The government will stick to its April 1 deadline for 300 large companies to align their accounts with global financial reporting norms, despite concerns raised by an industry lobby. “India will have to honour the commitment made at the G20 summit,” said an official with the corporate affairs ministry. “We have received a lot of comments and are in the process of issuing clarifications on all aspects including taxability,” said the official who asked not to be named.
Industry body FICCI wrote to the ministry in December-end , asking it to postpone the rollout of global norms. “There is ambiguity on several fronts. Corporates at large are not prepared to meet the deadline,” said a FICCI official, refusing to name any company opposing the deadline. The FICCI representation has also been forwarded to the revenue secretary.
Last month, the ministry had sought fresh comments from the top 300 companies that will converge their accounts with international financial reporting standards (IFRS) from the next financial year, after the prime minister’s office asked it to consult all stakeholders before rolling out the new norms.
Indian companies will be asked to follow the norms, which will be rolled out in a phased manner. All BSE-Sensex 30 and NSE-Nifty 50 companies will start following IFRS from April 1 along with all listed companies having a net worth of . 1,000 crore and above.
While the comments received by the ministry in the last two weeks relate to issues of taxation and revenue recognition, they did not call for deferring the deadline, the official said.
“I don’t think it is a good thing to delay things just for the sake of delaying things or because someone is lazy or tardy. I think, we are still well within the reach of meeting the deadline,” corporate affairs minister Salman Khurshid had said in a recent interview with Media.
Ficci’s position did not have many takers among other industry bodies. “Most companies we have been interacting with say that with much preparations and investment going into the process already, unwinding at this stage is not appropriate ,” said an official with another industry body.
The Confederation of Indian Industry (CII), which represents the majority of the companies that are part of the first phase of convergence, did not comment. The government had made a commitment at the G20 summit in 2009 to converge to IFRS from April 1, 2011.
“The industry was always kept in loop regarding the preparations. Several companies have already invested heavily in converging the accounting norms with international standards,” Amarjit Chopra, presdent of accounting rulemaker ICAI , said in response to the FICCI call.
Accounting experts welcomed the government’s decision to go ahead with the April 1 deadline. “It is a positive move because it is part of India’s commitment globally. If it does not happen, it will raise question on India’s ability to push major reforms,” said Dolphy D’Souza , partner at consulting firm Ernst & Young .