IFRS AND Ind.

AS
• IFRS Meaning
• IFRS or International Financial Reporting Standards
refers to a globally-accepted set of accounting and
financial reporting guidelines for preparing and
presenting financial statements. It ensures uniformity
in accounting practice that makes financial records
comparable across different reporting entities
worldwide. Over the years, it has emerged as the new
world standard in accounting.
• It was first published in the year 2003. It was
designed by the International Accounting
Standards Board (IASB) and is adopted by
more than 144 jurisdictions and countries
worldwide, including the European Union. The
U.S. government, however, uses the U.S.
Generally Accepted Accounting Principles
(GAAP) system of accounting rules. Before
IFRS, the International Accounting Standards
(IAS) were in regulation.
 Objectives of IFRS

International Financial Reporting Standards represents an international

financial reporting system and serves multiple purposes. Some of its
significant goals in the financial world are as follows:
• #1- Create a Common Law
• One of its key objectives is to ensure that common law is introduced
and adopted by as many jurisdictions and countries as possible to
bring everyone on the same page. It ensures that everyone follows
the same guidelines and adopts a universal way of reporting business
activities.
• #2 – Aid analysis
• It helps stakeholders in analyzing a company’s performance and
interpreting its financial position. For example, corporations and
governments use these standards to make credible financial
statements. It aids in categorizing and reporting financial data with
accuracy and consistency. Such financial records promote better
comprehension and help decision-making.
• #3 – Assist in preparation of reliable financial records
• By following International Financial Reporting Standards, the
data presented in the books of accounts are likely to be
accurate, reliable, uniform, and appropriate within the bounds
of its rules. The high quality of financial records assists
investors in making informed economic decisions.
• #4 – Ensure comparability, transparency, and flexibility in
reporting
• The consistency in reporting accounting practices enables easy
comparison of the financial records of compliant companies
across nations. Such comparisons allow investors to identify
risks and opportunities before investing. As a result, it
promotes foreign trade and investment.
• Also, it requires full disclosure of all relevant information to its
stakeholders. However, being principle-based, the rules are not
very rigid and allow companies to adapt to them in their own
way.
 Importance of IFRS

• It is treated as an international accounting standard and holds great

importance for many countries and the world economy. Here is its
significance:
• #1 – Transparency
• It encourages transparency and accountability of financial statements
prepared by companies, small firms, and government agencies. As a
result, it minimizes the margin of error and manipulation of any
holdings and irregularities of funds, transactions, and balances. Besides,
it also motivates consistency and clarity of work.
• #2 – Uniformity and Comprehensive
• The International Financial Reporting Standards are developed to set
uniformity in the presentation and understandability of statements.
When everyone follows and recognizes the standards, it becomes easy
for companies and agencies to follow a common law that helps world
economies compare their growth comprehensively. Also, it is easy to
read for everyone.
• #3 – Security and Flow
• It helps track the flow of transactions, records funds
information, and works towards attaining a security
level for direct and indirect foreign investments across
nations. This accounting standard is essential when we
are dealing with significant assets or getting into heavy
transactions.
• #4 – Accountability
• It strengthens accountability by bridging the gap of
incompetent financial reporting. If not complied with it,
the companies may face penalties. For example, last
year, the Johannesburg Stock Exchange fined a sugar
firm Tongaat Hulett Ltd. Its financial statements,
account reports, and other information details did not
comply with IFRS and were incorrect.
 International Financial Reporting
Standards
• IFRS 1 First-time Adoption of International Financial Reporting
Standards
• IFRS 2 Share-based Payment
• IFRS 3 Business Combinations
• IFRS 4 Insurance Contracts
• IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
• IFRS 6 Exploration for and Evaluation of Mineral Assets
• IFRS 7 Financial Instruments: Disclosures
• IFRS 8 Operating Segments
• IFRS 9 Financial Instruments
• IFRS 10 Consolidated Financial Statements
• IFRS 11 Joint Arrangements
• IFRS 12 Disclosure of Interests in Other Entities
• IFRS 13 Fair Value Measurement
Overview of Indian Accounting
Standards
• Accounting is known as the art of recording the exchanges in
a manner to assist the perusers with showing up at the
decisions or reaching a financial decision about the entity.
This becomes fundamental that it ought to be joined into
some normalized rules which are for the most part known to
account for approaches.

• Indian Accounting Standard is the Accounting standard taken

on by organizations in India and given under the oversight of
the Accounting Standards Board which was composed as a
body in the year 1977.

• The concocting of these strategies permits different

organizations to adjust their accounting standards to repair
for their own benefit. Standards are acquainted with
quenching all disarrays, and these should have been set by
the perceived accounting bodies. This idea repaired the way
for the development of Accounting Standards. The Accounting
Standards in India are given by the Institute of Chartered
Accountants of India (ICAI).
 Objectives of the Indian Accounting
System
• There are many objectives of an Indian Accounting system.
We will discuss each and every point under IAS and
understand its importance.
• This way, the global scope of Indian companies is expanded
and they have a wider
• platform to perform on.
• This way the Indian companies can imply their rates and
demands according to the global rates.
• This way the company accounts and the annual financial
statements are transparent.
• It is easy and can be understood by companies worldwide.
• It lets us have a single framework for a single accounting
framework.
 Indian Accounting System: Benefits

• As we already know that without benefits, nobody will

try to pursue an accounting system like this. There are
many benefits gained while following the Indian
Accounting System, let us discuss all of them in detail.
• International Base - This lets the business have an
international base and platform for companies to
perform.
• Harmonization - This lets the companies harmonize
their rules.
• Compliance - Increase compliance in companies.
• Global Acceptance - Globally reaches other companies
and benefits them. This also gives global or international
recognition.
Indian Accounting Standards List