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IFRS in India...

A
Research Report
Submitted for
the partial fulfillment of MBA (Sem – III & IV) 2012-13 as a subject Management Research Project MRP
on

A Study of the Need &
Adoption of IFRS in India.
Submitted to:

Submitted By

Professor Hardik Shah

Mr. Mukeshkumar Rajmal Jain

&

Roll No. 1414

Dr. Naresh Patel

Center for Management Studies,
Dharmsinh Desai University, Nadiad.

Contents
Page
1. Introduction
Indian Accounting Standards

1

Need for Universal GAAP

4

2. Overview
What is IFRS?

6

Why IFRS?

6

Benefits of Adopting IFRS

7

IFRS Challenges

8

List of IFRS

9

List of IAS

10

3. IFRS and Indian GAAP

12

4. IFRS -A Comparison with Indian GAAP (Detail)

15

Agenda for Discussion

15

General Approach

15

Accounting Policy Change

16

Consolidation Policy

17

Provisions & Contingencies

19

Property, Plant and Equipments

21

Leases

23

Financial Instruments

24

Taxes

26

Business Combinations

28

Areas involving “Choices”

30

5. Presentation / Disclosures Differences

31

Financial Statements

32

Cash flow Statements

34

Events after Balance Sheet

36

Segment Reporting

37

Related Party Transactions

38

Discounted Operations

39

6. Literature Review

40

Global Context

40

Indian Context

43

RESEARCH METHODOLOGY

RATIONALE FOR STUDY:
International Financial Reporting Standards (IFRS) is gaining momentum throughout the world as a single, consistent accounting framework and is positioned to become the pre dominant GAAP in the near future. More than 100 countries have moved to, or base their local standards on IFRS. Indian Accounting Standards have not kept pace with changes in IFRS. There are significant differences between IFRS and I-GAAP, because Indian standards remain sensitive to the legal and economic environment. The use of different accounting frameworks in different of the same underlying economic transactions creates confusion for users of financial statements. This confusion leads to in efficiency in capital markets across the world. Therefore, increasing complexity of business transactions and globalization of capital markets call for a single set of high quality accounting standards.

OBJECTIVES OF THE STUDY:
1.
2.
3.
4.

To study the Needs and Adoption process of IFRS in India.
To study the Challenges Associated with IFRS in India.
To study the utility for India in adopting IFRS.
To study the Difference between Indian GAAP & IFRS.

SCOPE OF STUDY:
 IFRS known as International Reporting Standards
 International Accounting Standards ( IAS’s) and Interpretations issued by the former IASC and SIC continue to applicable unless and until they are amended or withdrawn.
 IFRS apply to the general purpose financial statements and other financial reporting by profit oriented entities – those engage in commercial, industrial , financial, and similar activities , regardless of their legal form.

 Entities other than profit oriented business entities may also find IFRSs appropriate.
 General purpose financial statements are intended to meet the common need of the shareholders, creditors, employees, and the public at large for information about entity’s financial position, performance, and cash flows.

 Other financial reporting includes information provided outside financial statements that assists in the interpretation of a complete set of financial statements or improves users’ ability to make efficient economic decisions.

 IFRS apply to individual company and consolidated financial statements.
 A complete set of financial statement includes a balance sheet, an income statement, a cash flow statements, a statement showing either all changes in equity or changes in equity other than tho se arising from investments by and distributions to owners, a

summary of accounting policies and explanatory...
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