India’s Ministry of Corporate Affairs has released a revised roadmap for implementation of Indian Accounting Standards as part of its effort to converge with International Financial Reporting Standards.
The roadmap applies to companies other than banks, insurance companies and non-banking finance companies. The new standards take effect on a voluntary basis for accounting periods beginning on or after April 1, 2015, and on a mandatory basis for accounting periods beginning on or after April 1, 2016.
Hans Hoogervorst, chairman of the International Accounting Standards Board, praised the new roadmap, but acknowledged that there are some differences in Indian Accounting Standards from full IFRS.
“India’s recent decision to adopt Ind AS, which is close to IFRS, is a momentous step that demonstrates the country’s focus on raising standards and increasing the appeal of Indian companies to foreign investors,” Hoogervorst said at a conference Thursday in Mumbai, India organized by the IFRS Foundation and KPMG. “Ind AS should only be seen as a stepping stone towards full IFRS adoption. Otherwise, Indian companies risk incurring the full costs of making the transition to a new standard without getting the full benefit, such as better access to capital and at a lower cost. Only India can make the decision about full IFRS adoption.”
Indian Accounting Standards are based on IFRS but have some carve-outs. Nevertheless, Indian officials have indicated that they plan to move to full IFRS eventually. In a recent speech, the IASB pointed out, Indian Minister of Finance Arun Jaitley said there is an urgent need to converge the current Indian accounting standards with IFRS.
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