1. An Introduction International Financial Reporting Standards (IFRS) Amit Gilra

6. From IAS to IFRS International Accounting Standards Committee (IASC ) 1973 2000 International Accounting Standards Board (IASB ) 2001 Future International Accounting Standards (IAS) International Financial Reporting Standards (IFRSs) IFRS IAS IFRS IFRIC SIC

7. List of IAS/IFRS IAS NO TITLE CORRESPONDING AS 1 Presentation of Financial Statements 1 2 Inventories 2 7 Cash Flow Statements 3 8 Net Profit or Loss for the period, Fundamental Errors and Change in Accounting Policies 5 10 Events after the Balance Sheet date 4 11 Construction Contracts 7 12 Income taxes 22 14 Segmental Reporting 17 15 Information reflecting the effect of changing prices - 16 Property, Plant and Equipment 6 & 10 17 Leases 19 18 Revenue 9 19 Employees Benefits 15 20 Accounting for Govt Grants and Disclosure of Government Assistance 12 21 The effects of changes in the foreign exchange rates 11 22 Business Combination 14

8. IAS NO TITLE CORRESPONDING AS 23 Borrowing Costs 16 24 Related Party Disclosures 18 26 Accounting and Reporting by Retirement Benefits Plan - 27 Consolidated Financial Statements and Accounting for Investments in Subsidiaries 21 28 Accounting for Investments in Associates 23 29 Financial Report in Hyper Inflationary Economics - 30 Disclosure in the financial statements of the Banks and similar Financial Institutions - 31 Financial Reporting of Interest in Joint Ventures 27 33 Earning per Share 20 35 Discontinuing Operations 25 36 Impairment Assets 28 37 Provisions, Contingent liabilities and Contingent assets 29 38 Intangible Assets 26 39 Financial Instruments : Recognition and Measurement 30 & 31 40 Investment Property - 41 Agriculture - IFRS 1 First Time Adoption of IFRS - IFRS 2 Share Based Payment - IFRS 3 Business Combinations 14 IFRS 4 Insurance Contracts - IFRS 5 Non current assets held for sale and discontinued operations - IFRS 6 Exploration for and Evaluation of Mineral Resources - IFRS 7 Financial Instruments : Disclosures 31 IFRS 8 Opening Segments -

14. Key Differences IFRS Vs Indian GAAP

16. INVENTORY Valuation of Inventories (AS 2) Vs Inventories (IAS 2)

17. Key Differences - Inventory Particulars IFRS Indian GAAP US GAAP Scope IAS 2 includes provisions relating to the work in progress of a service provider AS 2 excludes work in progress arising in the normal course of business of service provider. Hence there is no guidance for the same. Similar to Indain GAAP IAS 2 does not apply to inventories held by commodity traders There is no scope exemption in AS 2 for any inventory held by commodity traders Similar to Indain GAAP

18. Key Differences - Inventory Particulars IFRS Indian GAAP US GAAP Inventory Valuation Inventories are carried at the lower of cost or net realizable value Inventories are carried at the lower of cost or net realizable value Lower of cost or market subject to upper/lower limit of NRV Frequency of Assessment of NRV A new assessment of Net Realizable Value is required to be made in each Reporting period No specific guidance in AS 2. Write Down Reversal is required for a subsequent increase in value of inventory previously write down Reversal is required for a subsequent increase in value of inventory previously write down Reversal of write down of inventory is not permitted

21. EVENTS AFTER THE BALANCE SHEET DATE Contingencies and Events occurring after the balance sheet date (AS 4) Vs Events after Reporting Period (IAS 10)

22. Key Differences – Events after Balance Sheet Date Particulars IFRS Indian GAAP US GAAP Proposed Dividend An Entity should not recognize the proposed dividends as a liability at the balance sheet date. Companies are required to make provision for proposed dividend , even though they are proposed after the balance sheet date Similar to IFRS Date of authorization Date of authorization for issue of financial statements and the authorizing authority should be specifically mentioned in financial statements itself No such requirements in AS 4 Similar to IFRS Disclosure of Non Adjusting events Material Non Adjusting Events are required to be disclosed in the financial statements Non adjusting events are required to be disclosed in the report of approving authority

