Corporate India Struggles With IFRS Adoption

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					                                                                                                                     Global Compliance




Corporate India Struggles With IFRS Adoption
By Richard Meyer                               was cool to the idea when she took of-          ment for this article.)
                                               fice in January. Lately the discussion has

W      hen India announced in 2007 that it
       would fully adopt International Fi-
nancial Reporting Standards by 2011, no-
                                               warmed up again, after several notable
                                               speeches from SEC officials and the G-20
                                               meeting in Pittsburgh, where world lead-
                                                                                               Finding Compromises

                                                                                               S   ome say IFRS accounting for acquisi-
                                                                                                   tions or the accounting of foreign ex-
body doubted it would. Two years later,        ers again called for a single set of global     change transactions may be adjusted to
nobody is quite so sure.                                                                       reflect the local circumstances in India.
   “Whether all organizations in India                                                         Others speculate that the asterisks will be
adopt IFRS by 2011, we will have to wait                                                       related to complex industries like bank-
and watch,” says Manish Dugar, CFO of                                                          ing and insurance.
Wipro Technologies. “My estimate would            “Whether all organizations in                    The lack of information has left Cor-
be that it would not be possible.”                                                             porate India in a bind. Many would like
   What happened? Plenty. Foremost,               India adopt IFRS by 2011, we                 to get started on the process but can’t,
scrapping a national accounting system in          will have to wait and watch.                because they don’t know what they need
favor of IFRS is a formidable task for any                                                     to do.
nation—and India, like many developing
                                                  My estimate would be that it                     “It is a bit chicken and egg,” Krishna-
nations, suffers a lack of skilled labor to             would not be possible.”                murti says. “You look at the organiza-
help make the transition.                                                                      tions that need to take serious steps to-
   Others say Corporate India hasn’t                                —Manish Dugar,             ward conversion and haven’t yet, because
really embraced the idea. After going                                           CFO,           they don’t know for sure what the ground
through a spasm of change to comply with                           Wipro Technologies          rules are.”
the Sarbanes-Oxley regime in the middle                                                            Jamil Khatri, a partner at KPMG In-
of the 2000s, only to see compliance bur-                                                      dia, says, “There have been concerns on
dens ease in later years (a phenomenon                                                         adherence to the 2011 timelines largely
many U.S. executives can understand),          accounting rules.                               due to the lack of regulatory progress
some Indian corporations aren’t eager to           Still, the real problem in India lies not   to achieve convergence.” Many corpora-
commit precious resources to implement         so much with corporations as with those         tions have pondered an IFRS conversion
something that could become less severe        who have been pushing for IFRS in the           project, he adds, but won’t commit to it
over time.                                     first place: the regulators, the standards      “in the absence of regulatory clarity on
   Added to that is the simple fact that       bodies, and the government. With less           how IFRS convergence will be actually
Indian Generally Accepted Account-             than 18 months to go before the April 1,        implemented.”
ing Principles are considered to be quite      2011, adoption deadline, nobody has said            At least some companies, however,
good, with a solid 
				
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