Know Your Rights!!

http://economictimes.indiatimes.com/news/economy/finance/govt-deferred-ifrs-implementation/articleshow/7578251.cms A news article in Economic Times - 26 February 2011 which states that as per the press note of MCA dated 25-02-2011 the implementation of IFRS will miss the deadline of 1-April-2011 but is sure to come some day......;). Hopeful still coz the headline reads deferred and not cancelled!!!! The government has deferred the implementation of international financial reporting standards , acknowledging industry demand to extend the April 1 deadline to remove ambiguities on taxation issues. The decision has come as a relief for over 300 large companies, which were to submit their financials as per the global accounting standards, commonly called IFRS. The ministry of corporate affairs on Friday said it remained committed to the transition as it notified 35 accounting standards that are in line with IFRS. “After detailed consultations, it was felt necessary that industry should be g...

http://pib.nic.in/newsite/erelease.aspx?relid=70248 Finally, we have a press note specifiying that the Converged Indian Accounting Standards (IND AS) are notified by MCA dated 25-February 2011. The IND ASs (35 standards notified) are converged with International Financial Reporting Standards (IFRS). The verbatim script of the press note as released by the MCA is as under: QUOTE Reliable, consistent and uniform financial reporting is important part of good corporate governance practices worldwide in order to enhance the credibility of the businesses in the eyes of investors to take informed investment decisions. In pursuance of G-20 commitment given by India, the process of convergence of Indian Accounting Standards with IFRS has been carried out in Ministry of Corporate Affairs through wide ranging consultative exercise with all the stakeholders. Thirty five Indian Accounting Standards converged with International Financial Reporting Standards (henceforth called IND AS) are being notif...

Source: http://pib.nic.in/newsite/erelease.aspx?relid=69867 Ministry of Corporate Affairs 17-February, 2011 16:56 IST Convergence of Indian Accounting Standards with International Financial Reporting Standards Availability of essential financial information about a company to its shareholders and other stakeholders in accordance with internationally accepted financial norms is considered as an integral and important part of good corporate governance. To ensure this and to implement the G-20 commitment to achieve a single set of high quality global accounting standards, the Government has taken a decision to achieve convergence of Indian Accounting Standards with IFRS in a phased manner beginning with April, 2011 in accordance with the roadmap suggested by Core Group and Technical Groups set up by the Government. India's commitment to the policy of 'convergence' of Indian Accounting Standards with IFRS would allow it to consider local economic conditions and environment whil...

The ministry of corporate affairs (MCA) has moved a cabinet note to amend the Companies Act of 1956 with the aim of converging Indian company law with the International Financial Reporting Standards (IFRS). The government seems will go the ordinance way and clarity with regards to taxation still has to come in. CNBC-TV18's Menaka Doshi discussed the IFRS issue with Sir David Tweedie, Chairman of the International Accounting Standards Board (IASB), Prabhakar Kalavacherla, member, IASB and TV Mohandas Pai, head, SEBI Sub-Group on IFRS and asked them if it would be a big deal if India was unable to meet the April 1 deadline. Below is a verbatim transcript of their interview. Also watch the accompanying video for more. Q: Are you happy with the fact that India has picked convergence over adoption? Tweedie: You have to choose what you want to do. Our mission is very simple; we have got to have one single set of global standards. It doesn't matter whether transaction takes place in...

New Delhi, Nov. 13 The Institute of Chartered Accountants of India (ICAI) has brought out a list of over 400 companies that should converge their accounting practices with International Financial Reporting Standards (IFRS) by April 2011. IFRS — issued by International Accounting Standards Board — is acknowledged by 113 countries. This is ICAI’s first list and more companies would be added on its next list, sources said. The first list comprises 439 companies. It includes BSE-Sensex companies, NSE-Nifty companies, companies that have raised debt of over $50 million abroad, financial sector companies, publicly accountable companies (with total borrowings of over Rs 1,000 crore), Indian subsidiaries of foreign companies that have implemented IFRS at the parent company and companies outside these categories with capital of over $50 million abroad. Significantly, ICAI is mulling including venture capital funds also in the IFRS convergence process. The first list includes BSE and NSE compani...

