While India Inc eagerly awaits guidelines on the International Financial Reporting Standards (IRFS), experts say a lot remains to be done before they can be introduced. Given that, an extension of the November deadline is anticipated.
?There could be some delay in the implementation of IFRS whereby regulators could ask companies to implement the new accounting standards in different tranches depending on the company size and other factors,? said a source.
In August 2009, a meeting among different regulators had taken place, and it was decided that more stakeholders will be engaged in the process. A meeting of the high-powered core group on IFRS was held by the ministry of corporate affairs. It was chaired by Anurag Goel, secretary, ministry of corporate affairs, and was attended by Sebi chairman CB Bhave, chairman of the National Advisory Committee on Accounting Standard (NACAS) YH Malegam, T Mohandas Pai of Infosys, RBI deputy governor Usha Thorat, Institute of Chartered Accountants of India president Uttam Agarwal and other senior government officials and CFOs.
Speaking to various experts involved in the implementation of IFRS, they noted that Indian companies are lagging behind due to the lack of expertise and knowledge in this field. Sai Venkateshwaran, head of IFRS and partner, assurance, at Grant Thornton said that top chartered accountant firms like Ernst & Young, PriceWaterHouse Coopers and Grant Thornton are involved in deploying their staff to Indian companies for training. ?IFRS needs a different level of training. We are in talks with large corporates to help them in this area,? he said.
Vandana Saxena Poria CEO, Get Through Guides (GTG), a publishing and training company, said that the syllabus for commerce and chartered accountancy courses need a complete revamped. ?In India, there is a dearth of expertise and experience in IFRS. We are looking at roping in Indian universities and working with companies to impart training to employees. There is also a need for Indian universities to work closely with universities abroad to offer courses on IFRS,? she said, adding that the Institute of Chartered Accountants of India has recently come up with a certification in IFRS, but there is still a lot to be done.
Grant Thornton?s Venka-teshwaran noted that once companies start using IFRS, their credibility would go up, investors will feel reassured and raising capital will become easier. Aziz Tayyebi, financial reporting officer with the Association of Chartered Certified Accountants, the global body for professional accountants, noted that while companies will have to make a one-time investment in IFRS they will see huge savings over a period of time.
?From our European experience in IFRS, we think there will be huge savings for a company,? he said.
To put things in perspective, all listed companies will be required to prepare and present financial statements using the accounting principles and methods stipulated in IFRS, starting from the accounting period on or after April 1, 2011. With IFRS in place, the historic cost will be substituted by fair values for several balance sheet items, which would enable a corporate to know its true worth.
