CII Summit Draws A Roadmap To Facilitate India`s Technical Preparedness

Adoption of International Financial Reporting Standards - Challenging but Rewarding : CII

The Confederation of Indian Industry (CII) today organized a Summit on "IFRS: Countdown to Convergence" in Mumbai. The objective of the Summit was to make the industry aware of the challenges to convergence from the Indian Generally Accepted Accounting Practices (GAAP) to the International Financial Reporting Standards (IFRS) and assist in drawing of a roadmap to facilitate their technical preparedness through advance planning.

Delivering the keynote address at the Summit, Mr. Deepak Ghaisas, Vice Chairman & Director, I-flex Solutions Ltd., said that adoption of IFRS would be rewarding if they are adopted over the world. Conforming to multiple set of standards in different regimes becomes very complicated.

Speaking at the inaugural session, Mr. Rajiv Memani, Chairman, CII National Committee on Accounting Standards & Country Managing Partner, Ernst & Young, said, "IFRS has been adopted by over a 100 nations. Since it is based on fair valuations, the major challenge that it faces in India is deficit of talent. We have only one chartered accountant in India for 10,000 people.”

Elucidating the benefits of adopting IFRS, Mr. Rostow Ravanan, CFO, Mindtree Consulting Ltd., said, "The companies will save a lot of costs on financial reporting, the same set of policies and standards can be adopted, investors will gain as they will have a similar set of accounting practices over the world, it will benefit cross border acquisitions and will help financial accountants to access accounts over the world.”

Mr Ravanan also stated that there is a lot of support for IFRS from regulatory authorities and all new pronouncements are expected to be IFRS - compliant.

Speaking on the applicability of IFRS in India, Mr. Dolphy D'Souza, Partner, Ernst & Young, said, "We have a number of legislative conflicts between GAAP and IFRS. If IFRS have to be incorporated, legislative conflicts need to be taken care of. “Mr. D. D. Rathi, Director & C.F.O., Grasim Industries Ltd., Mr. B. Sanyal, Corporate V.P. – Finance, Tata Consultancy Services, Mr. Shailesh Haribhakti, Independent Director explained the intricacies of adoption of IFRS during the session titled: "How will IFRS affect my Company?"

On the occasion, CII - Ernst & Young publication “Journey to IFRS – A Guide on Transition’, was also released. The publication maps the process of integrating internationally recognized financial standards with the financial statements as presented in India and would be useful in answering the questions relating to the impact on financial statements, delineating the significant dissimilarities between IFRS and Indian GAAP and the implementation and maintenance process.