Adoption of IFRS

IFRS are used in many parts of the world, including the European Union, Hong Kong, Australia, Malaysia, Pakistan, GCC countries, Russia, South Africa, Singapore and Turkey. As of 27 August 2008, more than 113 countries around the world, including all of Europe, currently require or permit IFRS reporting. Approximately 85 of those countries require IFRS reporting for all domestic, listed companies. In addition, the US is also gearing towards IFRS. The Big Four accounting firms are slowly but progressively shifting from GAAP to IFRS and will fully convert to IFRS standards in the longterm

 IFRS in India

 The Institute of Chartered Accountants of India (ICAI) has announced that IFRS will be mandatory in India for financial statements for the periods beginning on or after 1 April 2011. This will be done by revising existing accounting standards to make them compatible with IFRS.Reserve Bank of India has stated that financial statements of banks need to be IFRS-compliant for periods beginning on or after 1 April 2011...The ICAI has also stated that IFRS will be applied to companies above Rs.1000 crore from April 2011. Phase wise applicability details for different companies in India:

 Phase 1: Opening balance sheet as at 1 April 2011

 i. Companies which are part of NSE Index – Nifty 50

ii. Companies which are part of BSE Sensex – BSE 30

      a. Companies whose shares or other securities are listed on a stock exchange

           outside India

      b. Companies, whether listed or not, having net worth of more than INR1,000


 Phase 2: Opening balance sheet as at 1 April 2012

 Companies not covered in phase 1 and having net worth exceeding INR 500  crore

Phase 3: Opening balance sheet as at 1 April 2014*

Listed companies not covered in the earlier phases·    If the financial year of a company commences at a date other than 1 April, then it shall prepare its opening balance sheet at the commencement of immediately following financial year.

 On January 22, 2010 the Ministry of Corporate Affairs issued the road map for transition to IFRS. It is clear that India has deferred transition to IFRS bya year. In the first phase, companies included in Nifty 50 or BSE Sensex, and companies whose securities are listed on stock exchanges outside India and all other companies having net worth of Rs 1,000 crore will prepare and present financial statements using Indian Accounting Standards converged with IFRS. According to the press note issued by the government, those companies will convert their first balance sheet as at April 1, 2011, applying accounting standards convergent with IFRS if the accounting year ends on March 31. This implies that the transition date will be April 1, 2011. According to the earlier plan, the transition date was fixed at April 1, 2010.