IFRS refers to the accounting policies and standards that every nation follows. The monetary situation all over the world has seen a drastic change in a recent couple of years. Currently, few transitional organizations are working in several countries to solve the situations related to IFRS convergence. Hence, there is a need to maintain the standard which can also be accepted worldwide widely. It also refers to the aim of establishing a particular set of standards that can be used by everyone nationally and internationally.
Difference Between IFRS and Indian Accounting Standards
Various points distinguish Indian accounting standards and the IFRS. Thus, Indian accounting standard vs international accounting standard can be formulated in the following way:
Issuing Body: The Indian Accounting standards are issued by the Institute of Chartered Accountants of India (ICAI). On the other hand, the International Financial Standards (IFRS) is issued by the International Accounting Standards Board (IASB) which is based in London.
Constitution: The ICAI established an effective accounting standard board in the year 1977 on 21st April after recognizing that there is a need to maintain the accounting practices and policies and the IFRS convergence status. On the other side, the International Accounting Standards Board (IASB) which is based in London had begun its operation in the year 2001.
Representation: The Indian Accounting Standards are referred to as Indian GAAP or represented in the order of AS- (). International Financial Reporting Standards are also represented as the IFRS/IAS- ().
Thus, a broad differentiation of Indian accounting standards and IFRS is given in the above context.
IFRS Full Form in India
IFRS stands for the International Financial Reporting Standards. The term is developed by the International Accounting Standards Board (IASB). The accounting standards of India are based on the substantially converged standards that are issued by the board.
Elaborate the Process of Issuing IFRS
IFRS standard settings are done through
Public meetings are held in the office in London.
Agenda papers informing the Board.
Decisions and discussions are then made public after the meeting is held.
Comment letters are received on the consultation documents.
Difference Between Convergence And Adoption
IFRS is applied in more than 100 countries worldwide which include countries like Hong Kong, South Africa, Australia, Singapore, the European Union, and others. But there still prevails confusion over the difference between convergence and adoption. However, many countries use them interchangeably.
Adopting IFRS means that the particular country would implement it as same as the IASB and that they would follow the guidelines that are issued by the IASB.
On the other hand, convergence with IFSR refers to the situation where both ASB and IFRS would work together by developing compatibility.
It is said that the increase in the number of convergences will make adoption less costly and easier.
Challenges of Convergence with IFRS
There are a lot of challenges that are faced and they are:
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