ICAI should speed up efforts to converge with IFRS, says KPMG

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New Delhi, Jul 10: The Institute of Chartered Accountants (ICAI) will have to expedite its endeavours for converging Indian accounting standards with global norms (International Financial Reporting Standards) IFRS with deadline in this regard nearing, according to global consultancy firm KPMG.

Companies would initially have to converge with IFRS 1, which is a first-time adoption of IFRS by 2009, before fully adopting this global accounting system by 2011, KPMG executive director Neville M Dumasia told PTI.

The initial convergence is a transitory provision, which provides for certain exemptions for Indian companies to comply totally with IFRS. This would also help the companies to have comparative figures based on IFRS, when they fully converge with these international norms in 2011, the consultancy firm said.

“Companies will have to converge with the IFRS 1 by 2009 so that they are in a position to fully converge with IFRS by 2011. Therefore, they should take a serious call on the matter,” Neville said.

Emphasising the fact that “The ministry of corporate affairs (MCA) will have to actively take initiatives for amending the Companies Act 1956”, he said all firms should gear up to prepare their financial statements of 2009 as per IFRS 1.

Recently, in a presentation KPMG had said ICAI was yet to adopt IFRS 1.

However, president of ICAI, Ved Jain said it was working on the issue. “We have worked out the road map for IFRS 1 and we are working on it simultaneously along with converging other standards with IFRS,” he said.

Jain said the institute has already constituted four groups to tackle the issue. One group would look into the technical aspects of accounting standards and develop the standards. Other group would examine the issues related to seeking views and approvals from MCA and regulators like Sebi and RBI for certain amendments.

“The other two groups are educating corporates and training members of ICAI to learn the nuances of IFRS,” he added.