Investors will pay premium for comparable financials: Dipak Bohra

Dipak Bohra

It helps when accountants speak a common accounting language, facilitating cross-border economic activity. Also, global investors are willing to pay premium valuations for comparable financials.I do not see any major challenge faced by large IT companies in India, as they are already publishing their statements in IFRS/US GAAP. Indian IT companies will face a challenge, in terms of additional disclosure requirements in revenue contracts, as they will have to reorient/reconfigure their IT systems to report such data. However, companies currently on the Indian GAAP platform will have to undergo changes in their reporting, disclosures and build their back-end system/process to support the enhanced reporting requirements. We are hardly left with seven months to achieve this.Dipak BohraSenior vice-president (global controller), Wipro

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Indian revenue authorities are averse to fair value accounting: Indrajit Pathak

Indrajit Pathak

Though about seven months are left for mandatory implementation for select companies, the fact that five months have already passed for preparation of comparative financial statements for the previous year, not only under existing accounting standards but also under Ind AS (which will have to pass through auditors), makes the situation somewhat worrying. A major change is reporting, predominantly under fair value, as opposed to historical costs, being followed for ages.The areas corporate India is still grappling with include:nThe format for presentation of balance sheet and statement of profit & loss (schedule III of the new companies Act) is not strictly aligned with requirements of Ind-AS. More, confusion prevails on whether disclosure requirements in the schedule for items such as CIF (cost insurance and freight)/FOB (free on board) value of imports/exports, consumption of raw materials and stores segregated into imported and indigenous, etc, will remain valid for consolidated

Unlearn, learn, re-learn to be Ind-AS ready: V S Parthasarathy

V S Parthasarathy

Despite its long-term benefits, there are a lot of short-term challenges. The challenges are both technical and non-technical such as readiness of people, processes and technology. To be prepared for Ind-AS, we all have to unlearn, learn and re-learn. We are providing intensive training to our employees to sharpen their saws.We had created a 'Corporate Center of Excellence' to prepare for IFRS initially, but when it was delayed we still continued with the team and momentum for a smooth transition to Ind-AS across the group. We have partnered with the 'Big four' consultants to help us align our systems and processes. A dedicated IT team is also helping with building technology platforms to align the systems to make the transition successful.To focus on a few of the technical challenges, under the new definition of 'control', we have to re-examine which of the entities to consolidate, specifically focusing on substantive participative rights. For business combinations, all identifiable a

Minimise chances of changes post implementation: Nilanjan Roy

Nilanjan Roy

The phased implementation road map for Indian Accounting Standards, aligned to the International Financial Reporting Standards (IFRS), is a major step forward for India's integration with the global economy. However, there are some challenges that need to be addressed while implementing these.Globally, the application of the new standards on revenue has been deferred until January 2018, owing to the need for clarity on various technical accounting aspects and system implementation/software changes. The new standards are yet to be implemented anywhere in the world. India would be the first to do so. From the perspective of the Indian telecom sector, a rapidly-evolving industry operating across a broad revenue spectrum - voice calls, high-speed data, satellite communications, etc - there could be implications on matters such as multiple arrangements, transaction price and variability thereto, goodwill, indefeasible rights of use and capacity arrangements, fair valuation of deposits and a

Intangibles will pose a challenge: M P Vijay Kumar

M P Vijay Kumar

Typically, the challenges faced by technology companies are on account of the variety of assets they hold and the intangibles they create out of the business. In terms of measurement of tangible assets, the proposed Indian accounting standards aren't far from existing ones. Therefore, this might not prove to be an arduous journey. It is the intangible part that will pose the challenge.Also, on the fair value measurements of financial instruments and business combinations, there is no detailed prescription in the existing standards. As such, both measurement and disclosure of these in terms of data they need to maintain and also to fulfil the disclosure criteria, could be another challenge. There will be a consequential amendment to the accounting systems and data capturing methods. But considering the expertise and guidance available at the global level, companies might not face an uphill task here.On the revenue measurement and recognition front, the draft standard on revenue measurem

