IFRS may be fine-tuned to Indian needs
The International Financial Reporting Standards (IFRS), which several large companies in India will need to follow from April 1, will be flexible enough to suit Indian companies, the Union Minister for Corporate Affairs, Mr Salman Khurshid, has said.
“From Day 1, we have said we will converge, not adopt. There will be different standards on specific issues on which we need to have different standards,” Mr Khurshid told Business Line.
“Convergence,” he said, “gives you the flexibility to stop where you want to stop, adjust where you want to adjust and make an exception where you want to make an exception.”
Asked for instances, he said that “fair value” accounting was one of the areas the government had not taken a view yet. “We are working out. There will be areas where ‘fair value’ will apply, there will be areas where it need not apply,” he said.
Stressing that India should not be seen as a country that drags its feet, Mr Khurshid said that it was necessary to ensure that “we do not fall into the trap of some spurious sovereignty idea.”
He said that there was no confusion about alignment of IFRS with tax laws.
“There will be two parallel systems — the accounting system and the tax system,” he said.
On the expertise available in the country to help companies migrate to the IFRS system, the Minister observed that expertise will come only after the system is brought in, since people would come forward to get trained only after there is a market for their knowledge.
“There is no hypothetical training,” he said.
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