ACCOUNTING

STANDARDS FOR
FINANCIAL REPORTING
 AGENDA
I. Objectives and Uses of Financial Statements for Users
II. Role of Accounting Standards
III. Development of Accounting Standards in India
IV. Role of IFRS
V. IFRS Adoption vs Convergence Implementation Plan in India
VI. Ind AS-An Introduction
VII. Difference between Ind AS and IFRS
 OBJECTIVES AND USES OF FINANCIAL
STATEMENT FOR USERS
• Financial Performance Information
• Facilitating better decisions
• Balance Sheet
• Assessing the organization
• Profit and Loss a/c
• Transparency & Accountability
• Cash Flow
• Legal requirements
Statement
• Benchmarking and Comparisons
• Notes to Accounts
• Historical Record FINANCIAL
• Management’s Performance Evaluation OBJECTIVES STATEMENT
• Basis for future activities

• Financial Transparency & Visibility • Investors

• Informed Decision making • Creditors
• Facilitates securing funding • Management
• Guides Strategic Planning • Regulators
• Ensures Compliance & Accountability • Employees
• Performance Evaluation & Benchmarking • Suppliers
• Effective stakeholder communication USES USERS • Customers
• Risk management & mitigation • Analysts
• Enhances investor confidence • Shareholders
• Supports internal control & governance • General Public
WHAT ARE ACCOUNTING ROLE OF ACCOUNTING
STANDARDS? STANDARDS
• Accounting standards are the written • For bringing uniformity in accounting methods
statements consisting of rules and guidelines,
issued by the accounting institutions, for the • To improve the reliability of financial statements
preparation of uniform and consistent
financial statements and other disclosures • Simplify the accounting information
affecting the different users of accounting
information. • Prevents frauds and manipulations
• Accounting standards lay down the terms and
conditions of accounting policies and practices • Helps auditors
by way of codes, guidelines, and adjustments for
making interpreting the items appearing in the • Easy Comparability of Financial Statements
financial statements easy and even their
treatment in the books of account. • Measures Management Performance

• Facilitates Quick Decision making

DEVELOPMENT OF ACCOUNTING STANDARDS IN INDIA

Evolution of International
1966
1
Accounting Standards

IASC (International Accounting

1973
The Institute of Chartered
Accountants of India)
constituted the Accounting
Standards Board (ASB)
2015
2 Standards Committee) was formed.
Renamed as IASB in 2001
3
1977
The Ministry of Corporate
4
Affairs notified Ind-AS

TIMELINE & Calendar Toolkit

 ROLE OF IFRS

• Consolidated set of rules and guidelines that every firm has to adhere to ensure their
financial statements are consistent with other firms worldwide.
• To promote and attract foreign investments for national growth.
• Eliminating different reporting for companies having offices in more than one country.
• To establish a universal language for the companies to prepare the accounting statements.
• To establish accounting rules to make it easier for the stakeholders to interpret/compare the
financial statements, irrespective of the business location.
• Make the accounting statements credible and transparent.
• To assist companies in appropriately categorizing and reporting financial data.
IFRS ADOPTION VS CONVERGENCE
IMPLEMENTATION PLAN IN INDIA

IFRS ADOPTION IFRS CONVERGENCE

Countries adopt IFRS as it is prepared Countries preparing own standard but
by IASB in line with IFRS
 IND AS-AN INTRODUCTION
• The Ind AS was issued by the Central Government of India in consultation with
the National Advisory Committee on Accounting Standards (NACAS).
• This was done under the supervision and control of the Accounting Standards
Board (ASB) of ICAI.
• The Ind AS was recommended by NACAS to the Ministry of Corporate Affairs
which is entitled to make Ind AS applicable to the companies in India.
• The Ind AS are named and numbered in the same way as their corresponding
IFRS.
• Companies not covered under Ind AS roadmap shall continue to apply existing
Indian GAAP. However, they can also voluntarily adopt Ind AS.
• Once Ind AS is applied, an entity cannot switch back to Indian GAAP.
 DIFFERENCE BETWEEN IND AS AND IFRS
CRITERIA IFRS IND AS
Adoption Globally Recognized across 144 countries Used in India
Structure/Scope Principle-based standards(Broad Guidelines) Rule-based standards(Specific Guidelines)
Timeline Issued in 2001 Introduced in 2015
Developed by IASB (International Accounting Standards Board) MCA (Ministry of Corporate Affairs)
Disclosure Disclose as a note that the FS comply with IFRS Disclosure is not mandatory
FS Components It includes the following It includes the following:
1. Statement of financial position 1. Balance Sheet
2. Statement of profit and loss 2. Profit and loss account
3. Statement of changes in equity for the period 3. Cash flow statement
4. Statement of cash flows for the period 4. Statement of changes in equity
5. Notes to financial statements
6. Disclosure of accounting policies
Balance Sheet Specific guidelines for preparing balance sheet No such requirements for balance sheet
Format with assets and liabilities to be classified as current format, but the guidelines are defined for
and non-current presenting balance sheet
List of IAS-41 | IFRS-17 | IFRIC-23 | SIC-33 40 Ind AS have been notified till date.
Standards
THANK
YOU