Only 22 per cent of domestic companies have an operational plan for transition to Indian Accounting Standards (Ind AS) despite a whopping 65 per cent believing it will open up avenues for accessing capital from international markets, says a survey by Grant Thornton.
According to the assurance, tax, and advisory firm, only 22 per cent respondents have an operational plan for transition to Ind AS, while just 13 per cent have initiated the impact assessment process.
The government has proposed implementing the Indian Accounting Standards (Ind AS) that are converged with international norms.
The new norms are converged with International Financial Reporting Standards (IFRS) which are being followed in over 100 countries.
"Our survey shows that a majority of dynamic Indian businesses believe that the adoption of Ind AS will go a long way in enhancing the credibility and comparability of their financial statements with their global counterparts and open new doors to access capital for growth," Grant Thornton India LLP Partner, Nabeel Ahmed said.
"However, in a large number of companies, the awareness of accounting teams about Ind AS is fairly low and the impact of Ind AS on financial statements and organisations as a whole is not yet entirely evaluated," Ahmed added.
When asked about the challenges in implementation of Ind AS, most of the respondents believe the process of transition to Ind AS shall be completed within a year's time but the cost of transition would be sizeable.
Further, a majority of respondents (52 per cent) consider lack of knowledge of their financial reporting staff as a significant bottleneck in implementation of the new accounting standards, the survey said.
About 55 per cent of the respondents have just got a basic level of understanding of Ind AS and a vast majority (68 per cent) would either loop in external experts to meet the desired objectives or have not yet evaluated on in-house expertise as against external support, it added.
