RESEARCH REPORT

ON

“COMPARATIVE STUDY ON INDIAN ACCOUNTING

STANDARD V/S IFRS”

Submitted in partial fulfillment of the requirement for the award

of Degree of Master of Business Administration from APJ
Abdul Kalam Technical University, Lucknow

Submitted by

BHAVYA ANAND
Roll no: 1901240700023
MBA (Batch 2019-21), 4th Semester

Under the guidance of

Kirti Verma
Associate Professor
ICCMRT

INSTITUTE OF CO-OPERATIVE & CORPORATE MANAGEMENT

RESEARCH AND TRAINING, 21/467, RING ROAD, INDIRA NAGAR,
LUCKNOW-226016
 DECLARATION

I, BHAVYA ANAND, a student of Master of Business Administration (MBA) Programme at the

Institute of Co- operative & Corporate Management Research and Training, Lucknow hereby

declare that all the information, facts and figures used in this research project titled

“COMPARATIVE STUDY ON ACCOUNTING STANDARD AND IFRS” have been

collected by me. I also declare that this project report has been prepared by me and the same has

never been submitted by the undersigned either in part or in full to any other University or Institute

or published earlier.

I confirm that this project report is my own original work and that I have not copied anything

from other published or unpublished work without their permission.

This information is true to the best of my knowledge and belief.

Date: BHAVYA ANAND

 ACKNOWLEDGEMENT

I would like to express my gratitude to all those who gave me the possibility

to complete this research report. I want to thank Principal Dr. K

ANBHUMANI of, INSTITUTE OF CO-OPERATIVE & CORPORATE

MANAGEMENTRESEARCH AND TRAINING, LUCKNOW for giving

me this opportunity.

I would like to thank my mentor Ms. Kirti Verma for giving me the

opportunity to do such an interesting and wide topic i.e. “COMPARATIVE

STUDY ON ACCOUNTING STANDARD AND IFRS”. She always

guided me in the right direction whenever I asked forhelp.

I also want to thank my friends and respondents for helping me out in adverse

situations. Lastly I would like to thank GOD for giving me the patience

throughout my project and my parents who supported me and also, for

extending their support. Without all, I could not have successfully completed

my report properly in time with adequate data and relevant substance in it.

Thanking You.
 PREFACE

In spite of the theoretical gained through classroom study, a person is incomplete if not subjected

to practical exposure of real corporate world and may have to face hurdles, which will be difficult

to overcome without any first-hand experience of business.

In the context, research program has been designed to make the person aware of the happenings

of the real business world. The Research Report entitled “COMPARATIVE STUDY ON

ACCOUNTING STANDARD AND IFRS” has been done as a completion part of MBA

Degree.

I whole heartedly appreciated the harmonic atmosphere provided to me by the staff of marketing. The

data has collected at primary source through interviews with the customer & discussions with the

retailer of different-different sections. The data which used in this project report are secondary data.

These secondary data so obtained were mostly collected from the management. It would not have

been possible to complete my research report in a manner.

 TABLE OF CONTENTS

Contents
FRONT PAGE………………………………………………………………………………..I

CERTIFICATE BY MENTOR………………………………………………………………II

DECLARATION…………………………………………………………………………….III

PLAGIARISM FREE CERTIFICATE……………………………………………………...IV

ACKNOWLEDGEMENT……………………………………...………………………….…V

PREFACE………………………………………………………………………………...….VI

CHAPTER-1 INTRODUCTION ......................................................................................... 8

CHAPTER-2 REVIEW OF LITERATURE ...................................................................... 42

CHAPTER-3 OBJECTIVE OF RESEARCH .................................................................... 60

CHAPTER-4 RESEARCH METHODOLOGY ................................................................ 62

CHAPTER-5 DATA ANALYSIS &INTERPRETATION ............................................... 67

CHAPTER-6 FINDINGS &RECOMENDATION ........................................................... 81

CHAPTER-7 CONCLUSIONS ......................................................................................... 84

BIBLIOGRAPHY…………………………..…………………………………………..…..VII

ANNEXERS………………………………………………………………………..…..……IX
INTRODUCTION
India, one of the fastest growing global economies is on the verge of converging with International

Financial Reporting Standards (IFRS). As on date 123 countries across the globe have converged

with IFRS, India is soon to join the bandwagon.

The Ministry of Corporate Affairs in its press release dated 25.2.2011 notified 35 Indian

Accounting Standards converged with International Financial Reporting Standards (henceforth

called Draft IND AS). The Ministry of Corporate Affairs will implement the IFRS converged

Indian Accounting Standards in a phased manner after various issues including tax related issues

are resolved with the concerned Departments. Consequently, the companies listed outside but

carrying their operations `in India will need to convert their accounts from Indian GAAP to IFRS

while some of the companies would like to see how their how their present financial statements

would look if these were prepared as per IFRS. Though, there has been considerable delay in the

implementation of these standards, efforts are on the run. The newly revised Schedule VI which

is completely based on IAS 1 is a clear evidence of being optimistic on convergence with IFRS.

While similarities between the Indian Accounting standards and IFRS do exist, the changes

required to convert to international standards are both numerous and complex. It is essential for

companies and finance professionals to initiate their IFRS learning curve and to begin the design

of IFRS adoption strategy.

Accounting Standards are used as regulatory mechanisms for preparation of financial reports

In almost all the countries of the world. Accounting Standard are written policy documents issued

by expert accounting body or government or other regulatory body covering the aspects of

recognition, measurement, treatment, presentation & disclosure of accounting transaction in the

financial statement. Objective of accounting standard is to standardize the diverse accounting

policies & practices with a view to eliminate to the extent the non-comparability of financial

statements & add the reliability to the financial statements.

The rapid growth of international trade & Internationalization of firms create need of global

harmonization of accounting standards as a company having presence in different countries has

to prepare financial reports as per GAAP of the country where it operates. Under this global

business environment, companies are in need of common accounting language in the form of

harmonized accounting standard across the world.

In India the Institute of Chartered Accountants of India (ICAI) has formed Accounting

Standards Board (ASB) in 1977, upon which the responsibility was set to develop accounting

standards to be issued and revised in the country from time to time.

Though ASB is shaped by ICAI, it is independent in the formulation of accounting standards.

ASB comprises members from various fields and organization and it also takes in to consideration

customs, usages and business environment prevailing in the country while formulating the

standards.
Emerging economies like India is gradually integrating with advanced economies through cross

-border trade and investments and all this has been possible due to globalization. Since the

formation of WTO, money, as an investment, is the most fungible asset which flow freely across

national boundaries. So, the regional accounting standards (languages) are no more justified as

the shareholders are no more limited within the jurisdiction of respective sovereign countries but

spread across the continents. Hence, for better understanding and to enhance the transparency and

comparability of financial reports, which enable users to take appropriate decisions, there was felt

an urgent need for widely accepted, high quality financial reporting. This lead to the requirement

of harmonization of Accounting Standards or moving towards a global Accounting Standards

which are better known as International Financial Reporting Standards (IFRS) issued by

International Accounting Standards Board (IASB) and comprises of International Accounting

Standards (IAS) issued by International Accounting Standards Board, International Financial

Reporting Standards (IFRSs), Interpretations issued by Standing Interpretations Committee (SIC)

and International Financial Reporting Interpretations Committee (IFRIC). The use of a single set

of high quality accounting standards would facilitate investment and other economic decisions

across borders, increase market efficiency, and reduce the cost of raising capital.

“International Financial Reporting Standards (IFRS) is a set of globally acclaimed principle based

standards of financial reporting issued by the International Accounting Standards Board (IASB).

In these principles based financial reporting standards, accounting treatment follows from the

definition of an accounting element and classification thereof. In rule based reporting standard,

various exceptions are attached to achieve a standardised practice but accounting measurement
would widely deviate from the substance of the transaction”

IFRSs are promulgated by the IASB, an international standard-setting body based in London. The

IASB places emphasis on developing standards based on sound, clearly stated principles, from

which interpretation is necessary (sometimes referred to as principles-based standards). This

contrasts with sets of standards, like generally accepted accounting principles (GAAP), which

contain significantly more application guidance. These standards are sometimes referred to as

rules-based standards)(According to one school of thought, since IFRS are primarily principles-

based standards, the IFRS approach focuses more on the business or the economic purpose of a

transaction and the underlying rights and obligations instead of providing prescriptive rules (or

guidance).IFRS provides guidance in the form of principles.

Approximately 120 nations and reporting jurisdictions permit or require IFRS for domestic listed

companies, although approximately 90 countries have fully conformed to IFRS as promulgated

by the IASB and include a statement acknowledging such conformity in audit reports.

All the countries which has converged their accounting standards as per IFRSs may found an

impact on the financial reporting. Financial reporting in India is converging into IFRS from Indian

GAAP (IGAAP) through Indian Accounting Standards (Ind ASs) in a phased manner. Therefore

this research paper tries to examine the impact of the convergence of IFRSs on the financial

reporting of some Indian companies which are already using Ind ASs for financial reporting
 History of Indian Accounting and IFRS

A) History of Indian Accounting standards

Indian Accounting Standards (abbreviated as Ind-AS) in India accounting standards were issued

under the supervision and control of Accounting Standards Board (ASB), which was constituted

as a body in the year 1977. ASB is a committee under Institute of Chartered Accountants of India

(ICAI) which consists of representatives from government department, academicians, other

professional bodies viz. icsi, icai, representatives from ASSOCHAM, CII, FICCI, etc.

The Ind AS are named and numbered in the same way as the corresponding International Financial

Reporting Standards (IFRS).National Advisory Committee on Accounting Standards (NACAS)

recommends these standards to the Ministry of Corporate Affairs (MCA). MCA has to spell out

the accounting standards applicable for companies in India. As on date MCA has notified 39 Ind

AS. This shall be applied to the companies of financial year 2015-16 voluntarily and from 2016-

17 on a mandatory basis. Based on the international consensus, the regulators will separately

notify the date of implementation of Ind-AS for the banks, insurance companies etc. Standards

for the computation of Tax have been notified as ICDS in February 2015.
 History of Indian Accounting and IFRS

A) History of Indian Accounting standards

Indian Accounting Standards (abbreviated as Ind-AS) in India accounting standards were issued

under the supervision and control of Accounting Standards Board (ASB), which was constituted

as a body in the year 1977. ASB is a committee under Institute of Chartered Accountants of India

(ICAI) which consists of representatives from government department, academicians, other

professional bodies’ viz. icsi, icai, representatives from ASSOCHAM, CII, FICCI, etc.

