RBI's recommendation to the Corporate Affairs Ministry on convergence of Indian Accounting Standards with International Financial Reporting Standards (IFRS) will ensure Indian firms are at par with their global counterparts, KPMG said today.
In the fourth bi-monthly monetary policy statement, 2015-16, RBI today said it has recommended a road map to the Ministry of Corporate Affairs for implementation of Indian Accounting Standards (Ind-AS) by banks and non-banking financial companies from 2018-19 onwards.
"The recommendation is a welcome development and provides the much-needed clarity to this sector on the expected timeline for this major financial reporting reform.
"The road map being proposed in India closely follows the timelines for the global adoption of the new standard on financial instruments, in particular the new expected loss model for impairment of financial assets, which is slated for 2018," the accounting and consultancy firm said in a release.
This will ensure these Indian companies will not be far behind their global counterparts while having the benefit of learning from the global experience, it added.
"The new financial reporting framework will have an impact on not just on financial position and performance, but also on business models, processes, systems, and regulatory requirements for banks and NBFCs," said Sai Venkateshwaran, Partner and Head, Accounting Advisory Services, KPMG in India.
The government in Budget 2014-15 had emphasised on the urgent need for convergence of the current Indian accounting standards with IFRS.
RBI has constituted a working group under Sudarshan Sen for its implementation, the report of which will be out by October-end for public comments.
