CONVERGENCE TO IFRS IN INDIA

 CONVERGENCE TO IFRS IN INDIA

• In the scenario of globalisation, India cannot insulate itself from the developments taking place worldwide. In India, so far as the ICAI and the Government authorities such as the National Advisory Committee on Accounting Standards established under the Companies Act, 1956, and various regulators such as Securities and Exchange Board of India and Reserve Bank of India are concerned, the aim has always been to comply with the IFRS to the extent possible with the objective to formulate sound financial reporting standards. 
• The ICAI, being a member of the International Federation of Accountants (IFAC), considered the IFRS and tried to integrate them, to the extent possible, in the light of the laws, customs, practices and business environment prevailing in India. 
• Also, the recent stream of overseas acquisitions by Indian companies makes a compelling case for adoption of high quality standards to convince foreign enterprises about the financial standing as also the disclosure and governance standards of Indian acquires. 
• In India, the Institute of Chartered Accountants of India (ICAI) has worked towards convergence by considering the application of IFRS in Indian corporate environment of Indian Accounting Standards with Global Standards.
•  Recognising the growing need of full convergence of Indian Accounting Standards with IFRS, ICAI constituted a Task Force to examine various issues involved. Full convergence involves adoption of IFRS in the same form as that issued by the IASB. While formulating the Accounting Standards, ICAI recognises the legal and other conditions prevailing in India and makes deviations from the corresponding IFRS. 
• For convergence of Indian Accounting Standards with International Financial Reporting Standards (IFRS), the Accounting Standard Board in consultation with the Ministry of Corporate Affairs (MCA)), has decided that there will be two separate sets of Accounting Standards viz. (i) Indian Accounting Standards converged with the IFRS – standards which are being converged by eliminating the differences of the Indian Accounting Standards vis-à-vis IFRS (known as Ind AS) and (ii) Existing Notified Accounting Standards.