The government at the Centre, led by the Bharatiya Janata Party (BJP), and the Aam Aadmi Party government in Delhi were at each other's throats last week for allegedly saying something and doing just the opposite. Participating in a discussion in Patna, Delhi Chief Minister Arvind Kejriwal said the central government had declared null and void its decision to enhance per acre land acquisition compensation to farmers in Delhi from Rs 57 lakh to Rs 3.5 crore. Therefore, the BJP was anti-poor and anti-farmer - it talked about cooperative federalism, but did the opposite, Kejriwal said. Within 24 hours, came the BJP's repartee: It cited an earlier tweet by Kejriwal slamming Rashtriya Janata Dal chief Lalu Prasad - "Lalu made crores (of rupees) in the fodder scam and he has to pay only Rs 25 lakh as fine. A sweet deal?" - and said Kejriwal spoke of rooting out corruption but extended a hand of friendship to Prasad in Bihar. "This is a very innovative way of fighting corruption," said BJP sp

Walking the talk

While talking about the continuing silence of Rural Development Minister Chaudhary Birender Singh on the amendments to the land acquisition law of 2013 initiated by the National Democratic Alliance government and the furore over those in Parliament, senior Congress leader and former rural development minister Jairam Ramesh said, "Is there a rural development minister?" Tongue firmly in cheek, he added: "In this government, there is a pradhan mantri (prime minister) and there are 'santris' (guards). There are no mantris (ministers)." Ramesh pointed out that on one occasion, when President Pranab Mukherjee asked for some clarification while signing the land ordinance, Singh was conspicuous by his absence - it was Finance Minister Arun Jaitley and Minister for Road Transport and Highways Nitin Gadkari who did the needful.

Mantri versus santri

Amid spiralling prices, 700 kg of onions went missing from a Mumbai shop last week. As reports of the theft emerged, crime beat reporters sent a flurry of messages to a senior police officer to ascertain the facts. The reporters were surprised to receive a quirky response from the official: the image of a ring, in which the jewel wasn't a diamond, but an onion.

Onion as 'jewel'

With reference to the column, "Why calls drop" (August 28), the issue has assumed national importance with the intervention of Prime Minister Narendra Modi himself. It is not a small matter as every instance of call drop brings more revenue to private telecom companies. In all fairness, they seem to have stage-managed the issue by taking shelter in technicalities like shortage of communication towers and unavailability of spectrum.The Centre has already asked the Telecom Regulatory Authority of India to consider introducing the system of charging calls on per second basis instead of the current pro-telco mechanism of charging the same on 60-second basis. This would bring relief to consumers. This apart, the setting up of mobile towers atop government buildings instead of residential areas due to fear of radiation emission hazards is also gaining ground.Finding a solution that will not hamper further expansion of spectrum volume available to telcos will likely not be easy as there is al

Letters: Hello, can't hear you

According to the Population by Religious Communities 2011 Census released by the Centre on August 26, India is undergoing a fertility transition and there is irrefutable evidence that fertility has declined substantially across all major communities in the country.The variation in fertility rate among religious groups is on account of the differences in the stage of their transition. While discussing religious differentials in India, it is important to note that fertility for a religion varies across states. Census data show that growth rate varies across states. Also, the process of fertility decline at the state level is not confined to a specific social group. This suggests there is no 'Hindu fertility', 'Muslim fertility' or 'Christian fertility' as such. Besides, even in any state, there is heterogeneity within a religion. The indicators used in comparisons are averages for the communities in the states and not the norms for the communities.The concern with population should not b

Letters: Let's count on people

While the Reserve Bank of India (RBI) has to contain inflation, its impact should not hamper demand for credit and investment as the economy, which is in on the path to recovery, needs a boost in investments. In this context, the clamour for a cut in interest rates is justifiable and is the need of the hour. Yet that has not happened, despite the fact that macroeconomic conditions are favourable.Though the RBI reduced repo rate by 75 basis points in 2014-15 and brought down the repo to 7.25 per cent the full transmission of the cuts are yet to take place. Constraints being faced by banks are in terms of cost of funds and the rising impairment of loans and advances. Greater significance must be accorded for transforming the judicial system to support the banking industry.While lending, banks must monitor projects and promoters to ensure the projects' on-time execution and cash generation. The utilisation of lenders' money for the specified purpose is of paramount importance. The RBI sho

Letters: Time for strict action

Click of graphic

According to estimation based on the last caste census in 1931, Patidars account for 15% of Gujarat's population

Why Gujarat is seeing violence over the Patidar agitation

Indian govts too thin-skinned about criticism from business

Critical mass

Government junks plans to modernise airport sector

Step backward on reform

Slow approach upsets government's divestment plan

Costly delay

Nitin Gadkari, Union minister for road transport and highways, continues to fight a battle, not just with his weight, but also his opponents' jabs relating to it. After Bihar Chief Minister Nitish Kumar dismissed Prime Minister Narendra Modi's ~1.25-lakh-crore special package for the state as a mere re-packaging of earlier schemes, Gadkari challenged Kumar to a televised debate on every project under the special package and asserted that the Centre had prepared all the details under the scheme. Immediately thereafter, Kumar dissed the challenge on Twitter saying, "Gadkari has a habit of punching above his weight. Before debating the whole package, he should first answer questions relating to his department," adding that the embattled minister's department would hog the biggest share of the package.