The Ind AS are named and numbered in the same way as the corresponding International Financial

Reporting Standards (IFRS).National Advisory Committee on Accounting Standards (NACAS)

recommends these standards to the Ministry of Corporate Affairs (MCA). MCA has to spell out

the accounting standards applicable for companies in India. As on date MCA has notified 39 Ind

AS. This shall be applied to the companies of financial year 2015-16 voluntarily and from 2016-

17 on a mandatory basis. Based on the international consensus, the regulators will separately

notify the date of implementation of Ind-AS for the banks, insurance companies etc. Standards

for the computation of Tax have been notified as ICDS in February 2015.
 Applicability of Indian Accounting Standards

(Ind AS)

Voluntary compliance
Any company may comply with Indian AS for Financial statements beginning with period on or

after 1st April 2015, with the comparatives of period ending on 31stMarch, 2015, or thereafter.

Mandatory Compliance
It is mandatory for the following companies to comply with Indian AS for financial statements

beginning with period on or after 1st April 2016, with the comparatives of period ending on 31st

March, 2016, or thereafter.

 Companies whose securities are listed or are in process of listing in any stock exchange

in India or outside India and having net worth of Rs. 500 crore or more;

 Companies other than above and having net worth of Rs. 500 Crore or more;

 Holding, subsidiaries, joint venture or associates of above companies.

It is also mandatory for the following companies to comply with Indian AS for financial

statements beginning with period on or after 1st April 2017, with the comparatives of period

ending on 31st March, 2016, or thereafter.

 Companies whose securities are listed or are in process of listing in any stock exchange

in India or outside India and having net worth of less than Rs. 500 crore or more;
  Companies other than above and having net worth of Rs. 250 Crore but less than Rs. 500

Crore or more;

 Holding, subsidiaries, joint venture or associates of above companies.

 Securities listed or in process of listed in SME Exchange are not included in above

companies.

 The net worth is calculated based on standalone financial statements of company as on

31st March 2014 or first audited financial statements after this date.

The companies which were not in existence or exiting companies falling under above rules of

applicability of AS, the net worth is calculated based on the first audited financial statements

ending after that date. If these companies are meeting the net worth limit for first time at the end

of financial year, then they shall follow the Indian AS from next accounting year. For example if

the companies meet the net worth limit as on 31st march 2017 then the Ind AS will be applicable

from financial year 2017-18.

 Ind AS will be applied to both standalone financial statements and consolidated financial

statements.

 Overseas subsidiaries, associates, joint ventures and other similar entities of an Indian

company may prepare its standalone financials statements in accordance to requirement

of specific jurisdiction.

 Once any Indian company applies Ind AS voluntarily or mandatory, then it must follow

them consistently for future years.

Exemptions
The insurance companies, banking companies and non-banking finance companies shall not be

required to apply Indian Accounting Standards (Ind AS) for preparation of their financial

statements either voluntarily or mandatory as specified in sub-rule (1) of rule 4.

General Instruction for application of Ind As as per Rule 3

(1) Indian AS is intended to be in conformity with the provisions of laws. However, if due to

amendments in the law, a particular Indian AS is found to be not in conformity with such law, the

provisions of the said law shall prevail and the financial statements shall be prepared in

conformity with such law.

(2) Indian AS is intended to apply only to items which are material.

(3) The Indian AS having paragraphs in bold italic type and plain type, have equal authority.

B) History of International Financial Reporting

Standards
International Financial Reporting Standards (IFRS) are designed as a common global language

for business affairs so that company accounts are understandable and comparable across

international boundaries. They are a consequence of growing international shareholding and trade

and are particularly important for companies that have dealings in several countries. They are

progressively replacing the many different national accounting standards. They are the rules to be

followed by accountants to maintain books of accounts which are comparable, understandable,

reliable and relevant as per the users internal or external.

IFRS, with the exception of IAS 29 Financial Reporting in Hyperinflationary Economies and

IFRIC 7 Applying the Restatement Approach under IAS 29, are authorized in terms of the

historical cost paradigm. IAS 29 and IFRIC 7 are authorized in terms of the units of constant

purchasing power paradigm.

IFRS began as an attempt to harmonize accounting across the European Union but the value of

harmonization quickly made the concept attractive around the world. However, it has been

debated whether or not de facto harmonization has occurred. Standards that were issued by IASC

(the predecessor of IASB) are still within use today and go by the name International Accounting

Standards (IAS), while standards issued by IASB are called IFRS. IAS was issued between 1973

and 2001 by the Board of the International Accounting Standards Committee (IASC). On 1 April

2001, the new International Accounting Standards Board (IASB) took over from the IASC the

responsibility for setting International Accounting Standards. During its first meeting the new

Board adopted existing IAS and Standing Interpretations Committee standards (SICs). The IASB

has continued to develop standards calling the new standards "International Financial Reporting

Standards".
 Applicability of International Financial Reporting

Standards

Voluntary Compliances
Companies can voluntarily adopt Ind AS for accounting periods beginning on or after 1 April

2015 with comparatives for period ending 31 March 2015 or thereafter. However, once they have

chosen this path, they cannot switch back.

Mandatory Compliances

Phase I
Ind AS will be mandatorily applicable to the following companies for periods beginning on or

after 1 April 2016, with comparatives for the period ending 31 March 2016 or thereafter

 Companies whose equity and/or debt securities are listed or are in the process of listing

on any stock exchange in India or outside India and having net worth of 500 crore INR

or more.

 Companies having net worth of 500 crore INR or more other than those covered above.

 Holding, subsidiary, joint venture or associate companies of companies covered above.

Phase II
Ind AS will be mandatorily applicable to the following companies for periods beginning on or

after 1 April 2017, with comparatives for the period ending 31 March 2017 or thereafter:
  Companies whose equity and/or debt securities are listed or are in the process of being

listed on any stock exchange in India or outside India and having net worth of less than

rupees 500 Crore.

 Unlisted companies other than those covered in Phase I and Phase II whose net worth are

more than 250 crore INR but less than 500 crore INR.

 Holding, subsidiary, joint venture or associate companies of above companies.

Clarifications
The notification has clarified many previously open questions, some of which have been

described below:

Net worth

 It has been clarified that net worth will be determined based on the standalone accounts
of the company as on 31 March 2014 or the first audited period ending after that date.

 Net worth has been defined to have the same meaning as per section 2(57) of the

Companies Act, 2013. It is the aggregate value of the paid-up share capital and all

reserves created out of the profits and securities premium account, after deducting the

aggregate value of the accumulated losses, deferred expenditure and miscellaneous

expenditure not written off, as per the audited balance sheet, but does not include reserves

created out of revaluation of assets, write-back of depreciation and amalgamation.

Standalone and consolidated financial statements
 It is now clear that Ind AS will apply to both consolidated and stand-alone financial

statements of a company covered by the roadmap. This is helpful as companies will not

have to maintain dual accounting systems.

Foreign operations
 It is a relief that an overseas subsidiary, associate or joint venture of an Indian company

is not required to prepare its stand-alone financial statements as per the Ind AS, and

instead, may continue with its jurisdictional requirements. However, these entities will

still have to report their Ind AS adjusted numbers for their Indian parent company to

prepare consolidated Ind AS accounts.

Applicability to insurance, banking and non-banking

financial companies
 Insurance, banking and non-banking financial companies shall not be required to apply

Ind AS either voluntarily or mandatorily. However, it appears (though not clarified), that

if these entities are subsidiaries, joint venture or associates of a parent company covered

by the roadmap, they will have to report Ind AS adjusted numbers for the parent company

to prepare consolidated Ind AS accounts.

Early adoption of standards
 The debate on two of the most significant standards, revenue recognition and financial

instruments has now been settled with them being notified. Interestingly, India will be one

of the first countries to mandatorily adopt these standards from 1 April 2015 while the rest

of the world will follow from 2017. These two standards will have a significant effect on

entities, impacting not only their financial results but also catalysing numerous

organizational and business changes.

Others
 There was hope that companies will be given an option to prepare their financial

statements as per IFRS issued by the IASB (the true IFRS), which has been now ruled out.

 The rules specify that in case of conflict between Ind AS and a law, the provisions of the

law shall prevail and the financial statements shall be prepared in conformity with it.

With IFRS set to become the future Indian GAAP and IFRS being a moving target, Indian

companies should actively monitor and participate in the IASB’s standard setting process.
Source: The Economics Times (20th march 2016)

Over half of India Inc not ready for Ind AS implementation: PwC

With less than a fortnight left for formal adoption of Indian Accounting Standards, over half of

the companies aren't ready for the transition, says a PwC survey. The audit and tax consulting

firm believes that the level of preparedness for Ind AS adoption goes beyond financial reporting,

requiring significant organizational changes. "More than 50 per cent of the respondents are yet to

plan or commence implementing changes at an organizational level.” Also, 39 per cent of them

are yet to start or plan for the impact assessment of Ind AS adoption," says a PwC quoting the

findings from a February 2016 survey among 100 companies across industry sectors and size.

About 63 per cent of them are covered under mandatory phase I adoption of Ind AS. Known as

Ind AS, new accounting and reporting standards that are in line with global practices will kick in

from April 1 in a phased manner. Nearly half (45 per cent) believe management approach for

identification of segments will have a major impact on disclosures.

Sumit Seth, a partner at Price Waterhouse & Co, the accounting arm of PwC India, advices

companies to follow a step-by-step approach to Ind AS. "Since the impact of Ind AS adoption

cascades beyond accounting resulting in several organizational changes impacting direct and

indirect taxes, contractual arrangements with customers, suppliers, lenders, and incentive policies

including timely communication with various stakeholders, companies will have to follow a step-

by-step approach to ensure a smooth transition," he said.

Three-fourths of the respondents expect they will have to report additional non-Gaap financial

measures once they switch to Ind AS, says the survey, adding that even though the impact of

adopting Ind AS will vary from company to company and from across the sectors, better planning

will enable firms to address some implementation challenges in advance.

As per the survey, 45 per cent believe that management approach for identification of segments

will have a significant impact on the disclosures made by them. According to PwC, financial

services, retail and consumer companies as well as pharm and life sciences will be the most

impacted sectors once the transition takes place.

In an effort to converge with International Financial Reporting Standards (IFRS), the

Ministry of Corporate Affair (MCA), Government of India released 35 India accounting

standards (known as “Ind AS”) on February 25, 2011, without announcing the date on

which these would be applicable. These Ind AS contain a number of deviations from

IFRS that may be segregated into five broad categories.

Category 1: Deviations from IFRS that result in Ind AS financial statements

not being in compliance with IFRS. For example, under IFRS, a foreign

currency convertible bond is treated as a hybrid instrument having a liability

and a derivative component. Ind AS 32 requires that the derivative component

is treated as equity, if the exercise price is fixed in any currency.

