{"id":215,"date":"2018-10-11T08:37:08","date_gmt":"2018-10-11T08:37:08","guid":{"rendered":"http:\/\/mgmtp02.epgpbooks.inflibnet.ac.in\/?post_type=chapter&p=215"},"modified":"2019-01-03T11:35:52","modified_gmt":"2019-01-03T11:35:52","slug":"international-financial-reporting-standards-iii","status":"publish","type":"chapter","link":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp02\/chapter\/international-financial-reporting-standards-iii\/","title":{"rendered":"International Financial Reporting standards-III"},"content":{"raw":"
\"epgp<\/a>\r\n<\/span><\/div>\r\n
\r\n\r\n \r\n\r\n \r\n\r\nLEARNING OBJECTIVES:<\/strong>\r\n

This\u00a0 module\u00a0 helps\u00a0 to\u00a0 understand\u00a0 the\u00a0 concept\u00a0 of\u00a0 global\u00a0 convergence\u00a0 of\u00a0 accounting standards. After studying this module the students may able to understand need and importance of Convergence with IFRSs. They will also able to explain Convergence Process of IFRS in India. Further, Students after going through this module will be able to explain the challenges to be faced for IFRS implementation in India.<\/p>\r\n \r\n\r\nINTRODUCTION<\/strong>\r\n\r\n \r\n

Convergence of Accounting Standards is related with developing a globally accepted common language of accounting. The process of globalization and increased cross-border investing are the important factors that have generated the need for the development and adoption of a single set of high-quality universal accounting standards. In India, the process\u00a0 of\u00a0 convergence\u00a0 with\u00a0 IFRS\u00a0 is\u00a0 carried\u00a0 by\u00a0 MCA.\u00a0 The\u00a0 Institute\u00a0 of\u00a0 Chartered\u00a0Accountants of India (ICAI), has formulated Indian Accounting Standards (Ind ASs) converged with IFRS which are in line with corresponding IAS\/IFRS, adoptable under the conditions prevailing in the country.<\/span><\/p>\r\n\r\n<\/div>\r\n

\r\n\r\n \r\n\r\nGLOBAL CONVERGENCE OF ACCOUNTING STANDARDS<\/strong>\r\n\r\n \r\n

Global convergence of accounting standards is important issue. For getting best solution of this issue the standard-setters around the world discuss accounting issues and combine their experiences. Simply Convergence of Accounting Standards is a step towards developing a globally accepted common language of accounting to communicate financial information of an entity. Globally accepted financial reporting system ensures that financial transactions are recorded and presented in similar way all over word. Due to the process of globalization and increased cross-border investing are the important factors that have generated the need for the development and adoption of a single set of high-quality universal accounting standards. Many countries are now actively involved in promoting measures for achieving convergence among national accounting standards. The most important organisation in related with this is International Accounting Standards Board (IASB). The IASB has developed a comprehensive set of accounting standards. It has made attempt to cover all core issues in financial reporting. These standards are now being used extensively all over the world. Presently, a number of countries have adopted these standards. Further, in many countries, IASB standards are providing the basis for formulation of domestic national accounting standards.<\/p>\r\n \r\n\r\nTHE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA AND NATIONAL ACCOUNTING STANDARDS<\/strong>\r\n\r\n \r\n

The Institute of Chartered Accountants of India is premier accounting body in India. With the purpose to bring uniformity in preparation and presentation of accounting results, the Institute of Chartered Accountants of India constituted in 1977 an Accounting Standards Board (ASB). The main function of the ASB is<\/p>\r\n \r\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 To formulate accounting standards.<\/p>\r\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 While formulating the accounting standards, the Accounting Standards Board give due consideration to the International Accounting Standards.<\/p>\r\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 It also keeps into consideration the applicable laws, customs, usages and the business environments prevailing in India.<\/p>\r\n\r\n<\/div>\r\n

\r\n

\u00b7\u00a0 \u00a0 \u00a0 \u00a0 To ensure uniform adoption of International Accounting Standards in the country. The Institute of Chartered Accountants of India formulated 32 Accounting Standards a list of which is given below:<\/p>\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 1 Disclosure of Accounting Policies\r\n\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 2 Valuation of Inventories\r\n\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 3 Cash Flow Statements\r\n\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 4 Contingencies & Events occurring after the Balance Sheet Date\r\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 5 Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies<\/p>\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 6 Depreciation Accounting\r\n\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 7 Construction Contracts\r\n\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 8 Accounting for Research & Development\r\n\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 9 Revenue Recognition\r\n\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 10 Accounting for Fixed Assets\r\n\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 11 The Effects of Changes in Foreign Exchange Rates\r\n\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 12 Accounting for Government Grants\r\n\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 13 Accounting for Investments\r\n\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 14 Accounting for Amalgamation\r\n\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 15 Employee Benefits (Revised 2005)\r\n\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS16 Borrowing Costs\r\n\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 17 Segment Reporting\r\n\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 18 Related Party Disclosures\r\n\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 19 Leases\r\n\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS2O Earnings Per Share\r\n\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 21 Consolidated Financial Statements*\r\n\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 22 Accounting for Taxes on Income\r\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 23 Accounting for Investments in Associates in Consolidated Financial Statements*<\/p>\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 24 Discounting Operations\r\n\r\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 AS 25 Interim Financial Reporting\r\n\r\n<\/div>\r\n \r\n