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Introduction to IFRSIntroduction to IFRS

IFRSIFRS standsstands for for InternationalInternational FinancialFinancial ReportingReporting StandardsStandards..

IFRSIFRS isis A A SetSet of of InternationalInternational Accounting Accounting StandardsStandards statingstating howhow particular particular typestypes of of transactiontransaction andand other other eventsevents shouldshould bebe reportedreported inin financialfinancialstatementstatement

IFRSIFRS::-- A A setset of of FinancialFinancial ReportingReporting StandardsStandards issuedissued byby thethe InternationalInternational Accounting Accounting StandardsStandards BoardBoard (IASB)(IASB) isis recognizedrecognized under under thethe brandbrand namenameIRRSsIRRSs.. IFRSs¶IFRSs¶ isis aa tradetrade markmark of of thethe InternationalInternational Accounting Accounting StandardsStandardsCommitteeCommittee FoundationFoundation.. IFRSsIFRSs comprisecomprise of of::

InternationalInternational FinancialFinancial ReportingReporting StandardsStandards

InternationalInternational Accounting Accounting StandardsStandards andand

InterpretationsInterpretations originatedoriginated byby thethe InternationalInternational FinancialFinancial ReportingReportingInterpretationsInterpretations Committee(Committee( IFRIC)IFRIC) andand

InterpretationsInterpretations issuedissued byby thethe former former StandingStanding InterpretationsInterpretations CommitteeCommittee ((SIC)SIC)..

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PresentlyPresently therethere areare 88 InternationalInternational FinancialFinancial ReportingReporting Standards,Standards, 2929

InternationalInternational Accounting Accounting StandardsStandards ,, 1515 IFRICIFRIC interpretationsinterpretations andand 1111 SICSICinterpretationsinterpretations..

TheThe IASBIASB isis anan independentindependent standardstandard settingsetting bodybody of of thethe InternationalInternational Accounting Accounting StandardsStandards CommitteeCommittee FoundationFoundation (IASC(IASC Foundation)Foundation)..

StructureStructure of of IASCIASC FoundationFoundation andand IASBIASB

TheThe InternationalInternational Accounting Accounting StandardsStandards CommitteeCommittee (IASC)(IASC) waswas renamedrenamed asasInternationalInternational Accounting Accounting StandardsStandards BoardBoard (( IASB)IASB).. TheThe principalprincipalresponsibilitiesresponsibilities of of thethe IASBIASB areare toto::

DevelopDevelop andand issueissue InternationalInternational FinancialFinancial ReportingReporting StandardsStandards andandExposureExposure Drafts,Drafts, andand

Approve Approve InterpretationsInterpretations developeddeveloped byby thethe InternationalInternational FinancialFinancial ReportingReportingInterpretationsInterpretations CommitteeCommittee (IFRIC)(IFRIC)..

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Objective OF IFRS

To standardize accounting methods and procedures.

To lay down principles for preparation and presentation.

ToTo establishestablish benchmarkbenchmark for for evaluatingevaluating thethe qualityquality of of financialfinancial

statementsstatements preparedprepared byby thethe enterpriseenterprise..

ToTo ensureensure thethe usersusers of of financialfinancial statementsstatements getget creditablecreditable financialfinancial

informationinformation..

ToTo attainattain internationalinternational levelslevels inin thethe relatedrelated areasareas

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AccountingAccounting StandardsStandards andand thethe CompaniesCompanies Act,Act, 19561956 As As per per SectionSection 211211 subsub sectionssections ((33 A), A), ((33 B)B) andand ((33 C)C) insertedinserted byby thethe CompaniesCompanies Amendment Amendment Act, Act, 19991999 ww..ee..f f.. 3131..1010..19981998::

((33A) A) everyevery PP && LL Account Account andand BalanceBalance SheetSheet shallshall complycomply withwith accountingaccountingstandards,standards,

((33 B)B) deviations,deviations, if if any,any, toto bebe discloseddisclosed withwith reasonsreasons andand financialfinancial effecteffect of of deviation,deviation,

((33 C)C) "accounting"accounting standards"standards" meansmeans standardsstandards of of accountingaccounting recommendedrecommended byby ICAIICAIor or asas maymay bebe prescribedprescribed byby CentralCentral GovtGovt.. inin consultationconsultation withwith NationalNational Advisory AdvisoryCommitteeCommittee onon Accounting Accounting StandardsStandards..