Category 2: Removal of Options. Ind AS financial statements are compliant

with IFRS, although accounting treatment choices are eliminated or

minimized. For example, International Accounting Standard (IAS) 40

permits both the cost and the fair value model for subsequent measurement

of investment properties. Ind AS 40 does not permit the use of the fair value

model.
Category 3: Additional options provided under Ind AS. The financial

statements do not remain compliant with IFRS if the entity has chosen these

options. For example, Ind AS 101 allows a first-time adopter to use the

transitional date circumstances to measure noncurrent assets held for sale and

discontinued operations at the lower of carrying value and fair value less cost

to sell.

Category 4: Deferment or nonadoption of certain IFRS. Ind AS statements

are not IFRS-compliant. For example, the next IFRS pronouncements have

not been issued under Ind AS:

IFRS 9, Financial Instruments

IAS 26, Accounting and Reporting by Retirement Benefit Plans

IAS 41, Agriculture

(IFRIC) 2, Member’s Share in Cooperative Entities and Similar Instruments

IFRIC 15, Agreement for Construction of Real Estate

633

Category 5: Regulatory and practice-related differences. For example, the

differences necessary to ensure conformity with Indian Companies Act 1956

and requirement of presentation of annual accounts under Schedule VI of the

same Act.
Ind AS has maintained certain general differences with the IFRS, as described

next.

Ind AS uses some terms that differ from IFRS. For example, the term

“balance sheet” is used instead of “statement of financial position,” and the

term “statement of profit and loss” is used instead of “statement of

comprehensive income.” The words “approval of the financial statements for

issue” are used instead of “authorization of the financial statements for issue”

in the context of financial statements considered for the purpose of events

after the reporting period.

Under IFRS 1, transitional provisions in other IFRS do not apply to a first-

time adopter’s transition to IFRS, unless otherwise permitted by IFRS. Ind

AS standards do not contain transitional provisions of corresponding

IFRS/IAS standards.

Notification/applicability of certain standards/appendices of Standards such

as IFRIC 12 (Appendix A to Ind AS 11), Standing Interpretations Committee

(SIC) 29 (Appendix B to Ind AS 11), IFRIC 4 (Appendix C to Ind AS 17),

IFRS 4 (Ind AS 104), and IFRS 6 (Ind AS 6) has been deferred to a later date.

However, Ind AS 8 states that an entity may consider the most recent

pronouncements of IAS 8 in deciding the accounting treatment for

transactions not covered by Ind AS.

The conceptual framework for financial reporting has not been notified under

Ind AS. However, certain Ind AS (e.g., Ind AS 1 and Ind AS 8) refer to the
framework. Further, differences may arise, depending on the manner in

which the Companies Amendment Bill is legislated, particularly with regard

to provisions relating to Section 100, Section 78, Schedule VI, Schedule XIV,

consolidation requirements, etc. In addition, differences may arise due to

future changes introduced in IFRS and the manner in which they are

incorporated in Ind AS.

 IFRS: Global Scenario

As we are living in a global village, no national border can create a great restriction on capital
flight between any two different nations. Companies (including small companies) seek capital at
the best price wherever it is available. Investors and lenders seek investment opportunities
wherever they can get the best returns commensurate with the risks involved. To assess the risks
and returns of their various investment opportunities, investors and lenders need financial
information that is relevant, reliable and comparable across borders. The amounts of cross-
border investment are enormous.

The use of one set of high-quality standards by companies throughout the world improves the

comparability and transparency of financial information and reduces financial statement

preparation costs. When standards are applied rigorously and consistently, capital market

participants receive higher quality information and can make better decisions. Thus, markets

allocate funds more efficiently and firms can achieve a lower cost of capital.

IFRS Standards constitute a globally recognised set of standards for the preparation of financial

statements by business entities. IFRS Standards prescribe the items that should be recognised as

assets, liabilities, income and expenses; how to measure those items; how to present them in a

set of financial statements; and related disclosures about those items.

It has been witnessed a continued progress in both the improvement of IFRS Standards and
global adoption of those Standards. So far 17 IFRS, 26 IAS, 19 IFRIC, 8 SIC has been
implemented. It has been found that a growing number of jurisdictions requiring the use of
IFRS Standards.

Out of 150 jurisdictions together they represent around 98 per cent of the world’s gross
domestic product (GDP) studied 126 (84 per cent) require IFRS Standards for all or most
domestic listed companies and financial institutions. Another 13 jurisdictions (9 per cent) permit
or require the use of IFRS Standards for at least some of those entities.27,000 of the 49,000
companies listed on the 88 largest securities exchanges in the world use IFRS Standards. 90%
of the companies that don’t use IFRS Standards are in China, India, Japan and the United States
 IFRS in India
India has not adopted IFRS Standards rather adopted Indian Accounting Standards (Ind AS) that

are based on and substantially converged with IFRS Standards as issued by the IASB. The ICAI

prepares an exposure draft of the Ind AS on the basis of IFRS Standards. After considering

comments, the proposed final Ind AS is approved by the ICAI Council and then adopted by the

Ministry of Corporate Affairs via public notification.

Ind AS are IFRS Standards as issued by the Board with some modifications, including changes
of terminology; elimination of options, addition of disclosures; elimination of disclosures that
are considered to be contradictory to local law, elimination of other disclosures, addition of
presentation requirements, addition of (and, in some cases, deletion of) examples and
modifications of principles for recognizing assets, liabilities, income and expenses. Some of
those modifications are mandatory, and some are optional. Each individual Ind AS contains an
Appendix that explains the modifications.

All companies, including unlisted companies, are permitted to use Ind AS for accounting
periods beginning on or after1 April 2015. Ind AS is being phased in for listed companies
(other than those on the SME Exchange) and large unlisted companies in 2016and 2017.
Companies that do not use Ind AS will continue to apply existing Accounting Standards
(IGAAP). Some companies may voluntarily provide investors with IFRS financial statements in
addition to preparing Ind AS financial statements.

On 18 January 2016, the Government of India announced that commercial banks, insurance
companies, and non-bank companies will be required to prepare their financial statements using
Ind AS starting 1 April 2018.
Comparative analysis of I GAAP , IFRS And Ind
AS has been made in table given below:
BASIS INDIAN GAAP IFRS IND AS

Presentation of AS 1 disclosure of accounting IAS 1 presentation Ind AS 1 presentation of

financial policies. of financial statements financial statements
statements
AS 5 net profit / loss for the period,
prior period items and change in
accounting policies
Components of (a) Balance sheet, (a) Statement of financial position (a) balance sheet at
financial (b) Statement of Profit & loss . the end of the peiod
statements (c) Cash flow statement (b) Statement of income with profit including changes in
(d) Explanatory notes with / loss equity
significant accounting policies (c) Statement of cash flows (d) (b) Statement of
Statement of changes in equity profit / loss
Comparative figures for one year
(e) Notes with summary of (c) Cash flow
are also to be presented.
significant accounting policies statement
Comparative figures for one year are (d) Explanatory
also to be presented. notes with
significant
accounting policies
Comparative figures for
one year are also to be
presented.
Formats of Under Schedule VI of companies Act Only illustrative formats have been No format prescribed .
financial 1956 have provided given.
statements
Inventories AS 2 valuation of inventories IAS 2 inventories Ind AS 2 inventories

Scope No scope exemption for any IAS 2 does not applies to stock of such Same as IFRS
inventories held by commodity material
traders
Classification of Classification of inventories as per No specific requirements. Same as IFRS
inventories schedule VI :
- Raw material,
Classification should be appropriate to
- Work in progress
entity.
- Finished goods
- Stock in trade
- Stores and spares
- Loose tools
- Others
Cash flow AS 3 cash flow statements IAS 7 statement of cash flows Ind AS 7 statement of cash
statements flows
Bank overdraft Financing activities Cash &cash equivalents Same as IFRS
Cash flows from to be classified as operating, Cash flow statements do not reflect any Same as IFRS
extra ordinary financing and investing activities. items as extraordinary
items

Interest and For financial entities: Interests May be classified as Same as indian GAAP
dividend paid/received are to be received as operating/investing/financing activities
financing activities. in a manner consistent from time to
Dividend paid to be classified as time.
financing activities.
Events occuring AS 4 – contingencies and events IAS 10 – events after the reporting Ind AS 10 – events after

after the reporting occurring after the balance sheet date period the reporting period
period- primary
literature
Dividends dividends declared or proposed Declared dividend to be trrecognised in Same as IFRS
after balance sheet date but before the period when it is declared
approval of financial statements will
have to be recorded as a liability.

Accounting AS 5- net profit or loss for IAS 8 – Accounting policies, changes Ind AS 8 – Accounting
policies, changes the period, prior period items in accounting estimates and errors policies, changes in
in and changes in accounting Accounting Estimates and
accounti policies Errors
ng estimates
and
errors- primary
literature

changes in Changes in accounting Requires retrospective application of

accounting policies policies should be made only changes in accounting policies by Same as IFRS
if it is required by law for adjusting the gap balance of every
compliance with an AS or for affected element of equity for the
appropriate presentation of earliest previous amount given and
the financial statements on a therefore the different comparative
prospective basis.
amounts for each period presented as if
the new accounting policy had always
been applied, unless transitional
provision of an AS requires otherwise.
Definition of prior AS 5 covers only income and IAS 8 covers all the items in financial Same as IFRS
period items expenses in the definition of prior statements as propr period items
period items
Property , plant AS 6- DEPRICIATION IAS 16- Property, plant and equipment IND AS 16- Property, plant
and equipment ACCOUNTING AS 10 - IFRIC 1 – changes in existing and equipment
ACCOUNTING FOR FIXED decommissioning, Restoration and
ASSETS Similar Liabilities

Scope There is No exemption from AS 10 Property under development for future Same as IFRS
for property under development for use as property held for investment is
future use as property held for excluded from the scope of IAS 16 and
investment. covered by IAS 40, investment
property.
Change in method Requires retrospective re- It will be treated as change in Same as IFRS
of depreciation computation of depreciation and any accounting estimates and applied
excess or deficit is required to be prospectively
adjusted in the period in which such
change is affected. Such a change is
treated as a change in accounting
policy and its effect is quantified
and dis
Replacement costs closed.

Revaluation No specific requirements on Revaluations are required to be made Same as IFRS

frequency of revaluation. with sufficient regularity to ensure that
the carrying amount does not differ
materially from that which would be
determined using fair value at the end
of the reporting period.

