The agriculture sector will not follow the International Financial Reporting System (IFRS) like other financial sectors of the country. The decision was taken by the Institute of Charted Accountants of India (ICAI), which drafts the accounting standards for various financial sectors. India has to converge its accounting standards with IFRS from April 1, 2011.
Amarjit Chopra, ICAI president — who was in Lucknow to participate in the All India Conference on Management of Fiscal and Natural Wealth — said: “We have decided to defer the accounting standards for agriculture for the time being.” Accounting standards for all other sectors have been sent to the National Advisory Committee on Accounting Standard (NACAS), he added.
“The problem with coming up with the accounting standards for the agriculture sector is in giving measurement for fair valuation. Every quarter, we need to capture the value of the standing crop, which is not possible in the given circumstances,” said Manoj Fadnis, Chairman of the Accounting Standard Board and central council member of ICAI. The NACAS has forwarded most of the other standards to Ministry of Corporate Affairs.
“We expect the ministry to notify the standards for IFRS this month,” he added.
India is to adopt the IFRS in a phased manner from April 1, 2011. While companies with net worth in excess of Rs 1,000 crore have to adopt the system, companies with net worth in excess of Rs 500 crore will adopt it by April 1, 2013.