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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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