Residual value Estimates of residual value are Estimates of residual values are Same as IFRS
not required to be updated at year required to be updated at least once at
end year end

Construction AS 7 construction contracts IAS 11 construction contracts Ind AS 11 construction

contrcats- primary contracts
literature
Measurement of AS 7 does not refer to fair value and Under IAS 11 , construction revenue is Same as IFRS
construction states that con trcat revenue is measured at the fair value of the
revenue measured at the consideration consideration received or receivable.
received
 AS 9- Revenue recognition IAS 18 – Revenue Ind AS 18 – Revenue Ind
Revenue- primary Guidance Note on accounting for AS 18 – appendix A, B, C
literature

Definition Revenue is the gross inflow of cash, Revenue is that the gross influx of
receivables or other consideration economic advantages throughout the Same as IFRS

arising in the course of the ordinary amount arising within the course of the
activities from sale of goods, from normal activities of associate degree
the rendering of services, and from entity once those inflows end in will
the use by others of enterprise increase in equity, apart from will
resources yielding interest, royalties increase about contributions from
and dividends.
equity participants. Amounts collected
on behalf of third parties such as sales
and service taxes and value added
taxes are excluded from revenues.
Revenue AS 9 does not contain any such Under IAS 18 revenue from sale of Same as IFRS
recognition stipulation goods cannot be recognised where
entity retains continuing managerial
ownership or effective control over the
goods
Revenue fron AS 9 allows complete service IAS 18 allows only percentage of Same as IFRS
service rendering contract method or proportionate completion method
completion method
Interest income AS 9 requires interest income to be IAS 18 requires effective interest Same as IFRS
recognised on a time at method prescribed in IAS 39 to be
proportionate basis followed for interest of financial gain
recognition.

Foreign exchange - AS 11 - The Effects of Changes in IAS 21 - The Effects of Changes in Ind AS 21 - The Effects of
-- primary Foreign Exchange Rates Foreign Exchange Rates Changes in Foreign
literature Exchange Rates

functional and Foreign currency is a currency other Functional currency is the Same as IFRS
presentation than the reporting currency which is currency of the primary economic
currency the currency in which financial environment in which the entity
statements are presented. There is no operates. Foreign currency could be a
concept of functional currency currency aside from the purposeful
currency.
forward contracts Forward contracts not intended for Accounted for as a derivative. Same as IFRS
trading or speculation purposes.

AS 11 provides separate treatment Makes no distinction between an Same as IFRS

Treatmnent for for integral and non integral integral foreign operation and non
integral and non operations. integral operation as done in AS 11.
integral operations
Government AS 12 - Accounting for Government IAS 20 - Accounting for Government Ind AS 20 - Accounting
Grants - primary Grants Grants and Disclosure of Government for Government Grants
literature Assistance and Disclosure of
Government Assistance

Government Does not deal with disclosure of IAS 20 Deals with government grants Same as IFRS
assistance government assistance other than in as well as disclosure of government
the form of government grants. assistance.

No specific guidance. Benefit of government loans with Same as IFRS

government loans below market rate of interest should be
with below market accounted for as government
rate of interest grantmeasured as the difference
between the initial carrying amount of
the loan determined according to IAS
 39 and the resultants proceedings
received.

non-monetary If the asset is given by the The asset and the grant may be The asset and the grant
government grants government at a discounted price, accounted at fair value. Alternatively, should be accounted at fair
the asset and the grant is accounted these can be recorded at nominal value.
at the discounted purchase price.. amount

Investment AS 13 Accounting for investment IAS 40 investment property Ind AS 40 investment

property: primary property
literature

Measurement Classified as long term investment Investment property can be measured Investment properties are
and measured at cost less using the cost or the fair value model, measured using cost model
impairment. As per schedulr VI , with changes in fair value recognised only.
they are classified as non current in profit or loss.
investments.
Business AS 14 – Accounting for IFRS 3 (2008) – Business Ind AS 103 – Business
combinations- Amalgamations Combinations Combinations
primary literature
Business There is no comprehensivestandard Applies to a transaction or otherevent in Similar to IFRS except that
Combinations dealing with all which an acquirer obtains control of Ind AS103 contains

– scope business combinations. Guidance for one or more businesses.IFRS 3 does guidance on common
amalgamations is contained in AS not apply to: i) The formation of a joint control transactions.
14. AS 21 deals with arrangement inthe financial statements
investments in subsidiaries and AS of the joint arrangement itself ii)
10 deals with a demerged unit Combinations of entities or business
acquired in a slump sale. under common control iii) Acquisition
of an asset or group of assets that do
not constitute a business.
Valuation of assets Valuation at carrying value Valuation at fair value Same as IFRS
and liabilities
Employee benefits: AS 15 (Revised 2005) – Employee IAS 19 - Employee Benefits Ind AS 19 - Employee
primary literature Benefits Benefits

Definitions The distinction between short-term The distinction between short-term and Same as IFRS
and other long-term employee other long-term employee benefits
benefits depends on whether they depends on whether they are due to be
fall wholly due within 12 after the settled within 12 months after the end
end of the reporting period in which of the reporting period in which the
employees render the related service.
the employees provided the related
service.
Borrowing costs- AS 16 - Borrowing Costs IAS 23 - Borrowing Costs Same as IFRS
primary literature
Scope No such scope exception similar to Borrowing costs need not be Same as IFRS
IFRS/ Ind AS is available. capitalized in respect of i. qualifying
assets measured at fair value (e.g.
biological assets) ii. Inventories
manufactured or produced, in large
quantities on a repetitive basis This is
an option
components of No reference to effective interest Descriptions of specific components are Ind AS 23 - Borrowing
borrowing costs rate. AS 16 requires amendment on linked to effective interest rate. Costs
AS 30 becoming mandatory.

Disclosure of Does not require such disclosure Requires disclosure of capitalization Same as IFRS
capitalisation rate rate used to determine the amount of
borrowing cost
Segments- primary AS 17 segment reporting IFRS 8 operating segments Same as IFRS
literature
Scope Applicability of the standard is not IFRS 8 is applicable to the separate and Same as IFRS
linked to the listing status of an consolidated financial statements of an
entity. entity/groupwith a parent:
• Whose debt or equity instruments are
traded in a public market.
measurement Segment information is prepared in Segment profit or loss is reported on Ind AS 108 operating
conformity with the accounting the same measurement basis which is segments
policies adopted for preparing and used by the chief operating
presenting the financial statements decision maker. There is no definition
of the enterprise as a whole. for differential profits losses for
Segment revenue, segment expense, individual segments.
segment result, segment asset
and segment liability have been
defined.

Related Party AS 18 – Related Party Disclosures IAS 24 – Related Party Ind AS 108 is applicable to
Disclosures - Disclosures companies to which Ind
primary literature ASs
notified under the
Companies Act
apply.

definition of Parties are considered to be related A related party is a person or entity Same as IFRS
related party if at any time during the reporting that is related to the entity that is
period one party has the ability to preparing its financial statements
control the other party . (reporting entity):

definition of close There is no definition of close Close members of the family of a Same as IFRS
member of the member of the family. Instead the person are the family members who
family term may be expected to influence, and be
“relative” has been influenced by, that person in their
defined inrelation to dealings with the entity and include:
an individual as a) that person‟s children
thespouse, son, daughter, brother, and spouse or domestic partner;
sister, father, mother who may b) children of that person‟s
beexpected to influence, or be spouse or
influenced by, that individual in

his/her dealings with the reporting domestic partner; andc) dependents of

enterprise. that person or that person‟s spouse or
domestic partner.
items to be If an entity has related party If an entity has related party Similar to IFRS with the
disclosed transactions during the transactions during the period inclusion
period covered by the covered by the financial statements, of father, mother, brother
financial statements,the enterprise the amount of such transactions and and sister
should the amount of outstanding balances in the definition of close
disclose the volume of transactions including commitments need to be members
either as an amount or as an of the family
disclosed.
appropriate proportion and amounts
or appropriate proportions of
outstanding items.
Leases – primary AS 19 – Leases IAS 17 – Leases Ind AS 17 – Leases
literature
interest in Leasehold land is recorded and Recognised as operational lease or Similar to IFRS except
leasehold land classified as fixed assets. finance lease as per definition and that a
classification criteria. An important property interest in an
thought in such determination is that operating
land has associate degree of indefinite lease cannot be accounted
economic life. for as
investment property as the
fair value
model is not permissible by
Ind AS 40.
 Lease payments under an operating Similar to Indian GAAP Ind AS 17 contains a carve
lease should be recognised as an out for
operating
expense in the statement of profit escalation of
lease rentals –
and loss on a straight-line basis out operating lease
recognition
of lease term unless another rentals
systematic basis is the better that are in line with the
expected
representative of the time pattern of
general inflation. Since
the user‟s benefit.Lease income
these are
from operational leases ought to be primarily to compensate the
recognised with in the statement of lessor
profit and loss on a straight-line for expected inflationary
basis over the lease term, unless value will increase, these
another systematic basis is more should not be
representative of the time pattern straight-lined by the lessor
within which profit derived from as well as the lessee.
the employment of the leased asset
is diminished.
Earnings Per Share AS 20 – Earnings Per Share IAS 33 – Earnings Per Share Ind AS 33 – Earnings Per
– Share
primary literature
Scope Applicability of the standard is not IAS 33 is applicable to the Ind AS 33 is applicable to
linked to the listing status of an separate and consolidated financial companies that have
entity. statements of an entity/group with a issued ordinary shares to
parent: which Ind ASs notified
• Whose ordinary shares or under the Companies Act
potential ordinary shares are traded in a apply.
public market (a domestic or foreign
stock exchange or an overthe- counter
market, including local and regional
markets); or • That files, or is in the
process of filing, its financial
statements with a securities
commission or other regulative
organisation for the
aim of issuing stock in a public market.

disclosure in AS 20 requires disclosure of basic When associate degree entity presents EPS is needed to be
separate financial and diluted EPS information both in each presented in
statements the separate and consolidated separate and consolidated financial Each consolidated as well
financial statements of the parent. statements, EPS is required to be as
presented only in the consolidated separate financial
financial statements. An entity could statements.
disclose EPS in its separate financial
statements voluntarily.
disclosure of There is No separate disclosure for The statement of comprehensive Same as IFRS
Earnings per Share EPS income will present basic and diluted
from continuing from continuing and discontinuing earnings per share from continuing
and discontinued operations.. operations and if
applicable, basic and diluted

operations earnings per share from

discontinued operations. EPS from
discontinued operations may
alternatively be disclosed in the notes.
Consolidated AS 21 - Consolidated Financial IAS 27 (2008) - Consolidated Ind AS 27 - Consolidated
Financial Statements and Separate Financial and Separate Financial
Statements – Statements Statements
primary literature IFRS 10 – Consolidated Ind AS 110 –
Financial Statements Consolidated
IFRS 12 – Disclosure of Financial Statements Ind
Interests in AS 112 – Disclosure of
Interests in Other Entities
Other Entities
Financial scope Indian GAAP does not specify A parent is required to prepare Ind AS does not mandate
Statements – entities that are needed to present consolidated financial statements presentation of financial
in which consolidated statements. if A parent need not prepare consolidated statements as these are
they their regulated by governing
consolidated financial statements financial statements only if all the
consolidate in in are presented then the financial following conditions are met: statutes in India.
investments with statements must be presented. The the entity is itself a wholly owned
subsidiaries Securities and Exchange Board of or a partially owned subsidiary and its
accordance India requires entities listed and to other owners have not objected to the
IAS 27. be listed to present consolidated entity not presenting consolidated
financial statements. statements;
the entity‟s debt or equity
instruments are not traded in a public
market;
the entity is not in a process of filing
its financial statements for the purposes
of issuing any class of instruments in a
public market; and The ultimate or
any intermediate parent of the entity
produces consolidated financial
statements available for public use that
comply with IFRSs.