Weight and watch

Congress Vice-President Rahul Gandhi is not one to miss an opportunity to hit out at arch rival Bharatiya Janata Party (BJP). Addressing locals during his trip to Jammu, he took the BJP to task for describing his treks across the countryside as "tourism". Gandhi said: "For the BJP, visiting the homes of the poor, hand-holding the farmer and embracing the hard-working labourer appear 'touristy'. But when they hobnob with businessmen, indulge in crony capitalism and hand over the country's resources to a select set of business houses, it is hard work." Much to the chagrin of the BJP brass, post his sabbatical, Gandhi has been zipping across the country, taking up regional issues and nitpicking at BJP members along the way.

Working holiday

Vodafone India chief executive Sunil Sood's comment at a press conference - that the views of the telecom minister (Ravi Shankar Prasad) and the Department of Telecommunications secretary (Rakesh Garg) didn't count as the view of the entire government - hasn't gone down well with the ministry concerned. The ministry conveyed its 'strong displeasure' to the company, forcing Sood to write a letter to clear the air. In the letter, Sood blamed the media for quoting him out of context. Top sources in the ministry said Sood sought an appointment with the telecom minister but was not given one. Around the same time (when Sood made that comment on August 17), Vittorio Colao, chief executive officer at Vodafone Group, sought a meeting with the minister to discuss its India investment plans. He, too, has not been given an appointment.

Missed call

The agitation by the Patidars, popularly known as the Patels, in Gujarat will have far-reaching implications for India, even if their stir ends in a week. The clues can be found in the movie, Namak Haraam, in which an industrialist (Amitabh Bachchan) gets his close friend (Rajesh Khanna) to spy on his company's labour union, but the friend soon aligns with the union's mission and plans a strike.The Patels helped the Bharatiya Janata Party (BJP) come to power in the state several years ago; now the same community has gone against it. There is no point in trying to find the reasons for their protests, but for sure, the faith the BJP had in this community has been shaken. This is a Black Swan-like situation no one foresaw although it was happening in the very state where Prime Minister Narendra Modi conceived the Gujarat Model of development during his term as chief minister.I remember how Indira Gandhi returned to power in 1980 when the Janata Party could not manage by itself. Obviously,

Letters: History repeats itself

With reference to the column, "A more responsible politics" (August 27), a lot of water has flown under the bridge since the generation of B R Ambedkar. That generation could never have imagined the decay of personal character of people and politicians now. Add to this, the party system and an electoral democracy where those in power can ignore the minority parties and you have the process of dialogue and debate between the government and the Opposition, often not benefiting the latter.That is why the Opposition often resorts to uncivil ways to press their demands. A possible solution would be to abolish the party system and let elected representatives be independent.Kishor Kulkarni  MumbaiLetters can be mailed, faxed or e-mailed to:The Editor, Business StandardNehru House, 4 Bahadur Shah Zafar MargNew Delhi 110 002Fax: (011) 23720201E-mail: letters@bsmail.inAll letters must have a postal address and telephone number

Letters: Don't ignore the minority

After enjoying double-digit gross domestic product growth for decades, the Chinese economy has been bitten by the reality bug. One cannot continue investing in infrastructure without ensuring reciprocal economic growth through productive work. If the latter happens, it would reflect in the government's revenues in the form of more tax earnings.In India the Centre and state governments have made announcements of aid packages a routine affair without checking the amount that is actually sanctioned or how much is reaching the intended beneficiary. The late prime minister, Rajiv Gandhi's theory that for every rupee sanctioned for the common man only 15 paise reaches him has been proven right. One wonders if even 5 paise reaches the real beneficiary today.The ever-escalating costs of projects and insistence on the public-private partnership model to make more money will prove dear for the country. The ever-growing financial deficits of several states and also that of the Centre should be se

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