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Convergence From I-GAAP to IFRS

India is only converging with IFRS and not implementing it

Phase

Applicable to

Opening Balance Sheet

Phase I

Companies which are 

  • Part of NSE , NSE 50 Index
  • Part of BSE Sensex 30 Index
  • Listed in overseas stock exchanges
  • Listed / Unlisted with a net-worth of more than INR 1000 Crores (100 Million)

1st April 2011

Phase II

Listed / Unlisted companies with a net-worth of more than INR 500 Crores (50 Million) but less than INR 1000 Crores (100 Million)

1st April 2016

Earlier it was 1st April 2013

Unlisted companies with a net worth of less than INR 500 crores and Small & Medium Sized companies are exempt

Revising its earlier roadmap, Institute of Chartered Accountants of India (ICAI) has recommended that companies, having net worth of over INR 500 crores (50 Million), implement new accounting standards (India) that converge with global norms from 1 April 2016.

As per the new roadmap, Indias  is to be implemented for preparing consolidated financial statements of listed and unlisted companies starting from 1 April 2016.This would have the advantage that India would have no implications on tax as well as on computation of managerial remuneration and dividend distribution, among others.

It would be applicable for entities with a net worth of more than INR 500 crores (50 Million) from the accounting year starting on or after 1 April 2016, with previous year comparatives in India for the financial year 2015-16.

The standalone financial statements will continue to be prepared as per the existing notified Accounting Standards which would be upgraded over a period of time.

For such purposes, the existing notified accounting standards would continue to be used as is the practice in almost all countries that have adopted or converged with IFRS.

The revised roadmap, which was finalized by the ICAI council during its meeting from 20 to 22 March, has been submitted to the corporate affairs ministry, which is expected to take decision in the matter shortly.

Convergence with IFRS has strategic implications and will require harmonization of internal and external reporting. Business plans, earnings estimates and management remuneration plans that have reported earnings as the basis will require revisiting as these are expected to undergo change due to the impact of IFRS convergence. The key to successfully managing this change is by preparing for it. It is important that companies plan the transition process and anticipate issues that your business will face on using the IFRS standards.