INSTITUTE OF COMMERCE, NIRMA UNIVERSITY

B.COM (HONOURS) PROGRAMME

SEMESTER I - BATCH 2019-22

IFRS – INTERNATIONAL FINANCIAL REPORTING

STANDARD

o SUBMITTED TO : CA ISHU MITTAL

o SUBMITTED ON : NOVEMBER 7, 2019
o SUBMITTED BY : MEET SISODIA(IC191231)
 ACKNOWLEDGEMENT

I would like to express a special thanks of gratitude to my dean DR. UDAI PALIWAL
and my teacher CA ISHU MITTAL who gave me the golden opportunity to do this project
on the topic INTERNATIONAL FINANCIAL REPORTING STANDARD, which also
helped me in doing a great deal of analysis and that I came to grasp concerning such a
big amount of new things.
This project enlightened me regarding the applicability of IFRS and how different countries
use it.
I would also like to extend my thanks to my parents and friends who helped me and
motivated me to do the project in a limited time frame.
 ABSTRACT

In this project, we’ll study about International Financial Reporting Standards which are
adopted by International Accounting Standards Board (IASB) is a standardized format of
financial reporting that is gaining momentum worldwide and is a single consistent
accounting framework and is likely to become predominant GAAP in times to come.
Further we have seen the history and evolution of IFRS. They were introduced from June
1973 and further amendments were done later.

I have also highlighted how IFRS is applicable in India and what all standards are there
which differs it from Ind(AS).

At last I have discussed the list of IFRS standards and how they are applied in real life.
There are 17 standards and each have different importance and application.

This presentation focusses mainly on understanding IFRS and how it is important for a
student to know these things and apply it practically.
 CONTENTS

SERIAL PARTICULARS
NO.

1. ACKNOWLEDGEMENT

2. ABSTRACT

3. IFRS

4. HISTORY OF IFRS

5. EVOLUTION OF IFRS

6. OBJECTIVES

7. IFRS IN INDIA

8. LIST OF IFRS STANDARDS

9. CONCLUSION

10. BIBLOGRAPHY
 INTERNATIONAL FINANCIAL REPORTING STANDARD

International Financial Reporting Standards (IFRS) set common rules so that financial
statements can be consistent, transparent and comparable around the world. IFRS are
issued by the International Accounting Standards Board (IASB) to provide a common
global language for business affairs so that company accounts are understandable and
comparable across international boundaries. They specify how companies must maintain
and report their accounts, defining types of transactions and other events with financial
impact. IFRS were established to create a common accounting language, so that businesses
and their financial statements can be consistent and reliable from company to company and
country to country. They are a consequence of growing international shareholding and
trade and are particularly relevant for companies with shares or securities listed on a public
stock exchange. They are progressively replacing the many different national accounting
standards.
IFRS are widely used around the world but have not replaced the separate accounting
standards in the United States where US GAAP is applied.
 HISTORY OF IFRS

The IFRS began as an attempt to harmonize accounting across the European Union, but
the value of harmonization quickly made the concept attractive around the world. They are
occasionally called by the original name of International Accounting Standards (IAS). The
IAS were issued between 1973 and 2001 by the Board of the International Accounting
Standards Committee (IASC). On April 1, 2001, the new IASB took over the responsibility
for setting International Accounting Standards from the IASC. During its first meeting the
new Board adopted existing IAS and Standing Interpretations Committee standards (SICs).
The IASB has continued to develop standards calling the new standards the IFRS. IFRS
originated in the European Union, with the intention of making business affairs and
accounts accessible across the continent. The idea quickly spread globally, as a common
language allowed greater communication worldwide. Although the U.S. and some other
countries don't use IFRS, most do, and they are spread all over the world, making IFRS the
most common global set of standards.

The goal of IFRS is to make international comparisons as easy as possible. That goal hasn't
fully been achieved because, in addition to the U.S. using GAAP, some countries use other
standards. And U.S. GAAP is different from Canadian GAAP. Synchronizing accounting
standards across the globe is an ongoing process in the international accounting
community.
EVOLUTION OF IFRS
 OBJECTIVES

The objectives of IFRS:

a) to develop, in the public interest, a single set of high quality, understandable and
enforceable global accounting standards that require high quality, transparent and
comparable information in financial statements and other financial reporting to help
participants in the world's capital markets and other users make economic decisions;

(b) To promote the use and rigorous application of those standards;

(c) In fulfilling the objectives associated with (a) and (b), to take account of, as appropriate,
the special needs of small and medium-sized entities and emerging economies; and (d) to
bring about convergence of national accounting standards and International Accounting
Standards and International Financial Reporting Standards to high quality solutions.

