Monday, September 22, 2008

Accounting and financial reporting are like scorekeeping

Chennai: All of a sudden, conferences and seminars on IFRS (the International Financial Reporting Standards) are the in-thing, where you can find accounting professionals busy taking notes and asking questions, so that they are ready for the 2011 deadline when India will be converging with IFRS.

But why should we be focussing on the IFRS now? When posed that query, Dr Kamal Gupta, former Technical Director of the Institute of Chartered Accountants of India (ICAI), asks in response, "Can India be isolated, if more than 100 countries already adopt IFRS, and more than 150 will adopt it by 2011?"

Even in the US, with a prime GAAP, something epoch-making has happened - subject to certain conditions, the domestic US companies will be moving towards IFRS, he adds. "If the US does it, the UK does it, Brazil, China, Russia… how can India be left."

Most of our companies have global kind of links, be it for exports, imports, shareholding, and so on, reminds Dr Gupta during an evening interaction with Business Line recently. "Therefore, we must do our accounting in a manner that the world understands. So I think more than ever, there is a need for it. The Institute, the Government, the industry recognise it."

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