potential voting Potential voting rights are not The presence and effect of potential Same as IFRS
rights contemplated in assessing control. rights that are
Presently in exercise and can be
converted , including potential voting
rights with another entity, are
contemplated when assessing control
uniform If not practicable to use uniform Consolidated financial statements Same as IFRS
accounting policies accounting policies in the should be prepared using common
preparation of consolidated financial accounting policies. No exception is
statements, that fact should be provided
disclosed together with the
proportions of the items in the
consolidated statements in which
different accounting policies have
been applied.
.

reporting dates The difference between the The difference between the reporting Same as IFRS
reporting date of the subsidiary and date of the subsidiary and parentmust
the parent company shallnot be be three months or less than three
more than six months. months..

Income taxes - AS 22: accounting for taxes on IAS 12: Income Taxes Ind AS 12 income taxes
primary literature income

Deferred income Deferred tax arises in respect of It is computed for temporary difference Same as IFRS
taxes recognition of items of profit or loss between the carrying amount of an
for the purpose of financial asset or liability in the statement of
reporting and for income tax financial position and its tax base.
purpose

Recognition of Deferred taxes are generally Deferred tax are recognized for all Same as IFRS
deferred tax assets recognized for all timing temporary difference between
and liabilities differences. accounting and tax base of assets and
liabilities except to the extent which
arise from (a) initial recognition of
goodwill (in case of deferred tax
liability) or (b) asset or liability in a

transaction which (i) is not a business

combination; and (ii) at the time of the
transaction, affects neither the
accounting nor the tax profit
Investments in AS 23 - Accounting for Investments IAS 28 - Investments in Associates Ind AS 28 - Investments in
Associates - in Associates in Consolidated Associates
primary literature Financial Statements

Vital influence It is the power to participate in the It is the power for participation in the Same as IFRS
financial and/or operating policy financial and operating policy
decisions of the investee but not decisions taken by the investee but not
control over those policies having control over those policies.

Potential Potential voting rights are not The existence and effect of potential Same as IFRS
Voting rights considered in assessing voting rights are considered when
significant influence. assessing significant influence .

scope Currently there is no exemption for Investments by venture capital Investments by venture
investments made by venture capital organizations, mutual funds, unit trusts capital organizations are
organizations, mutual funds, unit and similar entities including exempted from applying
trusts and similar entities from investment-linked insurance funds are equity method, if an
applying the equity method. The exempted from applying equity election is made to
limited revision to AS 23, on measure such investments
method,
becoming effective, eliminates this at FVTPL under Ind AS
difference between AS 23 and IAS 39
28.
share of losses Loss in excess of the carrying Losses recognized under the equity Same as IFRS
amount of investment is not method in excess of the investor‟s
recognized. investment in ordinary shares are
applied to other components of the
investor‟s interest such as long-term
loans

disposals No specific guidance. On disposal resulting in loss of Same as IFRS

significant influence, the remaining
investment is remeasured at fair value,
with gain or loss recognized in profit or
loss.
uniform If not practicable to use uniform Uniform accounting policies must be Uniform accounting
accounting policies accounting polices while applying followed while applying the equity policies must be followed
the equity method, that fact should method. No exception is provided. for like transactions and
be disclosed together with a brief events in similar
description of the differences circumstances unless it is
between the accounting policies.
impracticable to do so

separate f inancial At cost less impairment loss. Either at cost or at fair value as Same as IFRS
statements of the The limited revision to AS 23, on available for sale with changes in fair
investor becoming effective, eliminates this value recognized in other
difference between AS 23 and IAS comprehensive income. If measured at
28. cost (less impairment), on
classification as held for sale, IFRS 5
will apply.
Discontinuing AS 24 - Discontinuing Operations IFRS 5 - Non-current Assets Held for Ind AS 105 - Non-current
operations- primary Sale and Discontinued Operations Assets Held for Sale and
literature Discontinued Operations

recognition There is no standard dealing with Non-current assets to be disposed of Same as IFRS
and non-current assets held for sale are classified as held for sale when the
measurement though AS 10 deals with assets held asset is available for immediate sale
for disposal. Items of fixed assets and the sale is highly probable.
which are retired from active use
and be holded for disposal are stated
at the lower of their net book value
and net realisable value are shown
separately in the financial
statements.
non-cash assets AS 24 have no specific guidance Non-cash assets are to be classified as Same as IFRS
held for related to non-cash assets held for „held for distribution to owners‟ when
distribution to distribution to owners. the transaction is highly probable,
owners taking into account probability of
shareholders‟ approval, if required in

the jurisdiction..

classification An operation is classified as An operation is classified as Same as IFRS

discontinuing at the earlier of (a) discontinued when it has been disposed
binding sale agreement for sale of of or classified as item for sale.
the operation and (b) on approval by
the board of an in depth formal
arrangements and announcement of
the arrangements
Interim Financial AS 25 - Interim Financial Reporting IAS 34 - Interim Financial Reporting Ind AS 34 - Interim
Reporting - Financial Reporting
primary literature

Minimum No disclosure is required Minimum components of interim Same as IFRS

components financial report includes- statement
showing changes in equity
Change in Requires statement of figures of Figures of prior interim periods of the Same as IFRS
accounting policy prior interim periods of the current current financial year and comparable
financial year only figures of corresponding previous
period to be restated.
Treatment for AS 25 does not address such issues Separate guidance is available for Same as IFRS
provision specifically treatment of provision for leave
encashment, interim period
manufacturing cost variances, foreign
currency translation gains & losses.
Intangible assets – AS 26 - Intangible Assets IAS 38 - Intangible Assets Ind AS 38 - Intangible
primary literature Assets

measurement Measured only at cost. Intangible assets may be measured at Same as IFRS
either price or revalued amounts.

useful life The useful life Useful life may be finite or indefinite Same as IFRS
may not be
indefinite.
goodwill Goodwill arising on amalgamation Not amortised but subject to annual Same as IFRS
in the nature of purchase is impairment test or more frequently
amortized over five years (as per AS whenever there is an impairment
14). Goodwill arising on indication
consolidation is not amortised but is
tested for impairment.
Interests in Joint AS 27 - Financial Reporting of IAS 31 - Interests in Joint Ventures Ind AS 31 - Append ix A
Ventures - primary Interests in Joint Ventures IFRS 11 – Joint Arrangements Jointly Controlled Entities
literature -Non-Monetary
Contributions by
Venturers

Ind AS 111 – Joint

Arrangements

joint control Joint control is the contractually in Joint control is the mutually agreed Same as IFRS
agreementsharing of control over an sharing of control of an economic
economic activity. activity, and exists only if there is
strategic financial and operating
decisions relating to the activity
needed.
scope Currently, there is no exemption as IAS 31 is not applicable for Ind AS 31 is not
in IFRS. investments made by venture capital applicable for investments
The limited revision to AS 27, on organizations, mutual funds, unit trusts made by venture capital
becoming effective, eliminates this and similar entities including organizations that upon
difference between AS 27 and IAS investment-linked insurance funds that initial recognition are
31 classified as at FVTPL
upon initial recognition are classified
under Ind AS 39.
as at FVTPL under IAS 39.

separate financial At cost less impairment loss. Either at cost or at fair value as held for Same as IFRS
statement of The sale investment with changes in fair
venturer value recognized as a component of
comprehensive income.
consolidated At cost less impairment if Even if there is no consolidated presentation of
financial consolidated financial statements are financial statements (e.g. because the consolidated or separate
statements not prepared. venturer has no subsidiaries) financial statements is
proportionate consolidation/equity regulated by governing
accounting is used for jointly statutes in India.
controlled entities.

Impairment of AS 28 impairment of assets IAS 36 impairment of assets Ind AS 36 impairment of

Assets - primary assets

literature

goodwill Allocated AS 28 requires goodwill to be tested Allocated to the lowest level at which Same as IFRS
to cash generating for impairment using the goodwill is internally monitored by
units “bottom-up/top-down” approach management which should not be
that are under which the goodwill is, in larger than an operating segment
expected to effect, tested for impairment by before aggregation of segments as
benefit from the allocating its carrying amount to defined in IFRS 8.
synergies of
each cash-generating unit or
business
smallest group of cash-generating
combination
units to which a portion of that
carrying amount can be allocated
on a reasonable and consistent
basis.
reversal of Impairment loss for goodwill is Impairment loss recognised for Same as IFRS
impairment loss reversed if the impairment loss was goodwill is prohibited from
for goodwill caused by a specific external event reversal in a subsequent period.
of an exceptional nature that is not Goodwill impaired in an interim
expected tooccuring again and period is not subsequently reversed
subsequent in subsequent interim or annual
external events that occurred and
financial statements.
reversed the effect of that event.
Provisions, AS 29 – Provisions, Contingent IAS 37 – Provisions, Contingent Ind AS 37 – Provisions,
Contingent Assets Liabilities and Contingent Assets Liabilities and Contingent Assets Contingent Liabilities and
and Contingent Contingent Assets
Liabilities –
primary
literature
recognition of Provisions are not recognised based A provision is recognised only if a past Same as IFRS
provisions on constructive obligations. event has created alegal or constructive
obligation.
Financial AS 30 – Financial Instruments: IFRS 9 (2014) – Financial Instruments Ind AS 109 – Financial
Instruments – Recognition and Measurement. Instruments
primary literature
general recognition There is no definition of financial An entity ought to recognise a Same asIFRS
principle instrument. financial asset or liability
in its statement of
financial position when, the entity
becomes party for the contractual
provisions of the instrument.
.
initial No specific guidance. All financial instruments are Same as IFRS
measurement Compared at fair value in
the case of a financial
asset or financial liability not at fair
value through profit or loss. Trade
Receivables that do not have a
significant financing component
should initially be measured at
transaction price as defined in
IFRS 15.
Financial AS 31 - Financial Instruments: IAS 32 - Financial Instruments : Ind AS 32 - Financial
Instruments: Presentation Presentation Instruments : Presentation
Presentation -
primary literature

classification of Financial instruments are classified Financial instruments are classified as Same as IFRS
financial liabilities based on legal form – redeemable a liability or equity according to the
preference shares will be classified contractual arrangement, (and not its
as equity. Preference dividends are legal form), and the definition of
always recognized similar to equity financial liabilities and equity
dividend and are never treated as instruments. Dividends on financial
interest expense. instruments classified as financial
liability is recognized as an interest
expense in the statement of
comprehensive income/income
statement (if presented separately).

treasury shares Acquiring own shares is permitted If an entity acquired its own shares Same as IFRS
only in limited circumstances. again (treasury shares), these are

Shares repurchased ought to be shown as a deduction from equity

cancelled instantly and cannot be
controlled as treasury shares.

