An impact study of IFRS

Conventional accounting measures profit on the income statement as an indicator of a company's performance while simultaneously excluding future profits by matching realised revenues against accrued cost. In contrast, Fair Value Accounting (FVA) defines profit on the Balance Sheet as an increase in net assets over a period. The discomforting factor for many is when the fair value of assets is measured by estimated future cash flows; it could include unrealised future profit. The fundamental accounting principle of conservatism would get the short shrift.

FVA can often be driven by different models and estimates which officially have to be determined by the management.

That leads us to a fundamental question — how will the fair value of assets and liabilities be “negotiated” between management and auditors? We may end up with a long chain of professional referencing where professional valuers, management and auditors flourish in an environment where no one is held accountable by the system, while the increased costs are borne by investors.

All this explains why the top honchos in the ICAI are rooting for IFRS but it is indeed inexplicable why Corporate India, especially those who have no need for foreign capital, have not raised their voice on these lines. Similarly, investor forums too have been silent.

Business Line : Opinion : An impact study of IFRS

Faltering steps of toddlers

The 2011 Census is likely to reveal — for the first time — a decline in the country's toddler numbers, mirroring a general drop in fertility rates. Indications of it are there in the United Nations' latest World Population Prospects, which projects a 1.4 million reduction in India's population below four years between 2000 and 2010, and even sharper falls thereafter

With toddler numbers coming down and exerting downward pressure on succeeding age cohorts as well, the ratio of dependents to the working-age population is expected to fall to 56 per cent in 2010 and to below 50 per cent by 2020 — where it will remain for the next three decades .

Business Line : Today's Paper / ECONOMY : Faltering steps of toddlers

A missed opportunity on IFRS

The Indian IFRS are referred to as Ind-AS, and is a substantially diluted version of the IFRS issued by the International Accounting Standards Board. IFRS and Ind-AS differences are caused not only because the standards are diluted
key differences are with regards to accounting of real estate sales, foreign exchange losses, agriculture accounting, investment property, first-time adoption requirements and financial instruments


Business Line : Today's Paper / OPINION : A missed opportunity on IFRS

Where are our inventor-businessmen?

In 1793, Eli Whitney invented the cotton gin. With its advent, a worker, who was earlier able to remove the seeds from only one pound of cotton daily, could generate over 50 pounds of cleaned fibre. The gin transformed the US, so much so that ‘King Cotton', till the 1861 Civil War, was contributing more than half of its exports.
Whitney was an inventor who was also a businessman. So were Cyrus McCormick — whose mechanical reaper in 1831 revolutionised wheat farming — and John Deere, who, with his cast-steel plough six years later, made it possible to work the heavy, yet fertile, prairie soils of the Mid-West.

Articles published in Taxmann

Articles published in Taxmann

Infatuated with big money

What the excision of those reportedly corrupt hides is more troubling: A value code spreading through the interstices of society as the dominant discourse, a world outlook by which an increasing number of Indians are beginning to live, and which threatens (by its very exclusiveness) to divide civil society even more, if not unravel it.
That value code rests on the belief in markets and capital as the defining lights of growth, itself narrowly contained in the idea of volumes where quantity matters more than quality, where the urgency to increase the size of the pie focuses attention, and not just of policymakers, on a set of indicators.
That faith in numbers — manifest in the attention articulate Indians have begun to invest on the GDP, the Sensex, automobiles, the demographic dividend and the growing club of Indian billionaires — flows from a slow but steady acceptance, now increasingly accelerated, of a faith in money as the agent of inversion.

Myth called Indian middle class Ashok Upadhyay

Three years ago when India's GDP growth was astonishing the world, a study by the McKinsey Global Institute predicted that in two decades its consumers would be a force to reckon with. This is how Eric Beinhocker, Diana Farrell and Adil S. Zainulbhai gushed in The McKinsey Quarterly of August 2007: “The same energy that has lifted hundreds of millions of Indians out of desperate poverty is creating a massive middle class centred in the cities.”