India to Adopt IFRS for Large Companies in 2011

IFRS is likely to be rolled out for large companies in India from April 1, 2011.

A core group on IFRS implementation, set up by the ministry of company affairs and headed by renowned chartered accountant Y H Malegam, is set to recommend that it be made mandatory only for big corporates in the first phase.

The panel has prepared a report recommending IFRS-based reporting only for the largest 80 companies in India.

These companies may have to prepare their financial statements under IFRS for financial year 2011-2012.

In the second phase starting 2013-14, all listed companies and companies with net worth greater than a certain threshold will convert.

As per the IFRS convergence road map prepared by the Institute of Chartered Accountants of India (ICAI), all listed companies were to adopt IFRS in 2011.

Some core group members, who spoke to Bloomberg-UTV on the condition of anonymity, said both companies and a vast majority of chartered accountants are not adequately trained to implement IFRS on such a large scale.

The group is keen to avoid the chaos that IFRS implementation created in Europe a few years ago.