IFRS Implementation in India-Revisiting Fundamentals
In IFRS convergence Journey, companies will have to deal with changes in lot of fundamental definition which will be different from current one.
To name a few like definition of subsidiary company, valuation of inventory on LIFO or revenue accounting based on net present value (in mention example either the concept or definition will change from existing one) . To elaborate further on subsidiary company, “Control” (to define subsidiary company for consolidated financial statements) under Indian GAAP is obtained by an entity on acquisition of more than one-half of the voting rights or by control of composition of Board of Directors. However under IFRS, control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Hence organization need to look into this new definition and includes subsidiary companies as applicable when presenting financials statement after April 2011. Similarly difference will be there in other areas. In short companies should start looking at different aspects and plan for proper implementation of IFRS
