Chillin' out till it needs to be funded
I am beginning to like The Firm on Moneycontrol and CNBC TV18. The Saturday brunch program is perfectly suited to host the audit accounting and legal Champions from KPMG, E&Y and Amarchand Mangaldas Shroff. They presented a very incisive discussion on Private company valuations for PE investments and other FDI policy issues in May. In June I particularly liked the clarity and conciseness of KPMG partner, Jamil Khatri. I am also eligible for the Quaker oats downloadable product for a health check and the P&G consumer rollout though my child is older and Pampers is not what I need to buy. I will thus stay with matters in high finance for they made the weekend especially interesting.
We have already covered a lot of DTC on INDIA.ADVANTAGES.US and this post is strictly related to interesting turns for Indian companies in IFRS implementation. The April 11 rollout of IFRS Financial statements in India is restricted to companies with a turnover of In neighboring Malaysia for example FRS139 ( valuation of financial instruments) is already applicable from this year and full blown IFRS from FY12 financial statements. In Chile a very similar calendar was rolled out starting 2010 and similar dissections of companies by size have been made to obviate discussion on each national standard in other than the required jurisdictions or forums.
In Europe and the UK, implementation issues are being handled since 2005. Globally a complete IFRS implementation will be de rigeur by 2014 for companies of all size and ownership structures. Global corporations have found IFRS especially useful in obliterating discussions of local accounting glitches and ‘best practices’ and found it cost effective to move to full blown IFRS. Many emerging markets would share Indian experts’ circumspection with implementing the new standards without benefitting on Corporate Income tax treatments, usually a foregone conclusion. In many cases, though no restatement of prior periods is being called, the statements would need to be presented under the new standards for up to 5 years to allow for meaningful comparisons. The stepped roll out also causes a piquant situation in approaching CBDT for one time differences in treatment between those using IFRS and those employing older standards till required to migrate to the new IFRS.
IFRS is especially complex for banking finance and insurance companies and they would benefit most from the new dispensation.
The issues with IFRS manly relate to tax treatment for India corporations across three parameters:
The issue is a non issue once firms agree to maintain two books for investor reporting and tax considerations which is the case in most Western Europe and US dispensations where IFRS is already implemented. All global banks and MNCs from Germany, Swiss, Dutch or US already follow the new IFRS standards globally.