hi,

Phased roadmap for IFRS implementation:

A careful analysis of the press release reveals that MCA recognizes two sets of Accounting standards in India as as detailed below :

The press release suggests that IFRS will be implemented in India in 3 Phases starting from as at april,1 2011 as detailed below :

1) Indian accounting standards converged with IFRS

Phase I

( applied for following categories of companies will need to convert their opening balance sheets as at april1,2011 in compliance with IFRS

Companies part of NSE – Nifty 50

Companies part of BSE – Sens*x 30

Companies whose shares or other securities are listed outside India

Companies,listed or not,having a net worth in excess os Rs.1000 crores

Phase II

Companies, listed or not,having a networth exceeding Rs.500 crores but not exceeding Rs.1000 crores will need to convert their opening B/s as at april 1,2013 in compliance with IFRS.

Phase III

All listed companies having a net worth of RS.500 crores or less will need to convert their Opening b/s as at april,1 2014 in compliance with IFRS.

Small and medium companies need not comply with IFRS.

The following companies can continue to follow the existing Indian AS and are not required to follow IFRS

Non-listed companies with a networth of Rs.500 crores or less and whose shares or other securities are not listed on stock exchange outside India.

Small and medium companies (SMCs)

However these companies have an option to follow IFRS

2) Indian accounting standards notified in Companies(Accounting Standards) Rules 2006

These are the standards used presently by Indian companies under the companies act,1956.

Companies not falling within the threshold limits for IFRS compliance in the respective phases shall continue to use these standards in the preparation and presentation of financial statements.

3) For all practical purposes, we have to consider a third set of AS also.

These are the standards issued by ICAI and which shall be applicable to all non-corporate entities. ICAI now modifying all AS inline with IFRS.

Note :

It should be noted that the documents released by MCA is only a press release

And eventually what will be binding on companies will be the relevant amendements to the companies act,1956 in this regards.

Regards

K.Ilayaraja.

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Sana Malik (CA) (29 Points)
Replied 13 September 2010

what about the opening balance sheet?? as on 01.04.2010 or 01.04.2011

(Guest)

IFRS Convergence - Approach

In principle decision has been taken not to adopt IFRS as it is, but to formulate
indian standards corresponding to each IFRS in vogue.

This implies that ICAI has to re-issue indian standards corresponding to IFRS
wherever differences need to be ironed out and those standards shall thereafter
be considered by the National Advisory Committee on Accounting Standards(NACAS).


The standards would then be recommended by the NACAS to the govt. to be notified under
the companies act,1956.

The advantages in formulation of indian standards corresponding to IFRS, instead of
adopting IFRS as it is,


are as follows :

Wherever options are provided in IFRS either for treatment,measurement,or
presentation, indian standard can eliminate one or more of the options and retain what is
suited for domestic countries.

similarly,
Indian standards can prescribe disclosures which are not contained in IFRS.

Indian standards can also use terminologies different from those used in IFRS,
so long as the change does not result in deviation in the accounting principle in vogue.


The above mentioned differences, even if incorporated and permitted to continue
in the indian standards would not be construed as resulting in non-compliance with
IFRS and india would still be perceived as an IFRS compliant country.

Regards

K.ilayaraja

Attached File : 51 47 analysis of mca.doc downloaded: 212 times

Kumar (CA) (666 Points)
Replied 11 December 2010

Opening balance sheet needs to be prepared as at 31.03.2010

This is if the Company wants to publish comparative amounts for y.e 31.03.2012 or Q1 ended 30.06.2011 financials i.e. 31.03.2011 and 30.06.2010 respectively.

In such case, Statement of Financial position (SFPO) as at 31.03.2010 shall be prepared and all IFRS adjustments to assets and liabilities and its corresponding impact on retained earnings shall be given on 31.03.2010 Statement of Financial position.

This is because IFRS adjustments attributable to difference in accounting treatment adopted under IGAAP as compared to IFRS till 31.03.2010, should not affect the comparative amounts given in financials prepared on or after 01.04.2011