The government has announced that it plans to introduce more changes to the International Financial Reporting Standards (IFRS) in order to make it for suitable for the Indian companies. The Indian the National Advisory Committee on Accounting Standards (NACAS) had, earlier in the year, suggested changes to the IFRS known as 'carve-outs', through Ind-AS, which were discarded by the International Accounting Standards Board as non-compliant with IFRS. The Indian government's move may be attributed to the belief that an eventual transition to IFRS is inevitable but to protect the Indian industry from short-term shocks that might result from the adoption of IFRS-in full, certain changes are needed.
The Ind-AS was a result of opposition of industry leaders to IFRS as most of them believe that it would result in significant changes in profitability and revenue recognition. However, there are lots of accountants who believe that changing the Ind-AS again might not be such a good idea after all because it would not help in raising capital overseas which was the primary reason for shifting to IFRS at this point. The other problem is that Ind-AS financial statements will not be acceptable in any overseas transactions. On the other hand, others view the change as a stepping stone to a smooth transition to IFRS, the global standard, in the near future.
The government has announced that it will take some time to introduce these changes as it feels it is important that the changes suggested by developed markets like United States of America and Japan must first be analyzed thoroughly. We have to see how IFRS will meet our requirements. Our markets are different, our standards are different," secretary, ministry of corporate affairs D K Mittal said.