IFRS [Compatibility Mode]

7/28/2019 IFRS [Compatibility Mode]

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IFRS

Objectives of this Session

l Why IFRS ?

l What is Accounting Standard ?

l IFRS in India?

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Contents..

l Who are the stakeholders

l Expectation of Stakeholders

l What are all Standards we come across?

l Objectives of IFRS?

l Accounting Standards & the Companies Act

l Why IFRS?

Contents..

l IFRS to whom applicable

l List of IFRS

l What is Ind-AS

l Benefits

l Implementation Status



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l Who are all the Stakeholders

l Shareholders

l Customers

l Employees

l Suppliers

l Local Community

l

Governmentl General Public

l Expectation of Stakeholders

l Return

l Quality

l Security

l Credibility

l Support

l Statutory Compliancel Reliable data / information



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l Sources of Information

l Annual Report of the Company

Balance Sheet

Profit & Loss Account

Cash Flow Statement

Schedule to BS and P&L

Notes to Accounts

Directors Report Auditors Report

Statistics and graphs

l Sources of Information

l Reports to Government Departments

MCA

Income Tax

SEBI

Stock Exchange

RBI

l News Papers / Journal

l Friends / business contacts

l Employees of the Company



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l Concerns of Stakeholders

l Reliabilityof Information

l Accuracy of information

l Authenticity

l Accuracy of Data

l Level of Transparency

l

Window dressingl Sincerety

How the concerns are addressed

l Accounting Standards

l Auditing Standards

l GAAP

l Reporting Standards

l Formats

l Guidelinesl Compliance requirements

l Etc.



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l Objective OF IFRS

l To standardize accounting methods and procedures.

l To lay down principles for preparation and

presentation.

l To establish benchmark for evaluating the quality of

financial statements prepared by the enterprise.

l To ensure the users of financial statements get

creditable financial information.

l To attain international levels in the related areas

What is IFRS ?

l IFRS stands for International Financial Reporting Standards.

l IFRS is A Set of International Accounting Standards stating how particulartypes of transaction and other events should be reported in financialstatement

l IFRS:-A set of Financial Reporting Standards issued by the InternationalAccounting Standards Board (IASB) is recognized under the brand nameIRRSs. IFRSs is a trade mark of the International Accounting StandardsCommittee Foundation. IFRSs compriseof:

l International Financial Reporting Standardsl International AccountingStandards and

l Interpretations originated by the International Financial ReportingInterpretationsCommittee( IFRIC) and

l Interpretations issued by the former Standing Interpretations Committee (SIC).



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Requirements of IFRS

l IFRS financial statements consist of (IAS1.8)

l A Statement of Financial Position

l A Comparative Income Statement

l Either a statement of changes in equity (SOCE) or a statement of recognizedincome or expense ("SORIE")

l A Cash Flow Statement or Statement of Cash Flows

l Notes, including a summary of the significant accounting policies

l Comparative information is provided for the previous reporting period (IAS 1.36).An entity preparing IFRS accounts f or the f irst time must apply IFRS in full f orthe current and comparative period although there are transitional exemptions(IFRS1.7).

Accounting Standards and theCompanies Act, 1956

l As per Section 211 sub sections (3 A), (3 B) and(3 C) inserted by the Companies Amendment

Act, 1999 w.e.f. 31.10.1998:

l (3A) every P & L Account and Balance Sheetshall comply with accounting standards,

l (3 B) deviations, if any, to be disclosed with

reasons and financial effect of deviation,l (3 C) "accounting standards" means standards

of accounting recommended by ICAI or as maybe prescribed by Central Govt. in consultationwith National Advisory Committee on

Accounting Standards.



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Accounting Standards and theCompanies Act, 1956

l Section 217 sub section (2AA) insertedby the Companies Amendment Act,2000 w.e.f. 13.12.2000:

l (2AA) The Board's report shall also include aDirectors' Responsibility Statement indicating

therein (1) that in preparation of annualaccounts, the applicable accounting standardshad been followed along with properexplanation relating to material departure.

Accounting Standards and the CompaniesAct, 1956

l Section 227 sub section (3)(d) inserted bythe Finance Act, 1999 w.e.f. 31.10.1998:

l (3)(d) the auditor's report shall also statewhether, in his opinion, the P & L Account andthe Balance Sheet comply with accountingstandards referred in section 211 (3C),

l (4) where answer to (3)(d) is negative or withqualification, it shall also state the reasonsthereof.



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lWHY IFRS ?

l India is one of the over 100 countries that have or aremoving towards IFRS ( International FinancialReporting Standards) convergence with a view tobringing about a uniformity in reporting systemsglobally, enabling businesses, finances and funds toaccess more opportunities.

l Indian companies are listed on overseas stock

exchanges and have to recast their accounts to becompliant with GAAP requirements of thosecountries. Foreign companies having subsidiaries inIndia are having to recast their accounts to meetIndian & overseas reporting requirements which aredifferent.

lWHY IFRS ?

l Foreign Direct Investors (FDI), overseas financialinstitutional investors (FII) are more comfortable withcompatible accounting standards and companiesaccessing overseas funds feel the need for recast ofaccounts in keeping with globally acceptedstandards.

l ICAI has decided to implement IFRS in India. TheMinistry of Corporate Affairs has also announced itscommitment to convergence to IFRS.



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l IFRS To WHOM APPLICABLE ?

l Compliance with IFRS in India is restricted to PublicEntities which include those companies & entities listedon any stock exchange or have raised money from thepublic, or have a substantial public interest, or publicsector companies. IFRS in India would cover thefollowing public interest entities in the first phase.

l Listed companies

l Banks, insurance companies, mutual funds, and financial

institutionsl Turnover in preceding year > INR 1 billion

l Borrowing in preceding year > INR 250 million

l Holding or subsidiary of the above

l IFRS is not applicable to SMEs as of now

LIST OF IFRS

l IFRS-1 First time Adoption of International Financial Reporting Standards

l IFRS-2 Share-based payments

l IFRS-3 Business Combinations

l IFRS-4 Insurance Contracts

l IFRS-5 Non Current Assets held for sale and Discontinued Operations

l IFRS-6 Exploration for and evaluation of Mineral Resources.

l IFRS-7 Financial Instruments-Disclosures

l IFRS-8 Operating Segments



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Benefits

l Uniformity

l Facilitates Comparison

l Improves Reliability

l Assets at Current Value

l Clarity on Liabilities

l Transparencyl Ensuring Statutory Compliance

Implementation Status

l ICAI has submitted its report to MCA.

l MCA has to approve.

l It is likely to be effective from 1st

April 2014.



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Question Hour

To summarize our discussions

l Basically IFRS helps the stakeholders to get

proper and right information and data,

l Brings Uniformity in reporting

l Contents of IFRS

l Benefits of IFRS



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Review

l Go to Objectives of this Session and check

whether the same have been achieved.

Food for thoughts

l To be HAPPY

Be Honest

Have Ambition

Keep Positive Mindset

Do Prioritize your tasks

Believe inYou

IFRS [Compatibility Mode]

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