India to adopt IFRS despite lack of US support

India to adopt IFRS despite lack of US support

IFRS, despite roadblocks which include the lack of commitment by the US to adopt IFRS, say accounting experts.

There continues to be significant gaps between US GAAP and IFRS, including accounting treatment in such areas as leasing, insurance and losses on financial instruments.

Most recently, the final staff report by the US Securities and Exchange Commission (SEC), published on 13 July 2012, did not include a recommended action plan for the SEC.

Despite this, some accounting experts in India are of the view that India’s interests will be well served if convergence with IFRS is achieved

The CA Institute president, Jaydeep Shah, speaking to The Hindu Business Line , asserts that India’s decision on aligning with IFRS will not be dictated by the US stance on the matter.

‘Our decision will be taken by the corporate affairs ministry. It will be done after taking a holistic view and not be country-based.’

He added that he hoped IFRS convergence will progress further once the new Companies Bill in India is enacted.

For some years now, India has been developing its own accounting standards (Ind-AS) that seeks to converge with the IFRS.

In early 2010, the ministry of corporate affairs issued various press releases on the IFRS roadmap and convergence plan for India specifying the convergence date to be 1 April 2011, though 2014 for select Indian companies. However, the implementation date of Ind-AS is yet to be finalised.

Currently, the US, Japan and India are the three main economies that have not adopted IFRS. Canada, Brazil and Russia moved to IFRS in 2011.