A majority of 54 per cent of listed companies are 'behind the curve' in carrying out an impact assessment for the new Indian Accounting Standards (Ind-AS), a survey said today.
This is despite the companies being aware that the new accounting system entails significant benefits in terms of the financial reporting framework.
According to a study by KPMG, only 17 per cent of the total respondents have completed an impact assessment to identify areas of differences that will impact their financial reporting while transitioning to Ind-AS, while 54 per cent are yet to commence an impact assessment.
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Transition to Ind-AS will require significant training of key stakeholders and require effective use of technology for smooth implementation.
The study also showed that 94 per cent of the companies are aware of the benefits of adopting Ind-AS.
The new standards, which will be fully implemented by fiscal 2017-18 are very similar to International Financial Reporting Standards (IFRS).
The survey said 63 per cent of the total respondents want voluntary adoption of IFRS.
"India Inc is gearing up for the long awaited convergence with IFRS, with a greater level of awareness of the changes expected on transition to Ind-AS," said Sai Venkateshwaran, Partner & Head of Accounting Advisory Services at KPMG India.
"However, this awareness has not translated into action with most of India Inc still behind the curve in carrying out an impact assessment specific to their organisations," he added.
The move is expected to significantly enhance the quality and transparency in financial reporting by Indian firms.
It could also enhance the international comparability of financial statements of Indian companies and make the Indian capital markets more attractive.
Senior executives from over 100 companies participated in the survey and included both listed and unlisted companies from varied industries.
"There is also an overall appreciation of the key challenges involved, both from an accounting perspective as well as the organisation-wide issues including technology changes, training needs of people, impact on business arrangements and structures and stakeholder communications," Venkateshwaran said.