(d) To provide a global framework for how public companies prepare and disclose their
financial statements. IFRS provides general guidance for the preparation of financial
statements, rather than setting rules for industry-specific reporting
 IFRS IN INDIA

On January 18, 2011, the Institute of Chartered Accountants of India (ICAI) announced
their intention to converge with IFRS by issuing an exposure draft calling for the release
of 35 Ind AS’ (Indian Accounting Standards).
After consultation from the Ministry of Corporate Affairs (MCA), the roadmap of
convergence began. These standards were designed using the ‘Framework for the
Preparation and Presentation of Financial Statements’, prepared by the ICAI, as a reference
point. (ICAI, 2011) It is a decision that is sure to benefit India in the future.

IFRS adoption is heavily widespread, with around 141 countries permitting or requiring it
either completely or in part according to a 2014 study by PwC. With India enjoying high
economic growth and added importance as a burgeoning superpower in the world, there is
a growing need for adherence to international standards of business.

Conversion is much more than a technical accounting issue. Ind AS (the converged IFRS
standards) in India may significantly affect a company’s day-to-day operations and may
even impact the reported profitability of the business itself. Conversion brings a one-time
opportunity to comprehensively reassess financial reporting.

On 2 January 2015, the Press Information Bureau, Government of India, Ministry of

Corporate Affairs (MCA) issued a note outlining the various phases in which Indian
Accounting Standards converged with IFRS (Ind AS) is proposed to be implemented in
India, for Companies other than Banking Companies, Insurance Companies and NBFCs.
The application of Ind AS is based on the listing status and net worth of a company. Ind
AS will first apply to companies with a net worth equal to or exceeding 500 crore INR
beginning 1 April 2016. Listed companies as well as others having a net worth equal to or
exceeding 250 crore INR will follow 1 April 2017 onwards. From April 2015 companies
impacted in the first phase will have to take a closer look at the details of the 39 new Ind
AS currently notified. Ind AS will also apply to subsidiaries, joint ventures, associates as
well as holding companies of the entities covered by the roadmap. For the detailed roadmap
and clarifications, click here.

While announcing the Ind AS implementation in his 2014 Budget speech, Finance Minister
Arun Jaitley also said that the standards for the computation of tax would be notified
separately.
 LIST OF IFRS STANDARDS

IFRS 1 - First-time Adoption of International Financial Reporting

Standards
IFRS 1 requires an entity that is adopting IFRS Standards for the first time to prepare a
complete set of financial statements covering its first IFRS reporting period and the
preceding year.
The entity uses the same accounting policies throughout all periods presented in its first
IFRS financial statements. Those accounting policies must comply with each Standard
effective at the end of its first IFRS reporting period.

IFRS 2 - Share-based Payment

IFRS 2 specifies the financial reporting by an entity when it undertakes a share-based
payment transaction, including issue of share options. It requires an entity to recognise
share-based payment transactions in its financial statements, including transactions with
employees or other parties to be settled in cash, other assets or equity instruments of the
entity. It requires an entity to reflect in its reported profit or loss and financial position the
effects of share-based payment transactions, including expenses associated with
transactions in which share options are granted to employees.

IFRS 3 - Business Combinations

The core principles in IFRS 3 are that an acquirer measures the cost of the acquisition at
the fair value of the consideration paid; allocates that cost to the acquired identifiable assets
and liabilities on the basis of their fair values; allocates the rest of the cost to goodwill; and
recognises any excess of acquired assets and liabilities over the consideration paid (a
‘bargain purchase’) in profit or loss immediately. The acquirer discloses information that
enables users to evaluate the nature and financial effects of the acquisition.

IFRS 4 - Insurance Contracts

IFRS 4 applies to all insurance contracts (including reinsurance contracts) that an entity
issues and to reinsurance contracts that it holds, except for specified contracts covered by
other Standards. It does not apply to other assets and liabilities of an insurer, such as
financial assets and financial liabilities within the scope of IFRS 9. Furthermore, it does
not address accounting by policyholders.

IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations

When a company makes the decision to sell an asset or to stop some part of its business, it
is making a decision that affects the future cash flows, profitability and overall financial
situation. The users of the financial statements should be informed about these events.
Therefore, IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations was
issued to highlight the results from continued operations and to separate them from the
results of the ongoing activities.

IFRS 6 - Exploration for and Evaluation of Mineral Resources

IFRS 6 specifies some aspects of the financial reporting for costs incurred for exploration
for and evaluation of mineral resources (for example, minerals, oil, natural gas and similar
non-regenerative resources), as well as the costs of determination of the technical
feasibility and commercial viability of extracting the mineral resources.

