A few months back I attended the Regional Standard Setter’s Conference in New Delhi. During the course of two days, the member nations of South Asian Federation of Accountants (SAFA) got together and discussed topics relating to financial reporting standard setting.
The hot topic was without doubt IFRS. There were presentations by the Chairman of the Accounting Standards Committee from India, Pakistan, Sri Lanka and Nepal, highlighting the progress made, issues being faced and actions that need to be taken.
So, the big question is “Is India prepared”?
India is a huge and diverse country with over 8,000 listed companies. There is a feeling of concern and scepticism within the corporate sector about implementing IFRS. Though the BSE 30 and Nifty 50 companies can boast of resources to make them ready for the d-day, there are parts of the International Standards that India Inc. is not willing to accept which has resulted in carve-outs. In addition, India has had to amend a number of laws and regulations to ensure there is no conflict with the international standards.
The effect of IFRS goes well beyond the accounting and finance function to involve senior management, project experts, operations, IT and technical experts like actuaries and surveyors.
The obvious questions are:
- When will the final decision on the transition date be taken?
- Do we have the required technical expertise as we approach the d-day?
- Have the investors been educated by the board of directors about the impact of IFRS?
I regularly design and deliver training for multinational banks and organisations in India and Sri Lanka on IFRS. Though on one hand it appears a lot needs to be done, there are organisations which have been extremely pro-active and have already to take-off. I was amazed when a large law firm in India approached me to deliver training on IFRS for their capital markets, tax and general corporate teams. A very pro-active approach especially as often transactions which are profitable under the current accounting standards may not be so under IFRS.