The International Financial Reporting Standards (IFRS) poses challenges to industries, said S Narasimhan, Chairman, CII Puducherry State Council & Director, Sattva Logistics Pvt Ltd here.

Referring to the Finance Ministry’s proposal on new tax accounting standards related to income computation and disclosures and the agreement with the G20 countries to adopt the IFRS, following which the Ministry of Corporate Affairs laid out a road map for IFRS, Narasimhan said that from an industry point of view, it was going to be a challenging year.

Speaking on Financial Reporting & Tax Reporting in India – Adoption of Indian Accounting Standards (Ind-AS) & Income Computation and Disclosure Standards (ICDS), organised by the Confederation of Indian Industries here on Friday, he said this was because the industries would have one set of numbers to report for the quarter ending June 2015, but when in comparison with June next year, one could reach completely different set of numbers.

Hence, industries will need two sets of numbers — one under the existing accounting standards and another at the end of June 2016. Therefore, it was better for the industries to be prepared so that industrialists do not have to redo everything one year from now, he said.

Akil Master, Director, KPMG (India), said that with the notification of Accounting Standards, Indian financial reporting has undergone a seismic shift by introducing the most contemporary standards.

“It is a paradigm shift that introduces several new and complex concepts accompanied by detailed quantitative and qualitative disclosures. On the whole, it would lead to a better reflection of the financial performance of an entity and more relevant information in the hands of users of financial statements,” Director, KPMG said.

According to Master, the corporate sector would now need to do its part to make the implementation a success, starting with an acknowledgement of the fact that this is not just an accounting change but one that impacts the whole organisation and the way they do business.

Source: The New Indian Express – By Express News Service