India is close to accepting IFRS

May 18: India Inc is close to accepting the global accounting standards which will make its accounting system more predictable, enhance transparency and more important enable investors to predict the nature, timing and uncertainty of future cash flows. If investors understand a company they will be willing to invest in them, said Mr Prabhakar Kalavacherla, member, International Accounting Standards Board (IASB).

This will also decrease the cost of capital he said India has been discussing the pros and cons of adopting the International Financial Reporting Standards and there were many issues to be resolved like taxation and whether the IFRS provisions were compatible with the rules and regulations of various regulatory authorities in India.

Several speakers at the CII 3rd edition of IIFRS Summit 2011 said the differences that needed to be bridged between the Indian and International accounting standards (AS) ranged from about 12 to 45-50.

Mr M.M. Chitale, chairman, National Advisory Committee on Accounting Standards (NACAS), stressed that the standards set so far under the Indian AS, which is a derivative of IFRS and the old accounting system of the nation, need to begin implementation and can be modified as time goes by, to suit the needs of the industry and the world. It will not just reduce the cost of capital, but firms can raise it in a more dynamic way, said Mr Gautam Chhaochharia of UBS Investment Research.

Source: http://www.deccanchronicle.com/channels/business/news/india-close-accepting-ifrs-525