Financial IFRS 7 – Financial Instruments: Ind AS 107 – Financial

Instruments: AS 32 – Financial Instruments: Instruments: Disclosures
Disclosures – Disclosures
primary literature
some improved Currently there are no Requires disclosure of information Same as IFRS
disclosures detailed disclosure about the significance of financial
requirements for financial instruments on financial information
instruments. and performance.

Reporting in There is no equivalent standard. IAS 29 – Financial Reporting in Ind AS 29 – Financial

Hyperinflationary Hyperinflationary Economies Reporting
Economies – in
primary Hyperinflationar
literature y Economies
hyperinflationary There is no equivalent standard Generally an economy is Same as IFRS
Hyperinflationary when the cumulative
inflation rate over 3
years is approaching
or exceeds 100%.
basic principle There is no equivalent standard Financial statements should be Same as IFRS
stated in terms of the measuring unit
current at the end of the reporting
period.

Applying the There is no equivalent standard. When the economy of an entity‟s Same as IFRS
Restatement functional currency becomes
approach under hyperinflationary.
IAS .
29
Agriculture – There is no equivalent standard IAS 41 – Agriculture Ind AS 41 – Agriculture
primary literature
scope There is no equivalent standard Applies to biological assets with the Same as IFRS
exception of bearer plants that are used
in the production or supply of
agricultural produce and which will not
be sold as agriculture produce and
government grants related to these
biological assets.
measurement There is no equivalent standard All biological assets are measured at Same as IFRS
fair value less costs to sell, unless fair
value cannot be reliably measured.

First Time There is no equivalent standard under IFRS 1 – First Time Adoption Ind AS 101 – First Time
Adoption Indian GAAP. of International Financial Adoption
– Primary Reporting Standards of Indian Accounting
Literature Standards
date of transition Not applicable. The date of transition is the Similar to IFRS.
beginning of the earliest period for
which an entity presents full
comparative information under IFRS

Share-based There is no equivalent standard. IFRS 2 – Share-based Payment Ind AS 102 – Share-based
Payment – primary However, the ICAI has issued a (covers share-based payments both Payment
literature Guidance Note on Accounting for for employees and non-employees (covers share-based
Employee Share-based Payments. and transactions involving receipt of payments both for
. goods and services) employees and
nonemployees
and transactions involving
receipt of goods
and services)
recognition Similar to IFRS. Recognise as an expense over the Same as IFRS
vesting period.

Insurance No equivalent standard. IFRS 4 – Insurance Contracts. Ind AS 104 – Insurance

Contracts Contracts
–
primary literature
general No equivalent standard. Applicable to insurance and reinsurance Same as IFRS
contracts and to

Discretionary participation features

in insurance contracts.

Exploration for No equivalent standard. IFRS 6 – Exploration for and Ind AS 106 – Exploration
and However there is a Guidance Evaluation of Mineral Resources for and
Evaluation of Note on Accounting for Oil and Evaluation of Mineral
Mineral Resources Gas Producing Activities (Revised Resources
– 2013).
primary literature
general, As per the guidance note, there are Exploration and evaluation assets are Same as IFRS
impairment and two methods of measured at cost or revaluation less
disclosures Accounting for acquisition, accumulated amortization and
exploration and impairment loss
development costs,
i.e. the Successful Efforts Method
and the Full Cost Method.

Fair value – No equivalent standard IFRS 13 – Fair value Measurements Ind AS 113 – Fair value
primary Measurements
literature
Scope No equivalent standard. Applies when another IFRS requires Same as IFRS
or permits fair value measurements
or disclosures about fair value
measurements (and measurements
such as fair value less cost to sell).

definition No equivalent standard. Fair value is the price that to be received Same as IFRS
Fair value is defined in the context for selling an asset and paid
accounting standard,if needed. for the transfer a liability in an
orderly transaction between
market participants at the
measurement date.
classification and No equivalent standard. Requires with some exceptions, Same as IFRS
disclosure classification of these measurements
into a „fair value
hierarchy‟ based on the nature
ofinputs:
.
Regulatory Guidance Note on Accounting for IFRS 14 – Regulatory Deferral Ind AS – 114 Regulatory
Deferral Rate Regulated Activities accounts Deferral
Accounts- (revised)* (effective for Accounts
Primary literature accounting periods beginning on
or after 1 April 2015)
scope, recognition The Guidance Note should be applied IFRS 14 – Regulatory Deferral Similar to IFRS.
and presentation by an entity to its operating activities Accounts is limited
. scope Standard to provide an interim,
solution for rate-regulated entities
which are firsttime adopters of IFRS.

Revenue from No comprehensive equivalent IFRS 15- Revenue from Ind AS 115 – Revenue from
Contract with standard. The following deal Contracts with Customers (effective Contracts with Customers
customers – with revenue recognition: AS from Annual period beginning on or Ind AS 115 – Appendix C
primary 9 – Revenue Recognition after 1 January 2017 with earlier –
literature AS 7 – Construction Contracts application permitted) Service Concession
Arrangements
Ind AS 115 – Appendix D
–
Service Concession
Arrangements: Disclosures
Scope AS 7 deals with construction IFRS 15 applies to contract with a Same as IFRS
contracts and AS 9 deals with the customer and establishes principles
recognition of revenue arising in on reporting the nature, amount,
the course of ordinary activities of timing and uncertainty of revenue and
the entity – sale of goods, rendering cash flows arising from a
of services and use by others of contract with customer
entity resources yielding interest,
royalties and dividend.

recognition AS 9 requires recognition of revenue The core principle under IFRS 15 is Same as IFRS
when (i) there is transfer significant that an entity should recognise
risks and rewards of ownership (ii) revenue to depict the transfer of
no significant promised goods or services to
 uncertainty exists regarding the amount customers in an amount that reflects
of consideration and (iii) at the time of the considerations to which the entity
performance, expects to be entitled in exchange for
those goods or services.
To achieve that core principles, the
following steps are applied: 1) Identify
the contract(s) with a customer.
2) Identify the performance
obligations in the contract (account
for a „distinct‟ good or service). 3)
Determine the transaction price.
4) Allocate the transaction price
.
5) Recognisition of revenue

time value of Revenue is not adjusted for the time Transaction price is price adjusted for Same as IFRS
money value. the time value of money during the
existence of financing component

disclosure AS 7 requires disclosure of contract Cohesive set of disclosure requirements Same as IFRS
revenue recognised, methods used to including both qualitative and
recognise revenue, methods used to quantitative
determine stage of completion, information about the nature, amount,
aggregate amount of timing and uncertainty of
cost incurred and recognised profits, revenue and cash flows from contracts
amount of advances received and with customers. Specifically,
amount of retentions. AS 9 requires information about:
disclosure of circumstances when • Revenue recognised from
revenue recognition has been contracts with customers, including
postponed pending resolution of the disaggregation of revenue into
significant uncertainties. appropriate categories
As per Schedule III, in the case of a • Contract balances,
company other than a finance including the opening and closing
company, revenue from operations balances of receivables, contract
should disclose separately in the assets and contract liabilities;
notes to accounts the following:
• Performance obligations,
• sale of products including when the entity typically
• sale of services satisfies its performance obligations
• other operating revenues and the transaction price that is
Less: Excise Duty allocated to the remaining
Turnover (Net) In the case of a finance performance obligations in a contract;
company, revenue from operations • Significant judgements,
should include revenue from: and changes in judgements, made in
• interest; and applying the requirements to those
• other financial services contracts; and
• Assets recognised from the
costs to obtain or fulfil a contract with
a customer.
Service No specific guidance. The ICAI has Prescribes accounting by private sector Same as IFRS
Concession issued an exposure draft of Guidance operators involved in provision of
Arrangements – Note on Accounting for Service public sector infrastructure assets and
Scope Concession Arrangements, which is services. Under service concession
similar to IFRIC 12. arrangements, the grantor specifies the
services to be provided to the public,
controls the infrastructure and the price
to be charged to the public by the
operator.
 REVIEW

OF

LITERATURE
 REVIEW OF LITERATURE
This project review about how India has set a roadmap for convergence with International Financial

Reporting Standards (IFRS) commencing from 1 April, 2011. The convergence with IFRS standards

is set to change the landscape for financial reporting in India. IFRS represents the most commonly

accepted global accounting framework as it has been adopted by more than 100 countries. With the

growth of Indian Economy and increasing integration with the global economies, Indian corporate is

raising capital globally. Under the circumstances, it would be imperative for Indian corporate to adopt

IFRS for their financial reporting. While the Core Group of Ministry of Corporate Affairs (MCA) has

recommended convergence to IFRS in a phased manner from 1st April, 2011 Indian corporate having

global aspirations should consider earlier voluntary adoption. While there are several similarities

between Indian GAAP and IFRS, still there are differences which can have significant impact on the

financial statements. This project is aim to bring out such aspects and a comparative analysis on Indian

Accounting standard vis-à-vis IFRS.

Gray’s Comparability Index is applied for measuring the relative impact of IFRS adoption on

financial ratios of select companies. The study revealed significant differences between Indian

GAAP–based and IFRS–based financial ratios and the IFRS adoption has led to statistically

significant increase in liquidity, profitability and valuation ratios.

OBJECTIVES
 OBJECTIVES OF THE STUDY

 To study of International Financial Reporting Standard & Indian Accounting

Standard.

 To understand the procedure for issue of International Financial Reporting

Standard & Indian Accounting Standard.

 The study attempts to examine the impact of the convergence of IFRSs on

the financial reporting of some select Indian companies.