SectionSection 217217 subsub sectionsection ((22AA)AA) insertedinserted byby thethe CompaniesCompaniesAmendmentAmendment Act,Act, 20002000 ww..ee..f f.. 1313..1212..20002000::

((22AA) AA) TheThe Board'sBoard's reportreport shallshall alsoalso includeinclude aa Directors'Directors' ResponsibilityResponsibility StatementStatement indicatingindicatingthereintherein ((11)) thatthat inin preparationpreparation of of annualannual accounts,accounts, thethe applicableapplicable accountingaccounting standardsstandards hadhad beenbeenfollowedfollowed alongalong withwith proper proper explanationexplanation relatingrelating toto materialmaterial departuredeparture..

SectionSection 227227 subsub sectionsection ((33)(d))(d) insertedinserted byby thethe FinanceFinance Act,Act,19991999 ww..ee..f f.. 3131..1010..19981998::((33)(d))(d) thethe auditor'sauditor's reportreport shallshall alsoalso statestate whether,whether, inin hishis opinion,opinion, thethe PP && LL AccountAccount andand thethe BalanceBalance SheetSheet complycomply withwithaccounti

ngaccounting standardsstandards referredreferred inin sectionsection 211211 ((33C),C),((44)) wherewhere answer answer toto ((33)(d))(d) isis negativenegative or or withwith qualification,qualification, itit shallshall alsoalso statestate thethe reasonsreasons thereof thereof..


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WHYWHY IFRSIFRS ??

IndiaIndia isis oneone of of thethe over over 100100 countriescountries thatthat havehave or or areare movingmoving towardstowards IFRSIFRS ((InternationalInternational FinancialFinancial ReportingReporting Standards)Standards) convergenceconvergence withwith aa viewview toto bringingbringingaboutabout aa uniformityuniformity inin reportingreporting systemssystems globally,globally, enablingenabling businesses,businesses, financesfinances

andand fundsfunds toto accessaccess moremore opportunitiesopportunities..

IndianIndian companiescompanies areare listedlisted onon overseasoverseas stockstock exchangesexchanges andand havehave toto recastrecasttheir their accountsaccounts toto bebe compliantcompliant withwith GAAPGAAP requirementsrequirements of of thosethose countriescountries..ForeignForeign companiescompanies havinghaving subsidiariessubsidiaries inin IndiaIndia areare havinghaving toto recastrecast their their accountsaccounts toto meetmeet IndianIndian && overseasoverseas reportingreporting requirementsrequirements whichwhich areare differentdifferent..

ForeignForeign DirectDirect InvestorsInvestors (FDI),(FDI), overseasoverseas financialfinancial institutionalinstitutional investorsinvestors (FII)(FII) arearemoremore comfortablecomfortable withwith compatiblecompatible accountingaccounting standardsstandards andand companiescompaniesaccessingaccessing overseasoverseas fundsfunds feelfeel thethe needneed for for recastrecast of of accountsaccounts inin keepingkeeping withwithgloballyglobally acceptedaccepted standardsstandards..

ICAIICAI hashas decideddecided toto implementimplement IFRSIFRS inin IndiaIndia.. TheThe MinistryMinistry of of CorporateCorporate Affairs Affairshashas alsoalso announcedannounced itsits commitmentcommitment toto convergenceconvergence toto IFRSIFRS byby 20112011..

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IFRSIFRS ToTo WHOMWHOM APPLICABLEAPPLICABLE ??

ComplianceCompliance withwith IFRSIFRS inin IndiaIndia isis restrictedrestricted toto µPublicµPublic Entities¶Entities¶ whichwhich includeincludethosethose companiescompanies && entitiesentities listedlisted onon anyany stockstock exchangeexchange or or havehave raisedraisedmoneymoney fromfrom thethe public,public, or or havehave aa substantialsubstantial publicpublic interest,interest, or or publicpublic sector sector companiescompanies.. IFRSIFRS inin IndiaIndia wouldwould cover cover thethe followingfollowing publicpublic interestinterest entitiesentities ininthethe firstfirst phasephase..

