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ABSTRACT
All major economies have established time lines to converge with or adopt IFRSs in the near future. The international convergence efforts of the organisation are also supported by the Group of 20 Leaders (G20) who, at their September 2009 meeting in Pittsburgh, US, called on international accounting bodies to redouble their efforts to achieve this objective within the context of their independent standard-setting process. In particular, they asked the IASB and the US FASB to complete their convergence project by June 2011. Adopting a single global accounting language will ensure relevance, completeness, understandability, reliability, timeliness, neutrality, verifiability, consistency, comparability and transparency of financial statements and these bring about a qualitative change in the accounting information reports which will strengthen the confidence and empower investors and other users of accounting information around the world. It will also help acquirers to assess the actual worth of the target companies in cross border deals and thereby furthering the economic growth and business expansion globally. For a decade the companies in India have been using both - US GAAPs and more recently International Financial Reporting Standards (IFRS) to raise funds from US and European Markets. The Institute of Chartered Accountants of India has announced that it will align existing accounting standards with IFRS w.e.f. April 1, 2011 to join the group of 100 countries reporting under IFRS.
Key Words: Reporting, Standards, Convergence, Corporate, Liberalization
JEL Classification: M44, M47, M41
Introduction:
Globalization and liberalization of economic policies initiated by the Government since 1991 have brought about significant changes in the attitudes and perceptions of investors, management financial institutions, financial and stock markets, Bankers and the corporate world as a whole. The explosion of knowledge in the field of information technology has made the world a global village. For corporates the whole world is a market with global customers and global investors. With Global capital markets companies are getting listed at several stock-exchanges located in different countries, the decision regarding investments in companies of other countries requires an understanding, analysis and interpretation of financial statements of these companies which are primarily based on the accounting concepts conventions and practices of that country. Hence, the difference in accounting practices and reporting requirements make the financial statements and reports ambiguous...