IFRS 7 - Financial Instruments: Disclosures

IFRS 7 applies to all entities, including entities that have few financial instruments (for
example, a manufacturer whose only financial instruments are cash, accounts receivable
and accounts payable) and those that have many financial instruments (for example, a
financial institution most of whose assets and liabilities are financial instruments).

IFRS 8 - Operating Segments

IFRS 8 requires an entity whose debt or equity securities are publicly traded to disclose
information to enable users of its financial statements to evaluate the nature and financial
effects of the different business activities in which it engages and the different economic
environments in which it operates. It specifies how an entity should report information
about its operating segments in annual financial statements and in interim financial reports.
It also sets out requirements for related disclosures about products and services,
geographical areas and major customers.
IFRS 9 - Financial Instruments
IFRS 9 is effective for annual periods beginning on or after 1 January 2018 with early
application permitted.
IFRS 9 specifies how an entity should classify and measure financial assets, financial
liabilities, and some contracts to buy or sell non-financial items.

IFRS 10 - Consolidated Financial Statements

IFRS 10 establishes principles for presenting and preparing consolidated financial
statements when an entity controls one or more other entities. Consolidated financial
statements are financial statements that present the assets, liabilities, equity, income,
expenses and cash flows of a parent and its subsidiaries as those of a single economic entity.

IFRS 11 - Joint Arrangements

IFRS 11 establishes principles for financial reporting by entities that have an interest in
arrangements that are controlled jointly (joint arrangements).

IFRS 12 - Disclosure of Interests in Other Entities

IFRS 12 requires an entity to disclose information that enables users of its financial
statements to evaluate the nature of, and risks associated with, its interests in a subsidiary,
a joint arrangement, an associate or an unconsolidated structured entity; and the effects of
those interests on its financial position, financial performance and cash flows.

IFRS 13 - Fair Value Measurement

IFRS 13 defines fair value as the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement
date (an exit price). When measuring fair value, an entity uses the assumptions that market
participants would use when pricing the asset or the liability under current market
conditions, including assumptions about risk.
IFRS 14 - Regulatory Deferral Accounts
IFRS 14 prescribes special accounting for the effects of rate regulation. Rate regulation is
a legal framework for establishing the prices that a public utility or similar entity can charge
to customers for regulated goods or services.

IFRS 15 - Revenue from Contracts with Customers

IFRS 15 establishes the principles that an entity applies when reporting information about
the nature, amount, timing and uncertainty of revenue and cash flows from a contract with
a customer. Applying IFRS 15, an entity recognises revenue to depict the transfer of
promised goods or services to the customer in an amount that reflects the consideration to
which the entity expects to be entitled in exchange for those goods or services.

IFRS 16 – Leases
IFRS 16 introduces a single lessee accounting model and requires a lessee to recognise
assets and liabilities for all leases with a term of more than 12 months, unless the underlying
asset is of low value. A lessee is required to recognise a right-of-use asset representing its
right to use the underlying leased asset and a lease liability representing its obligation to
make lease payments.

IFRS 17 - Insurance Contracts

Insurance contracts combine features of both a financial instrument and a service contract.
In addition, many insurance contracts generate cash flows with substantial variability over
a long period. To provide useful information about these features, IFRS 17:combines
current measurement of the future cash flows with the recognition of profit over the period
that services are provided under the contract; presents insurance service results (including
presentation of insurance revenue) separately from insurance finance income or expenses;
and requires an entity to make an accounting policy choice of whether to recognise all
insurance finance income or expenses in profit or loss or to recognise some of that income
or expenses in other comprehensive income.
 CONCLUSION
Irrespective of various challenges, adoption of IFRS in India has significantly changed the
contents of corporate financial statements as a result of more refined measurements of
performance and state of affairs, and enhanced disclosures leading to greater transparency.
With the rapid liberalization process experienced in India over the past decade, there is
now a huge presence of multinational enterprises in the country. Furthermore, Indian
companies are also investing in foreign markets. This has generated an interest in Indian
GAAP by all concerned. In this context, the role of Indian accounting standards, which are
becoming closer to IFRS, has assumed a great significance from the point of view of global
financial reporting. Indian companies using the Indian accounting standards are
experiencing fewer difficulties accessing international financial markets, as Indian
accounting standards are becoming closer to IFRS. Indian standards are expected to
converge even further in the future, especially after the challenges mentioned in study are
addressed over the next few years.
 BIBLIOGRAPHY

 https://www.slideshare.net/Ashish1004/project-on-ifrs

 https://www.ifrs.org/issued-standards/list-of-standards/

 https://en.wikipedia.org/wiki/International_Financial_Reporting_Standards

 https://brainly.in/question/10008647