The basic concepts underlying preparation of financial statements will undergo significant change upon implementation of International Financial Reporting Standards (IFRS) in India. There are three key aspects that run through each principle laid down in IFRS: substance over form , fair value , and r ecognizing time value or time cost of money (present value) . These three items need to be understood carefully. Indian GAAP (generally accepted accounting principles), like any other GAAP, also recognizes the importance of substance over form. Accounting Standard 1 (AS-1) on “Disclosure of Accounting Policies” states that substance rather than form should be the guiding principle in selection and application of accounting policies. However, the true application of this principle will happen only under IFRS. That’s because IFRS is more contemporary and has prescribed the treatment for evolving issues. Also, unlike Indian GAAP, it does not recognize the concept of a legal override. Thus, IF...

Implementation of the International Financial Reporting Standards, seem to have hit a roadblock due to differences between the Finance Ministry and Ministry of Corporate Affairs, reports CNBC-TV18's Aakansha Sethi quoting sources. CNBC TV18 had first broken this story where it was reported that the Ministry Of Corporate Affairs would be passing an ordinance to implement IFRS. The Minister for Corporate Affairs Salman Khurshid had also told CNBC-TV18 in an interview that IFRS would be implemented from the April 1, 2011. However this may not be possible now because of differences between the Finance Ministry and the Ministry of Corporate Affairs. Sources close to the development said there are two key differences. One is that the finance ministry says that implementation from April 1, 2011 is not possible because the accounting norms have not been notified as yet. This will only be done by December and in three months from January to March is too little to educate stakeholders and th...

FAIR VALUE: Fair value for most financial instruments, while it has limitations, is the best available method to reflect market conditions when accompanied by appropriate disclosure. Financial instruments currently reported using fair value includes: • as assets most equity and debt securities held • derivatives Most assets and liabilities While fair value information is generally relevant to investors, it is not always sufficiently reliable or practical to implement. These three criteria—relevance, reliability, and practicality—need to be more fully understood prior to any proposed extension of fair value to assets and liabilities where it is not used today. Examples: Assets trade receivables and most bank loans inventories used in production plant and equipment Liabilities trade payables contingent liabilities company-issued debt insurance and other non-traded liabilities Reporting what most financial instruments can be exchanged f...

Derivative instrument is one whose principal source of value depends on the value of something else, such as an underlying asset, reference rate or index. First and foremost, a derivatives instrument is a contract, or agreement, between two counter parties. Unlike many market transactions where ownership of an underlying asset is immediately transferred from the seller to the buyer, a derivatives transaction involves no actual transfer of ownership of the underlying asset at the time the contract is initiated. Instead, a derivative contract simply represents a promise, or an agreement, to transfer ownership of the underlying asset at a specific price and time specified in the contract. The counter party that contracts to buy is said to have established a long position. A counter party that contracts to sell is said to have established a short position. Because of the bilateral nature of derivative contract, the value of contract depends not only on the value of its underlying asset but...

1.1 Meaning of Consolidated Financial Statements Consolidated Financial Statements (CFS) are the financial statements of a group presented as those of single economic entity. A group is a parent and all its subsidiaries. A parent is an investor that controls another entity called subsidiary. The parent and subsidiary (ies) constitute a Group. A parent company is required to prepare CFS of the Group as a whole. CFS are: 1. Consolidated Balance Sheet 2. Consolidated Comprehensive Income Statement 3. Consolidated Statement of Changes in Equity 4. Consolidated Statement of Cash Flows 5. Notes and other statements 6. Statement of Restatement Analysis 1.2 Meaning of Control Control: is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Criteria in deciding control over another entity are: i. Majority voting power (more than half of t...