Finally the Ministry of Corporate Affairs notified 35 Indian IFRS standards (Ind-AS), without announcing the implementation date. Therefore there is no guarantee that the April 1implementation date as indicated in the road map will be achieved. Standards on insurance, leasing, service concession arrangements, mineral resources, agriculture and rate regulation have not been issued. Accounting for real estate, financial instruments, fixed assets, foreign exchange accounting and first-time adoption have been changed significantly. Optional accounting treatment allowed under IFRS have been eliminated, for example, the option to account for investment property at fair value or preparing profit and loss account using a functional classification in IFRS is not available
The implementation of Ind-AS is also subject to successful enactment of the Companies Amendment Bill, as numerous sections such as 391, 394, 100, 78, Schedule VI and Schedule XIV conflict with the requirements of IFRS.
The tax situation is equally compelling. Typically IFRS accounts are meant for investors. Taxation has a different purpose and hence will have a different perspective compared to an investor. For example, an investor in an investment property company would evaluate the company based on the fair value of the investment properties. Tax, on the other hand, will focus more on rental income and realised profits on sale of the investment properties. Given that the objective of investors and tax authorities will remain different, it is an inevitable consequence that two sets of standards would be required. Taxation authorities cannot indefinitely continue to fill the gap by using court rulings as that would make the entire environment uncertain and litigious.
Business Line : OTHERS / ACCOUNTANCY : IFRS: More time will benefit all
The implementation of Ind-AS is also subject to successful enactment of the Companies Amendment Bill, as numerous sections such as 391, 394, 100, 78, Schedule VI and Schedule XIV conflict with the requirements of IFRS.
The tax situation is equally compelling. Typically IFRS accounts are meant for investors. Taxation has a different purpose and hence will have a different perspective compared to an investor. For example, an investor in an investment property company would evaluate the company based on the fair value of the investment properties. Tax, on the other hand, will focus more on rental income and realised profits on sale of the investment properties. Given that the objective of investors and tax authorities will remain different, it is an inevitable consequence that two sets of standards would be required. Taxation authorities cannot indefinitely continue to fill the gap by using court rulings as that would make the entire environment uncertain and litigious.
Business Line : OTHERS / ACCOUNTANCY : IFRS: More time will benefit all
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