 To Study the impact of adoption of IFRS and challenges that will come up

during the adoption procedure in India

 RESEARCH
METHODOLGY
TYPE OF RESEARCH
The study in nature is: -

 Exploratory and

 Empirical

Exploratory: -
For the exploratory part relevant data and information have been collected from published

Literature like books, journals, articles, reports; regulatory rules formulated by authoritative

Bodies; news and feature articles published in financial dailies, finance based magazines and

Periodicals.

Empirical: -

For empirical analysis, all the IT industry companies viz., HCL Technologies Ltd. (HCL),

Infosys Ltd. (Infosys), Tata Consultancy Services Ltd. (TCS), Tech Mahindra Ltd. (Tech

Mahindra), Wipro Ltd (Wipro), forming the NSE-NIFTY 50 index, have been selected as

Sample of the study. For analyzing, Gray’s Comparability Index (GCI) has been used.

METHOD OF STUDY

The method of study used here is basically a comparative analysis on the financial reporting

practices under the IGAAP and voluntarily published financial report under IFRS on the

company.

Necessary Secondary data for this purpose have been collected from the published annual
Reports of the Sample companies. The study has been made on the financial position as on

31st March, 2016.

SAMPLE DESIGN

The sampling technique used here was non-probability sampling in which convenience

sampling was used.

DATA COLLECTION

The method for data collection used here comprised of secondary sources in the form of:

 Annual financial statements

 Articles

 Reports

 Regulated Rules formulated by Authoritative bodies

 Feature articles published in financial dailies

DATA ANALYSIS

The data has been analyzed using various kind of tools Gray’s Comparability Index, calculation

of various ratios and GAAP principles to arrive at the conclusion.

DATA ANALYSIS

AND

INTERPRETATON
 DATA ANALYSIS AND INTERPREATATION
Here, the quantitative changes have been examined in financial reporting due to the changes

in accounting standard. 5 listed Indian companies (companies) have been selected from the IT

industry belonging to Nifty 50 Index to conduct this study. Before the period, financial year

starting from 1stApril, 2016, companies prepared their financial report in compliance with the

Indian GAAP (IGAAP). The financial year starting from 1stApril, 2016 and onwards all the

Indian companies either listed or unlisted having net worth of rupees five hundred crore or

more need to prepare their financial report under the Indian Accounting Standards (Ind AS).

So, the financial reports for the financial year ending on 31st March, 2016 are available under

both IGAAP and Ind AS (since the financial year ending on 31st March, 2017 requires the

previous year’s figures for comparison purpose, the figures as on 31st March, 2016 need to

be restated under Ind AS). The consolidated financial statements as per IGAAP are compared

with the consolidated financial statements under Ind AS. The figures in the Balance Sheet and

the Profit and Loss statements have been completely drawn from the annual reports of the

company. All figures are related to the period ending 31st march 2016.

A comparative study of Balance Sheets prepared under Indian GAAP and IFRS on select IT

Companies. Findings of the study revealed that there are quantitative differences in the Balance

sheet items (viz. total assets, total liabilities and total equity) of Infosys Limited and Wipro

Limited prepared under Indian GAAP and IFRS.

Ananlysis has been made the impact of IFRS adoption through key financial ratios on the

stability, liquidity, profitability and valuation of the select 10Indian companies which have
adopted IFRS voluntarily. Gray’s Comparability Index is applied for measuring the relative

impact of IFRS adoption on financial ratios of select companies. The study revealed significant

differences between Indian GAAP–based and IFRS–based financial ratios and the IFRS adoption

has led to statistically significant increase in liquidity, profitability and valuation ratios.

An investigated impact of IFRS adoption on financial activities of Indian companies with a

sample of ten companies. The study has revealed that there is no significant improvement in

financial risk, investment activities, operating activities and debt covenant. In other words, there

is no significant change in financial activities due to adoption of IFRS.

The consolidated financial statements as per GAAP are compared with the consolidated financial

statements under IFRS. It is found that the variation in total assets and liabilities is because of the

Reclassification among equity and liability and also because of the difference in the concept of

revenue recognition. It is emphasized that IFRS is a fair value principle based accounting which

will improve quality of disclosure and enhance international comparability and understanding of

financial statements.

Gray’s Comparability Index (GCI) is applied to the key elements of financial statements such

as assets, liabilities, equities and profit prepared under IGAAP and Ind AS. This is an Index

which was proposed by Gray in 1980 to quantify the impact of different accounting practices

by means of Conservatism Index.

The following formulae are used.

The Index is calculated as under:

Total Comparability Index of Non-Current Assets (NCA) = 1

Total Comparability Index of Current Assets (CA) = 1

Total Comparability Index of Total Assets = 1

Total Comparability Index of Total Equity = 1

Total Comparability Index of Total Non-Current Liabilities (NCL) =

Total Comparability Index of Total Current Liabilities (CL) = 1

Total Comparability Index of Total Equity and Liabilities =

Total Comparability Index of Total Income = 1

Total Comparability Index of Total Expenses = 1

Total Comparability Index of Profit before tax (PBT) = 1

The benchmark used in the study is Ind AS for examining the accounting impact on the

Elements of the statements of financial positions of the transition from the Indian GAAP to

Ind AS. The Total Non-Current assets, total current assets, total assets, total equities, Total

Non-Current Liabilities, Total Current Liabilities, Total Equity and Liabilities, Total Income,

Total Expenses, Profit before tax reported under Ind AS are taken as denominators in order

To assess the impact ofInd AS on Indian financial statements. The neutral value of the index

is one, implies that there is no quantitative change/impact (increase or decrease) situation on

the Indian GAAP by Ind AS. An index that is greater than one implies that the assets,

liabilities, equity, income, expenses and profit are higher under IGAAP than what were

reported under Ind AS. Conversely, an index that is less than one suggests that the assets,

liabilities, equity, income, expenses and profit are lower under IGAAP than that what were ..

reported under Ind AS. But, this index does not show whether the difference obtained is

statistically significant or not.

Company wise tabular data after calculation of various attributes and its graphical
Representation through form of charts and graphs to depict the picture.

Infosys’s major financial elements in financial report

Total NCA 0.991

Total CA 1
Total Assets 0.9972
Equity 0.9365
Total NCL 0.3433
Total CL 1.2984
Total Equity and Liabilities 0.9972

Total Income 1.0001

Total Expenses 0.995
Profit before tax 1.0128

Infosys's Financial Attributes

1.4

1.2

0.8

0.6

0.4

0.2

0
Total NCA Total CA Total Equity Total NCL Total CL Total Total Total Profit
Assets Equity Income Expenses before tax
and
Liabilities
HCL’s major financial elements in financial report

Total NCA 1.0087

Total CA 0.9951
Total Assets 1.0001
Equity 1.0002
Total NCL 0.826
Total CL 1.0337
Total Equity and Liabilities 1.0001

Total Income 0.9898

Total Expenses 0.9896
Profit before tax 0.9978

HCL FINANCIAL ATTRIBUTES

1.0087 1.0001 1.0002 1.0337 1.0001

0.9951 0.9898 0.9896 0.9978

0.826
TCS’s major financial elements in financial report

Total NCA 1.0168

Total CA 0.9977
Total Assets 1.0032
Equity 0.9221
Total NCL 0.7362
Total CL 1.4115
Total Equity and Liabilities 1.0032

Total Income 0.9997

Total Expenses 1.0017
Profit before tax 0.9948

TCS financial attributes

1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
Tech Mahindra’s major financial elements in financial report

Total NCA 1.1357

Total CA 0.9973
Total Assets 1.0436
Equity 0.9855
Total NCL 0.8582
Total CL 1.2343
Total Equity and Liabilities 1.0436

Total Income 1.0044

Total Expenses 0.998
Profit before tax 1.0415

Tech Mahindra financial attributes

Total NCA
1.4
Profit before tax 1.2 Total CA
1
0.8
0.6
Total Expenses 0.4 Total Assets

0.2
0

Total Income Equity

Total Equity and

Total NCL
Liabilities

Total CL
-
Wipro’s major financial elements in financial report

Total NCA 0.9592

Total CA 0.9922
Total Assets 0.9823
Equity 0.9686
Total NCL 0.6794
Total CL 1.064
Total Equity and Liabilities 0.9823

1.0019
Total Income
Total Expenses 1.0016

Profit before tax 1.0027

Wipro Financial Attributes

1.0027
1.0016
1.0019
0.9823
1.064
1
0.6794
0.9686
0.9823
0.9922
0.9592

0 0.2 0.4 0.6 0.8 1 1.2

Profit before tax Total Expenses Total Income

Total Equity and Liabilities Total CL Total NCL
Equity Total Assets Total CA
Total NCA
Table 1: Company wise Gray’s Comparability Index
(GCI) on major financial elements in financial report

Total Total Total Equity Total Total Total Total Total Profit
NCA CA Assets NCL CL Equity Income Expenses before
and tax
Liabilities

Infosys 0.991 1.0000 0.9972 0.9365 0.3433 1.2984 0.9972 1.0001 0.9950 1.0128
1

HCL 1.008 0.9951 1.0001 1.0002 0.8260 1.0337 1.0001 0.9898 0.9896 0.9978
7

TCS 1.016 0.9977 1.0032 0.9221 0.7362 1.4115 1.0032 0.9997 1.0017 0.9948
8

Tech 1.135 0.9973 1.0436 0.9855 0.8582 1.2343 1.0436 1.0044 0.9980 1.0415
Mahind 7
ra

Wipro 0.959 0.9922 0.9823 0.9686 0.6794 1.0640 0.9823 1.0019 1.0016 1.0027
2

Comparing the GCI of the Balance Sheet items it has been found there is no significant

quantitative change in total current assets and equity since the GCI score for all the companies

are close to 1. It has been also found that except the GCI of total non-current assets of Tech

Mahindra all the other company’s GCI of total non-current assets is near to zero indicate no

significant change under IGAAP and Ind AS. It is due to the interest amount in Trust under the

head “investment”, which Has been depicted under IGAAP reporting but not disclosed under
Ind AS, the non-current Assets amount of Tech Mahindra Company has been decreased under

Ind AS from IGAAP.

Graphical representation of GCI

Another reason for difference is fair value based valuation of the “Property, Plant and

Equipment” under Ind AS. At the time of examining the difference under the head non-current

Liabilities it has been identified that a few reasons e.g. accounting for deferred taxes under

IGAAP is fundamentally very different compare to Ind AS, discounting on provision is not

Permitted in IND AS, contingent asset is not disclosed in the financial statement in Ind AS,

reclassification of items, etc.

 Graphical Representation of GCI

It has been witnessed from the study that there is no such significant quantitative change in

Profit and Loss Statements’ items like total income, total expenses, and profit before tax

Under both IGAAP and Ind AS since the GCI for all the items for all the companies are very

Close to zero.
LIMITATIONS
 Limitations

 The major limitation encountered was collection of data from annual financial records of

Various companies, as it’s one of the confidential statements and are not easily accessible.

