The Federation of Indian Chambers of Commerce and Industry (Ficci) has asked the government to delay implementation of the International Financial Reporting Standards (IFRS) beyond April 2011, saying the deadline was “highly unworkable” and “unfair”.
In a representation to the ministry of corporate affairs (MCA), Ficci said the transition should be brought in when companies were better equipped to deal with the new envisaged accounting concepts and standards. “Industry (should) be provided at least one year preparatory time from the date when the harmonised, notified and legislated converged accounting standards and other related matters are in place,” Ficci said. It pointed out that at the current juncture, global standards themselves are up for revision. Listing the changes, Ficci said financial instruments, such as derivatives, loans, and investments, accounting and reporting framework, accounting for income taxes, revenue recognition, and accounting for employee benefits, were undergoing a major revamp. Ficci noted the new Companies Bill was pending finalisation, and so was the Draft Taxes Code.
Further, it said there seemed to be some thinking on asking companies to prepare dual set of financial statements, one according to erstwhile Indian Generally Accepted Accounting Principles and another according to IFRS.
“This would lead to immense confusion and increase the hardship and cost for these companies,” it said. According to the roadmap laid out by the MCA, companies with a net worth of over Rs 1,000 crore will have to prepare their account books according to IFRS by April 2011.
Further, while scheduled commercial banks and urban cooperative banks will adopt it from April 1, 2013, insurance companies will convert their opening balance sheets with IFRS from April 2012.