India is scheduled to begin using International Financial Reporting Standards in less than six months, but the country may be making several key changes in the standards prior to the rollout.
The Economic Times of India reported that the Indian government is looking to allow an option in the accounting for foreign exchange differences that arise because of currency derivatives. The option would allow companies to avoid reporting a loss on the profit-and-loss statement and instead simply carry forward the value to a future quarter.
Indias National Advisory Committee on Accounting Standards also wants to permit companies to avoid taking mark-to-market losses on their foreign currency convertible bonds. The advisory committee had earlier sought an exception to allow real estate companies to recognize revenue under the percentage completion method instead of waiting for a project to be fully completed and handed over to customers.
The exceptions and carve-outs are controversial, however, and some accountants in India are worried that foreign investors will not consider Indian financial statements to be in accordance with IFRS.
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