 Findings of the study poses a limitations that there are quantitative differences in the

Balance sheet items (viz. total assets, total liabilities and total equity) of Infosys Limited

And Wipro Limited prepared under Indian GAAP and IFRS.

 Another roadblock was the changes and adoption of different methods of accounting

Principle, for example one company uses SLM method of depreciation and other uses

Reducing balance method. This causes lack of uniformity of results and distortions.

 Too much usage of financial elements and attributes poses confusion while calculating

Gray’s comparability index. Therefore, use of individual indicators for more robust

Analytical approach is required.

 Investment activity pattern and debt covenant of each company differ from each other w

Which results into Change of various ratios.

 FINDING

AND

RECOMMENDATIONS
 FINDINGS AND RECOMMENDATIONS

 There is no such significant quantitative change in Profit and Loss Statements’ items like

total income, total expenses, and profit before tax due to changes in accounting reporting

practices from IGAAP based reporting to converged with IFRS i.e. Ind AS based

reporting.

 It is found from the study that there is no significant quantitative change in total current

assets, total non-current assets and equity from IGAAP based reporting to Ind AS based

reporting except a few situations due to some reclassification provisions.

 Accounting treatment for taxes, discounting on provision, contingent asset may be the

reason for the difference under the head non-current liabilities from IGAAP reporting to

Ind AS.

 It is found that the variation in total assets and liabilities is because of the reclassification

among equity and liability and also because of the difference in the concept of revenue

recognition

 While doing a Comparative analysis on the financial reporting practices under IGAAP

and Ind AS i.e. standards converged with IFRS. So, there a clear research gap has been

identified, which need to noted down.

CONCLUSION
 CONCLUSION

The overhaul of Indian GAAP into Ind AS promises to bring about positive changes for the Indian

business environment. The current roadmap relating to the convergence to Ind AS will start taking

practical shape next year, where unlisted and listed companies having a net worth of 500 crores or

more will have to undergo mandatory Ind AS adoption on 1 April, 2016. This assumption has been

taken given that there will be no further delay regarding Ind AS adoption henceforth. the differences

between India’s accounting standards and IFRS are sure to be at an all-time low once Ind AS is

introduced into the Indian business environment, with the roadmap indicating that it should be in the

coming year for certain companies who have been recognized in the mentioned criteria. Ind AS is a

good way for Indian entities to smooth out their earnings from Indian GAAP to something similar to

IFRS. For Ind AS to be successfully instilled in the business environment, hard work as

well as training starting from the grassroots level needs to be done by entities prescribed to be adhering

to these standards soon. First and foremost, there should no further delays regarding introducing Ind

AS to the environment. Once Ind AS has been successfully implemented in India, there could be

discussion on how to mitigate the potentially irreconcilable differences between Ind AS and IFRS. It

is well within the realm of possibility that one day; India has the capacity and the resources to

completely adopt IFRS in its business environment.

International financial Reporting Standard focuses on quality, reliability & relevancy aspects of

the information to all its users all over the globe while setting a new standard. Harmonization of

Accounting Standard is a need to create & develop global economy. Harmonisation wills result
into true & fair presentation of financial statement that can be easily accessible to all the potential

users including potential investors. IFRS provided detailed guideline for presentation of financial

statement & it gives more insights about the financial information of the entity so that investor

can compare it with other entity to find out best investment option. For MNC s adoption of IFRS

will result into reduction in the cost of preparation of financial statement & also overcome the

difficulty of consolidation of financial statements working in different country.

Newly framed Indian AS are the converged form of IFRS and ICAI and MCA has accepted most

of the provisions of IFRS as it is. The table of difference shows that except few items almost all

the provisions are same as IFRS. So it is a good thing about Indian AS that we have not any major

changes in India GAAP. There are significant differences between IFRS and Indian-GAAP. In

fact, Indian Accounting Standards have not kept pace with changes in IFRS. This is because

Indian Standards remain sensitive to local conditions, including the legal and economic

environment.
BIBLIOGRAPHY
 BIBLIOGRAPHY

Achalapathi, K.V. & Bhanusireesha, P. (2015). Impact of IFRS Adoption on Financial

Statements of Select Indian Companies, Osmania Journal of International Business Studies, 10
(1).

Bhargava, V. & Shikha, D. (2013). The Impact of International Financial Reporting Standards
on Financial Statements and Ratios, The International Journal of Management, 2(2).

Ghosh, T. P. (2016). Illustrated Guide to Indian Accounting Standards, Taxmann Publication,

New Delhi.

Jain, P. (2011). IFRS Implementation in India: Opportunities and Challenges, World Journal of
Social Sciences,1(1), 125.

Kamath, R. & Desai, R. (2014). The Impact of IFRS Adoptionon the Financial Activities of
Companies in India: An Empirical Study, IUP Journal of Accounting Research &Audit
Practices, 13(3), 25-36.

Kantayya, R. & Panduranga, V. (2017). A Comparative Study of Balance Sheets Prepared

under Indian GAAP and IFRS with Special Reference to Select IT Companies, Management
Today, An International Journal of Management Studies, 7(2), 75-85.

Nandakumar, A. J., Mehta, K., Ghosh, T.P. & Alkafaji, Y. A. (2010). Understanding
Fundamentals IFRS International Financial Reporting Standards, John Wiley & Sons, Inc.,
Hoboken, New Jersey.

Pacter, P. (2017). Guide to IFRS Standards - The Global Financial Reporting Language, IFRS
Foundation, United Kingdom.

Shobana, S. & Sindhu, D. (2011). Financial Statement Effects on Convergence to IFRS – A

Case Study in India, International Journal of Multidisciplinary Research, 1(7), 317-337.

Shukla & Suchita (2015). An Empirical Study of the Impact of Adoption of IFRS on the
Financial Activities of Companies in India, International Conference on Multidisciplinary
Research & Practice, 3(1), 323..

Companies (Indian Accounting Standards) Rules, 2015.

ICAI. Concept Paper on Convergence with IFRS in India.

PWC. Concept paper on IFRS, US GAAP, IND AS, and Indian GAAP: Similarities and
Differences.

Other References
URLs
www.ifrs.org

www.mca.gov.in

www.infosys.com

www.wipro.com

www.hcltech.com

www.tcs.com

www.techmahindra.com

www.icai.org
Books Referred
 Assma Sawani(2009), The Changing Accounting Environment: International

 Accounting Standards and US implementation, Journal of Finance and

Accountancy,pp.1-8.

 Sarbapriya Ray(2011), “Emergence of International Financial Reporting Standard in

India‟s

Accounting Scenario”, Research Journal of Finance and Accounting, Vol 2, No 12, 2011.

 KATEŘINA STRUHAŘOVÁ, et al (2012), Challenges and opportunities represented

By shift to IFRS in the Czech Republic, Proceedings of the 5th WSEAS International

Conference on Economy and Management Transformation, volume 1.

 Banji Fajonyomi and James S. Kehinde(2013), International Financial Reporting

Standard:

Principle, Practice and Prospect, International Journal of Humanities and Social Science Vol. 3
ANNEXURES
 Annexure -1
Figures ( in crore) compiled from the Annual Reports

Infosys HCL TCS Tech Mahindra Wipro

31st 31st March, 31st March, 31st March, 31st March,

March, 2016 2016 2016 2016
2016
IG In GC IGA Ind GC IGA Ind GC IGA Ind GC IGA Ind GC
AA d I AP AS I AP AS I AP AS I AP AS I
P AS
Total NCA 23 23 0. 144 143 1. 263 258 1. 856 753 1. 208 217 0.
38 59 99 83.5 58.9 00 16.9 83 01 1.9 8.6 13 50.8 36.7 95
8 7 11 1 87 9 68 57 92
Total CA 51 51 1. 248 249 0. 630 632 0. 149 149 0. 498 502 0.
75 75 00 60.1 81.7 99 67.3 13 99 45.1 86.1 99 92.2 82.5 99
3 3 00 6 51 9 77 73 22
Total Assets 75 75 0. 39,3 39,3 1. 89,3 89,0 1. 23,5 22,5 1. 70,7 72,0 0.
14 35 99 43.6 40.6 00 84.3 96.0 00 07.0 24.7 04 43.0 19.2 98
1 0 72 7 0 01 8 0 32 0 0 36 0 0 23
Equity 57 61 0. 27,6 27,6 1. 658 714 0. 145 147 0. 44,9 46,3 0.
82 74 93 05.8 01.4 00 62.7 27 92 69.7 83.6 98 11 66 96
6 4 65 0 3 02 9 21 55 86
Liability

Total NCL 12 36 0. 157 191 0. 154 210 0. 750. 875 0. 258 380 0.
6 7 34 8.19 0.72 82 6.08 0 73 9 85 3.2 2.1 67
33 60 62 82 94
Total CL 17 13 1. 101 982 1. 219 155 1. 695 563 1. 232 218 1.
18 23 29 59.6 8.45 03 75.5 69 41 6 5.7 23 48.8 51.1 06
9 9 84 8 37 1 15 43 40
Total Equity 75 75 0. 39,3 39,3 1. 893 890 1. 235 225 1. 707 720 0.
and Liabilities 14 35 99 43.6 40.6 00 84.3 96 00 07 24.7 04 43 19.2 98
1 0 72 7 0 01 8 32 36 23
Total Income 65 65 1. 31,6 32,0 0. 111 111 0. 270 269 1. 540 539 1.
56 56 00 76.2 02.0 98 700. 730 99 50.8 33.6 00 96.5 96.2 00
9 4 01 4 7 98 08 97 44 19
Total Expenses 46 46 0. 24,7 24,9 0. 800 798 1. 23,0 23,0 0. 425 425 1.
58 82 99 07.1 66.1 98 24.2 90 00 33.9 79.5 99 71.8 02.5 00
7 1 50 0 5 96 1 17 0 0 80 16
Profit before 18 18 1. 7,02 7,04 0. 316 318 0. 4,01 3,85 1. 115 114 1.
tax 97 74 01 5.34 0.68 99 75.8 40 99 6.90 6.70 04 24.7 93.7 00
9 0 28 78 7 48 15 27
Profit for the 13 13 1. 5,66 5,60 1. 242 243 0. 311 302 1. 8,95 8,95 1.
period 67 48 01 1.45 1.68 01 91.9 38 99 8 6.6 03 9.7 7.1 00
8 9 40 07 4 81 02 03
Total other 127. 269 236. 270.
comprehensive 76 8 8
income
Total 13 5,72 246 326 9,22
comprehensive 78 9.44 07 3.4 7.9
income 0