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LET US DISCUSS
IFRS
September 19, 2016
IFRS OVERVIEW
IFRS
September 19, 2016
IFRS 8 Standards
what is most critical?
An Overview of IFRS
(what we are moving towards)
Proposed
Global Approach
Fair Value A/cing
Group
Current
vs
vs
vs
Indian Approach
Historical Value A/cing
Standalones
An Overview of IFRS
(Boards/Committees Involved)
IFRS are standards and interpretations adopted by
the International Accounting Standards Board
(IASB)
International Accounting Standards (IAS) were
issued by the International Accounting Standard
Committee (IASC) between 1973 and 2000.
An Overview of IFRS
(Boards/Committees Involved)
The IASB replaced the IASC in 2001 and made a
couple of changes Amended some IASs
Replaced some IASs with new IFRSs
Issued certain new IFRSs on topics for which
there was no previous IAS.
Through committees, both the IASC and the
IASB have also issued interpretation of
standards.
An Overview of IFRS
(Boards/Committees Involved)
IFRS Comprises:
8 IFRSs and 30 IASs
18 IFRIC (International Financial Reporting
Interpretations Committee) and 12 SICs
(Standard Interpretations Committee)
There is also a framework for the Preparation &
Presentation of Financial
Statements which describes some of the
principles underlying IFRS.
1/4/2010
01/04/2011
IFRS
Comparatives
Reporting
date for FS
31/03/2012
1st IFRS
Financial Statements
31 March 2012 seems a long way off, but there is a lot of work
required to convert, as we have seen in countries which have already
adopted IFRS
*For a March year -end, adopting IFRS in 2011 with one year
comparative
management
will
need
the
time
to
to
develop
the
right
messages
for
the
marketplace.
Companies that fail to appropriately implement
IFRS may lose competitive advantage or may
present an inconsistent picture compared with
competitors. They may face regulatory actions too.
International Financial
Reporting Standards
IFRS
IFRS
IFRS
IFRS
IFRS
1
2
3
4
5
Overview of differences
Though Indian AS are based on IFRS, there are significant
differences between the two in many areas for eg.:
Legal differences
Schedule VI
Depreciation rates under schedule XIV
Court schemes
Shift from Historical cost basis to Fair Value
Derivative Financial Instruments
Tangible and intangibles acquired in business combinations
Loans and advances e.g. Interest free deposits
Control definition
Uniform accounting policies
Tangible assets
Component accounting
Repairs, maintenance and overhauling major expenses
Revaluation
Change in method of depreciation prospective
Deferred payment liability recognition of interest
Intangible assets- revaluation permitted if active market
Provision, contingent liability and contingent asset
Discounting
Disclosure of contingent asset
Discounting of deferred revenue
Events after balance sheet date proposed dividend
Deferred tax asset recognition - no virtual certainty
Consolidated Financial
Statements (CFS)
Indian GAAP
IFRS
Preparation of CFS
Mandatory (Exceptions:
Intermediate company, where
ultimate holding presenting CFS
under IFRS.
Potential voting
rights
Control - definition
Consolidated Financial
Statements (CFS)
Indian GAAP
IFRS
Uniform accounting
policies
Required but if
impracticable, disclosure
of items where different
policies followed
Mandatorily required
Preparation of FS
on the date of
acquisition for
computing parent
portion of equity in
a subsidiary
Goodwill
determination
IAS 32 / 39 Financial
Instruments
Indian GAAP
IFRS
Financial Instruments
& Equity
Classification
IFRS
Interest
income
Dividend
subsidiaries, schedule VI
established.
followed.
IFRS
Actuarial
Gains/losses
Termination
benefit/VRS deferral
Not permitted
Income
statement or
timing
differences
approach
Deferred tax Virtual certainty
In case of tax
losses
IFRS
Balance sheet liability
approach or the
temporary differences
approach.
Reasonable certainty
IAS 1 Presentation
IAS 1 does not lay down any format of financial statements
Minimum items to be presented on face and in notes are laid
down
Presentation more governed by substance; rather than form
Preference shares to be classified as liability vs. equity
based on substance
Portion of long-term loans payable with in twelve months
to be presented as current
Disclosures
Standards/ interpretations issued but not yet effective and their impact
Determination of fair values and key assumptions used about the same
Rammohan N Bhave
9322249833 and 9004043365
mohanbhave@gmail.com