IFRS in India: Challenges and Opportunities

Accounting is the lingua franca of business. In India, financial statements are guided by certain set of principles and concepts. In order to maintain uniformity, the accounting standards in India are issued by the Institute of Chartered Accountants of India (ICAI) in consultation with NACAS. The ICAI, recognizing the need to harmonize the diverse accounting policies and practices in use in India, constituted the Accounting Standards Board (ASB) on April 21, 1977. According to ICAI,1 “The composition of the ASB is fairly broad-based and ensures participation of all interest-groups in the standard-setting process.” However, with the fast changing economy, liberalization, increasing foreign investment in the country, it has become now necessary for India to comply with International Financial Reporting Standards (IFRS). International Accounting Standards are issued by IASB, which was established in 1993; now known as IASC, it issues IFRS time to time to bring uniformity globally. In India, it is mandatory to comply with IFRS by 2011. Though there will be adoption of IFRS in a phased manner and an initiative has been taken by various professional bodies to organize training programs and seminars for imparting knowledge and creating awareness about IFRS, but the process of transformation is not as smooth and easy as it appears. Therefore, this paper is an attempt to find out up to what extent IFRS has been adopted by the organizations, what challenges and opportunities companies are facing regarding IFRS, and what are the measures that can be taken to make the process smooth and flawless. The paper focuses on the awareness and adoption of IFRS in India.