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« Has India Abandoned IFRS? | Main | "Convergence Flaws" v. Convergence Spin »

March 14, 2011

Comments

Dr. Santanu K. Ganguli

What is being demonestrated through this article is typical US mindset - we are great ! Our accounting practice is the best (despite Enron and Worldcom !!). All must follow us ! Just because there is some delay in implementing IFRS in India, it does not mean that the mission and need of one universally accepted accounting practice has vanished and lost relevance ! India is committed to follow IFRS. The most of the current Indian accounting standards are already IFRS complient (some of which are mere replica), India can afford little delay to remove the legislative bottleneck to become fully IFRS complient. If one is interested in knowing how much IFRS complient India is, one can refer to the website of the Instituteof Chartered Accountants of India (ICAI). Similarly by bowsing the said website one can come to know how seriously the steering committe established for the purpose (paving the way of convergence) is working to remove the bottleneck to become fully IFRS complient.

KPO'M

Dr. Ganguli, I think you are missing the point. It isn't that the US standards are necessarily the best (and Tom's critical about a LOT of US accounting standards). It's that IFRS may not be the best for everyone, and it may not be possible to design a system that works for everyone.

4 significant deviations from IFRS, and an unclear timeline on adoption of the others seems to be a pretty clear indication that India is not yet ready to comply fully with IFRS. Maybe they will be in a year, but who's to say there won't be a future standard that is carved out, just as there was in Europe? The fact that it is a convergence strategy (rather than an adoption strategy) also provides India a future "out" if that's what they decide.


http://online.wsj.com/article/SB10001424052748704662604576201821400585238.html

China is another country that is only "converging" with IFRS. So what looks like will happen is that we'll have EU GAAP (nearly 100% IFRS), Indian GAAP, Chinese GAAP, and US GAAP (all between 85-95% "converged" with IFRS), and possibly Japanese GAAP also "converged". No matter how you slice and dice it, we won't have a "single set of high quality standards."

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