All India Chain Workshop on Indian Accounting Standards Converged with IFRS

Difference between IFRS and Indian GAAP

CA Bhupendra Mantri, Jaipur (India)FCA, DISA(ICAI)+919829888810

bmantri@kalanico.com

1

Differences between

• Existing Indian AS and IFRS• Existing Indian AS and Converged Ind. AS• Converged Ind. AS and IFRS

Classification of IFRSs

• Financial Statements Presentation• Revenue Recognition• Recognition, Measurement, Presentation and Disclosure of

Assets• Recognition, Measurement, Presentation and Disclosure of

Liabilities• Business Combination and Consolidated Financial Statements• Financial Instruments• Disclosure Standards• Industry Based Standards• Others

Financial Statements

• IAS 1: Presentation of Financial Statement• IAS 7: Statement of Cash Flows• IAS 8: Accounting Policies, Change in Accounting Estimates

and Errors• IAS 10: Events after Reporting Period• IAS 33: Earning Per Share• IAS 34: Interim Financial Reporting

Revenue Recognition

• IAS 11: Construction Contracts• IAS 18: Revenue

Recognition, Measurement and Disclosure of Assets

• IAS 2: Inventories• IAS 16: Property, Plant and Equipment• IAS 17: Leases• IAS 20: Accounting for Government Grants and Disclosure of

Government Assistance• IAS 23: Borrowing Costs• IAS 36: Impairment of Assets• IAS 38: Intangible Assets• IAS 40: Investment Property• IFRS 5: Non current Assets held for sale and discontinued operations

Recognition, Measurement and Disclosure of Liabilities

• IAS 12: Income Taxes• IAS 19: Employee Benefits• IAS 37: Provisions, Contingent Liabilities and Contingent

Assets• IFRS 2: Share Based Payment

Business Combination and Consolidated Financial Statements

• IFRS 3: Business Combination• IAS 27: Consolidated Financial Statements• IAS 28: Investment in Associates• IAS 31: Interest in Joint Ventures

Financial Instruments

• IAS 32: Financial Instruments – Presentation• IAS 39: Financial Instruments – Recognition and

Measurement• IFRS 7: Financial Instruments – Disclosure• IFRS 9: Financial Instruments – Recognition and

Measurement

Disclosure Standards

• IAS 24: Related Party Disclosure• IFRS 8: Operating Segments

Industry Based Standards

• IAS 26: Accounting and Reporting by Retirement Benefit Plans

• IAS 41: Agriculture• IFRS 4: Insurance Contracts• IFRS 6: Exploration for and Evaluation of Mineral

Resources

Others

• IFRS 1: First Time Adoption of International Financial Reporting Standards

• IAS 29: Financial Reporting in Hyperinflationary Economies• IAS 21: The Effect of changes in Foreign Exchange Rates

First time adoption of IFRS (IFRS 1)

• No corresponding standard under existing IGAAP• Converged Ind. AS – 41• Amendments arising from IFRS 9 (Ind. AS 40)• Transition date choice• Elimination of effective dates prior to transition date• Deletion of certain exemption not relevant for India• Inclusion / modification of existing exemption to make it

relevant for India• Use of different terminology

Presentation of Financial Statements (IAS 1)

Points of Differences:• Component of Financial Statements• Disclosure of Critical Judgment and capital disclosure• Formats of Statement of Financial Position and Statement

of Comprehensive Income• Extraordinary Items• Statements of Comprehensive Income (SCI)• Statement of Changes in Equity (SOCIE)

Statement of Cash Flow (IAS 7)

Points of Differences• Cash and cash equivalents• Formats and content of cash flow statement• Cash flow associated with extraordinary items• Disclosure of interest paid and received• Disclosure of dividend paid• Disclosure of dividend received• Consolidated cash flow statement

Accounting policies, changes in accounting estimates and errors (IAS 8)

Points of Differences:• Change in accounting policies• Prior Period items• Definition of prior period items• Change in accounting estimate• Absence of standard or Interpretation that specifically

applies to a transition

Events after reporting period (IAS 10)

Points of Differences:• Adjusting and non-adjusting events• Authorization date for issue of financial statements• Proposed dividend

Investment Property (IAS 40)

Points of Differences:• Definition

IAS 40: Investment property is property (land or a building, or part of a building or both) held (by the owner or by the lessee under a finance lease) to earn rentals or for capital appreciation or both, rather than for use in the production or supply of goods or services, for administrative purposes, or for sale in the ordinary course of business.

AS 13: An investment property is an investment in land or buildings that are not intended to be occupied substantially for use by, or in the operations of, the investing entity.

Investment Property (IAS 40)

Points of Differences• Measurement• Frequency / basis of revaluations• Transfer to / from investment property• Disposals

Inventory (IAS 2)

• Cost formulae• Inventories acquired on deferred settlement terms• Inventories of a service provider

Non Current Asset held for sale and discontinued operations (IFRS 5)

• Requirement for classification, measurement and presentation of NCA HFS and classification and presentation of discontinued operations

• Period of disposal for non-current assets held for sale• Measurement principles

Accounting for Government Grants and Disclosure of Government Assistance (IAS 20)

• Grants in the form of non-monetary assets - measurement• Grants in the nature of promoter’s contribution• Refundable grants – Treatment of depreciation• Government loan at below market rate• Disclosure

Leases (IAS 17)

• Initial direct costs• Incentive on operating leases received by lessess• Lease of land• Determination whether an arrangement contains lease (IFRIC

4)

Provisions, Contingent Liabilities and Contingent Assets (IAS 37)

• Applicability to financial instruments• Measurement• Present Value• Restructuring provision• Onerous contracts• Contingent assets

Share Based Payment (IFRS 2)

• Scope• Measurement

Operating Segments (IFRS 8)

• Operating Segment• Reportable Segment• Accounting Policies / Bases of preparation• Disclosure• Restatement

MANY THANKS