Today the world is rigorously
heading towards standardization and scalability in every sector, so is the case
with the accountancy field too. As a
result in the year 2015, the Indian Ministry of Corporate Affairs issued a
framework considering the phases in which Indian Accounting Standards ( Ind AS)
converged with IFRS shall be adopted by companies in India. It excludes Banking
Companies. Non-Banking Financial Companies (NBFs) and Insurance bodies. Thus,
to be a prominent part of Indian corporate, a person must be well-versed with
these accounting norms called Indian Accounting Standards. Additionally, these
Ind AS are aligned with the International Financial Reporting Standards (IFRS)
which encourages the benefits it leverages to the foreign companies operating
in India.
The Ind AS is the derived version of old accounting
standards and IFRS. Earlier there existed 27 accounting standards which have
been replaced with 41 Ind AS. On the other hand International Financial
Reporting standards (IFRS) are the set of global accounting standards which
have been successfully adopted by 150 countries today. Thus, we can say that
Ind- AS which is 98% influenced by IFRS has a long applicability too.
Being the larger spectrum of accounting standards, Ind
As is governed by 7 prominent institutions. The associative involvement of
these governing bodies is itself shows the strength and viability of the Ind
As.
·
Institute of Chartered Accountants of
India (ICAI),
·
Confederation of Indian Industry (CII),
·
National Advisory Committee on Accounting
Standards (NACAS),
·
Federation of Indian Chambers of Commerce
and Industry (FICCI),
·
Associated Chamber of Commerce and
Industry of India (ASSOCHAM),
·
Securities and Exchange Board of India
(SEBI),
·
Insurance Regulatory Development Authority
of India (IRDA).
The IFRS structure is governed by the regulatory body,
IFRS foundation in the three-tier format.
·
Public Accountability:
To enhance public accountability the monitoring board is assigned. This
includes the capital market authorities who serve as the bridge between the
trustees and public authorities.
·
Governance:
The trustees of the IFRS Foundation are responsible for providing effective
governance and oversight to the IFRS. Additionally, these trustees focus on
constitution and processing on accounting standards too.
·
Independent Standard-Setting:
Eventually, the IASB, has been designed as the independent body backed by the IFRS
Interpretation Committee.
Thus, these powerful bodies at regulation make the
adoption of IFRS and Ind AS a promising choice for the corporate across the
world.
IFRS is certainly the sound standard framework that is
chosen by many today, but undoubtedly, Ind AS is advancing speedily in this
race too. As a result, Ind AS is paving its way to being a better tomorrow.
Thus, the significance of Ind AS and IFRS can be challenged neither today nor
tomorrow.
·
Global Acceptance:
These standards are being adopted by several corporate for their worldwide
acceptance. Yes, the rules, norms, and conditions of these accounting and
financial reporting standards adhere to the requirement of almost all
continents.
·
Encourages Harmony: Being based on unanimous decisions and
involvement of bodies across the world, the framework of IFRS and Ind AS
bridges the gap of disparity. Therefore, the harmonization takes place across
the international corporate.
·
No compliance limitations: It becomes highly effective and standardized
for the companies to comply with the common set of rules and regulations. Thus,
there exists no limitation while talking of legal compliances with Ind AS and
IFRS in practice.
·
Supports International Expansion: Irrespective of what country you belong to,
what plans you have, the adoption of Ind AS and IFRS set you on the get set go
mode for the global expansion.
The Ind AS has been made compulsory in many corporate
in India and so is the case with IFRS in other countries too. Thus, there is no
harm in saying that both these accounting and financial reporting standards are
here to stay today and tomorrow. Their applications and scopes are globally
extended owing to their compatibility and governance which shows their
reliability. So, gear up, learn, and lean on these standards to liberalize your
professional journey.
Talking of mere adoption
of IFRS and Ind AS may sound very simpler, but believe us it requires a
thorough understanding of each standard. Yes, even if these standards are
clearly stated the practice and effective implementation is what one must gain
command over. Are you wondering how
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