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14 views9 pages

Ifrss

Uploaded by

muskan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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International

Financial Reporting
Standards
1
Introduction
International Financial Reporting Standards, commonly called IFRS, are
accounting standards issued by the IFRS Foundation and the International
Accounting Standards Board (IASB).
They constitute a standardized way of describing the company's financial
performance and position so that company financial statements are understandable
and comparable across international boundaries.
They are mainly guideline-based standards that draw the standards and guidelines
for financial reporting.
The Ministry of Corporate Affairs (MCA) has issued 39 converged Accounting
Standards on 16th February 2015. It is called ‘IND-AS’.

PAGE 02
2
Financial Statement Components
Statement of Statement of changes in
financial position equity for the period

Statement of Statement of cash flows


profit and loss for the period

PAGE 03
3
Needs
• To ensure a general understanding of the best global accounting practices

• To make the financial statements comparable, transparent and reliable

• For promoting foreign investment and boost industrial growth

• For standardizing financial reporting and accounting across the world

• For elimination of information barriers for users of financial information.

PAGE
4 04
Benefits
Beneficial to the Economy: Beneficial to Investors:
If the accounting standards are converged it will It makes it much easier for them to study, compare
promote international business and increase the and analyse the financial statements of foreign
influx of capital into the country. This will help companies since the financial statements are made
India’s economy grow and expand. using the same set of standards.

Beneficial to the Industry: More Transparency:


With globally accepted standards the industry can Convergence will make it easier to understand the
also surge ahead. So convergence is important for financial statements. And this will generate better
the industry as well. It will allow the industry to transparency and raise the confidence of the
lower the cost of foreign capital. investors to invest funds.

PAGE
5 05
Challenges
Difference in GAAP and IFRS:
Adoption of IFRS means that the entire set of financial statements will be required to undergo a drastic change.
The differences are wide and very deep routed. It would be a challenge to bring about awareness of IFRS and its
impact among the users of financial statements.

Training and Development:


Lack of training and academic knowledge in IFRS is a challenge as far as Indian economy is concerned. There
is a need to impart education and training on IFRS and its application. Thus adequate training should be given to
the stakeholders.

Legal and Regulatory Considerations:


Presently, the financial reporting requirements are authorized by various regulatory authorities in India and their
provisions override other laws and regulators. IFRS does not recognize such overriding laws. So, such laws and
regulatory in India will create challenges to IFRS and its application.
PAGE 06
6
Challenges
Financial reporting system:
In India financial reporting is done according to standards issued by ICAI (Institute of Chartered Accountants of
India). We need to amend the same to suit the requirements of IFRS. The information systems should be
designed to capture new requirements related to fixed assets, segment disclosures, related party transactions etc.

Fair value measurement:


IFRS uses fair value base to measure majority of items in the financial statements. The use of fair value
accounting can bring a lot of volatility and subjectivity in financial statements.

Taxation:
Present scenario, Indian Tax laws do not recognize the Accounting Standards. To entertain immediate change in
the Indian Tax Law is the major challenge faced by the Indian Law makers.

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7
Conclusion
In a nutshell, the benefits of IFRS outweigh the challenges with
advantages like timely financial information for decision-
making, better comparison of financial statements, better access
to the capital market, and consistent and transparent reporting.

PAGE 08
8
Thank You
By Shachi Verma(1002), Poorva Mehra(1006), Chetana
Agarwal(1009), Muskan Jain(1011), Vanisha
Khemka(1013)

PAGE 09
9

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