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Mumbai, Aug. 8 The Ministry of Corporate Affairs (MCA) has formed a core group to converge India’s accounting standards with the International Financial Reporting Standards (IFRS) to enhance comparability and reporting transparency of India Inc’s financial statements. Among others, members of the core group are Mr Anurag Goel, Secretary, Ministry of Company Affairs, Mr C. B. Bhave, Chairman, Securities and Exchange Board of India, Mr J. Hari Narayan, Chairman, Insurance Regulatory and Development Authority, Ms Usha Thorat, Deputy Governor, Reserve Bank of India, Mr Y. H. Malegam, chartered accountant, Mr S. S. Ranjan, Deputy Managing Director, State Bank of India, Mr Uttam Prakash Agarwal, President, Institute of Chartered Accountants of India, Mr T. V. Mohandas Pai, Member of Board, Infosys Technologies, and representatives of various industry bodies.

IFRS is emerging as a universal accounting framework with widespread global acceptance. Indian companies, listed and other public interest entities such as banks, insurance companies, and large organisations, are required to bring out IFRS-compliant statements with effect from April 1, 2011. Hence, they will have to start preparing IFRS compliant accounts at least a year ahead. According to Mr Uttam Prakash Agarwal, two sub-groups will assist the core group, that is, the CFO Group and the Group on Implementation of IFRS.

“By adopting IFRS, Indian companies will get improved access to international capital markets, thereby removing the risk premium that is added to those reporting under the Indian generally accepted accounting principles. Migration to IFRS will lower the cost of raising funds as it will eliminate the need for preparing a dual set of financial statements. It will also enable benchmarking with global peers and improve brand value of Indian companies,” Mr Dolphy D’Souza, Partner, Ernst & Young, said at a seminar organised by the Indian Banks Association.

Mr S. S. Ranjan said the first cut of the IFRS framework to be adopted by Indian companies will be ready in 45 days.

“We are entwined with the global economy. We have no choice but to move to IFRS. However, instead of blindly following it we should incorporate local factors so that the prudent and conservative accounting policies, which have stood us in good stead so far, continue. The Indian Banks Association has set up a small working group to guide banks to migrate to the IFRS framework,” said Mr Albert Tauro, Chairman and Managing Director, Vijaya Bank.

SOURCE: http://www.thehindubusinessline.com/2009/08/09/stories/2009080950980300.htm