23. PRIOR YEAR ITEMS Net P & L for the period, Prior Period items and change in Accounting Policies (AS 5) Vs Accounting policies, Changes in Accounting Estimates and Errors (IAS 8)

24. Key Differences – Prior Period Items, Change in Accounting Policies Particulars IFRS Indian GAAP US GAAP Definition Prior Period Errors Broad definition of Prior Period items. It includes all the items in the financial statements AS 5 covers only Income and Expenses in the definition of prior period items Prior Period Errors Prior Period errors are to be corrected retrospectively and restate the opening balances of assets, liability and equity Reported as a prior period adjustment in current year results . Comparatives are not required to restate. Similar to IFRS Extraordinary Item It prohibits disclosure of any items as Extraordinary Items Separate disclosure is required as per AS 5 Impending Changes It requires disclosure of any impending change in accounting policy It does not require such disclosure Similar to IFRS

25. Key Differences – Prior Period Items, Change in Accounting Policies Particulars IFRS Indian GAAP US GAAP Absence of standard or interpretation It provides specific guidance on the selection of accounting policies where there is no IFRS or interpretation that specifically applies to a transaction. No specific guidance under AS 5

26. FIXED ASSETS Accounting for Fixed Assets (AS 10) Vs Properly, Plant and Equipment (IAS 16)

29. Key Differences – Fixed Assets Particulars IFRS Indian GAAP US GAAP Depreciation Method A variety of depreciation methods can be used to allocate the depreciable amount on systematic basis over its useful life Can be followed either SLM or WDV Similar to IFRS Change in Depreciation Method Changes in the depreciation method are considered as change in accounting Estimate Prospective effect in current period Changes in the depreciation method are considered as change in accounting Policies and effects to be quantified and disclosed Retrospective effect in computation of depreciation Similar to IFRS Review of Useful Life and Residual Value Re assessment of useful life and residual value is required at least at each financial year end AS 10 does not specify any such requirement Similar to IFRS

30. Key Differences – Fixed Assets Particulars IFRS Indian GAAP US GAAP Subsequent Costs Cost of replacement is to be capitalized The carrying amounts of those parts that are replaced is to be derecognized Replacement cost is Expensed No requirement for decapitalizing the carrying amount of replaced items Similar to IFRS Major inspection cost and overhaul expenditure The cost of major inspection and overhaul expenses are to be capitalized The expenditure that increases the benefit over previously assessed capacity is capitalized. The inspection cost and overhaul expenses are expensed Similar to IFRS Purchase under Deferred Settlement Terms The cost of an item of PPE is the cash price equivalent at the recognition date. If payment is deferred beyond normal credit terms, the difference between the cash price equivalent and the total payment is recognized as interest over the period of credit. No specific guideline under AS 2 with respect to fixed asset acquisition under deferred settlement scheme

31. Key Differences – Fixed Assets Particulars IFRS Indian GAAP US GAAP Revaluation If an entity adopts the revaluation model, re valuation is required to be made with regular period to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period No specific requirement on frequency of revaluation Similar to IFRS Group Revaluation If an item of PPE is revalued, then the entire class of PPE to which that asset belongs to be revalued. Revaluation Approach is ad hoc in nature . Similar to IFRS Depreciation on revaluation Depreciation on revalued portion cannot be recouped out of revaluation reserve Depreciation on revalued portion can be recouped out of revaluation reserve

32. Key Differences – Fixed Assets Particulars IFRS Indian GAAP US GAAP Compensation Compensation received from third parties against loss of items of PPE are to be included in Profit & Loss when the compensation becomes receivable No specific requirement.

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