The government has given two more years to banks and NBFCs to align their accounting practices with the international financial reporting standards (IFRS). The core group of the ministry of corporate affairs extended the deadline to April 2013 at a meeting on March 29.
Regional Rural Banks (RRBs) and urban co-operative banks with a net worth lower than Rs 200 crore have been allowed to follow the current accounting standards, saving them from compliance costs.
Amarjit Chopra, president of the Institute of Chartered Accountants of India said, “The decision is a step in the right direction,” “Banks will take time to prepare their software required to enable the convergence.”
All companies listed on NSE and BSE and those with a net worth higher than Rs 500 crore will have to submit IFRS-compliant financial statements on April 1, 2011.
Convergence with the globally accepted accounting norms is meant for bringing in uniform accounting practices across the globe. It is part of the Indian government’s commitment at the last G20 summit last year.
For insurance companies, the new convergence deadline will be April 2012, which is a year after the first tranche of IFRS convergence is due.The core group of the ministry had earlier decided that the convergence process will be in phases. It decided to let off small-sized urban co-operative banks and unlisted NBFCs from the convergence process citing their low exposure to international markets.
