New accounting norms to impact financial statement reporting: ICAI

With the implementation of the international reporting standards, sectors including infrastructure and financial services may be impacted while those related to manufacturing will not see much adverse impact, according to the institute of chartered accountants of India (ICAI).

The newly elected president of the ICAI, Manoj Fadnis, told reporters that as companies brace to adopt the international financial reporting standards (IFRS) from next financial year, among others financial sector will be impacted due to the fair-value reporting required in the new accounting system.

“There will be some impact (on the financial statements) as higher levels of disclosures will be required and for the first time there will be more ‘fair value’ accounting. It will have a well defined standard in place for financial instruments which would be made applicable.

So there will be some changes in which financial statements are reported,” he said.

The government has notified the new Indian accounting standards (Ind AS), which have been converged with the IFRS. The new standards are voluntary from April 1 this year while companies having networth of Rs 500 crore or more, would have to mandatorily comply with it from the next financial year.

The rules for these AS would come into force from April 1, 2015. Banking, insurance and non-banking finance companies are exempted from the roadmap that has been released by the government. (Indian Express)