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 would this knowledge be delivered? What should you be looking for? Whom to approach? Sit back and relax, because KJ Education serves this purpose at greater ease. Only with few clicks and certain movements on this platform, you will get complete access to our video lectures that bridge this gap beautifully. So, are you ready to be the one amongst the few to be a great Ind AS and IFRS? If yes, contact us and we will be at your services.