ListedListed companiescompanies

Banks,Banks, insuranceinsurance companies,companies, mutualmutual funds,funds, andand financialfinancial institutionsinstitutions

Turnover Turnover inin precedingpreceding year year >> INRINR 11 billionbillion

BorrowingBorrowing inin precedingpreceding year year >> INRINR 250250 millionmillion

HoldingHolding or or subsidiarysubsidiary of of thethe aboveabove

IFRSIFRS isis notnot applicableapplicable toto SME¶sSME¶s asas of of nownow

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WHEN IFRS ?

IFRS for public entities in India is applicable from 01/04/2011. The opening IFRSbalance sheet at the date of transition to IFRS ± 01/04/2010, which is the start date for full comparative information presentation in IFRS

IMPACT OF IFRS

IFRS implementation affects several areas of the business entity, such aspresentation of accounts, the accounting policies and procedures, the way legaldocuments are drafted, the way the entity looks at its assets and their usage, as wellas the its communications with its stakeholders and also the way it conducts itsbusiness.

This fundamental and pervasive nature of impact of IFRS, makes it imperative thatsufficient planning and thought is given to this aspect and choices made at thetransition stage itself, as they determine the effect on the company and its operations.

A detailed analysis of all aspects of impact and change as well as all legaldocumentation and communication becomes necessary.

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LIST OF IFRSLIST OF IFRSIFRSIFRS--11 First time Adoption of International Financial Reporting StandardsFirst time Adoption of International Financial Reporting Standards

IFRSIFRS--22 ShareShare--based paymentsbased payments

IFRSIFRS--33 Business CombinationsBusiness Combinations

IFRSIFRS--44 Insurance ContractsInsurance Contracts

IFRSIFRS--55 Non Current Assets held for sale and Discontinued OperationsNon Current Assets held for sale and Discontinued Operations

IFRSIFRS--66 Exploration for and evaluation of Mineral Resources.Exploration for and evaluation of Mineral Resources.

IFRSIFRS--77 Financial InstrumentsFinancial Instruments--DisclosuresDisclosures

IFRSIFRS--88 Operating SegmentsOperating Segments

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LIST OF IASsLIST OF IASs11.. IASIAS 11 PresentationPresentation of of FinancialFinancial StatementsStatements

22 IASIAS 22 InventoriesInventories

33.. IASIAS 77 StatementStatement of of CashCash FlowsFlows

44.. IASIAS 88 Accounting Accounting Policies,Policies, ChangesChanges inin Accounting Accounting EstimatesEstimates andand ErrorsErrors

55.. IASIAS 1010 EventsEvents after after thethe ReportingReporting PeriodPeriod

66.. IASIAS1111 ConstructionConstruction ContractsContracts

77.. IASIAS

1212IncomeIncome TaxesTaxes

88.. IASIAS1616 Property,Property, PlantPlant andand EquipmentEquipment

99.. IASIAS1717 LeasesLeases

1010.. IASIAS1818 RevenueRevenue

1111.. IASIAS1919 EmployeeEmployee BenefitsBenefits

1212.. IASIAS2020 Accounting Accounting for for GovernmentGovernment GrantsGrants andand DisclosureDisclosure of of GovernmentGovernment

Assistance Assistance

1313.. IASIAS2121 TheThe EffectsEffects of of ChangesChanges inin ForeignForeign ExchangeExchange RatesRates

1414.. IASIAS2323 BorrowingBorrowing CostsCosts1515.. IASIAS 2424 RelatedRelated PartyParty DisclosuresDisclosures

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LIST OF IASsLIST OF IASs

16.16. IAS 26IAS 26 Accounting and Reporting by Retirement Benefit Plans. Accounting and Reporting by Retirement Benefit Plans.

17.17. IAS 27IAS 27 Consolidated and Separate Financial StatementsConsolidated and Separate Financial Statements

18.18. IAS 28IAS 28 Investments in AssociatesInvestments in Associates

19.19. IAS 29IAS 29 Financial Reporting in Hyperinflationary EconomiesFinancial Reporting in Hyperinflationary Economies20.20. IAS 31IAS 31 Interests in Joint VenturesInterests in Joint Ventures

2121 IAS 32IAS 32 Financial Instruments : PresentationFinancial Instruments : Presentation

22.22. IAS 33IAS 33 Earnings per ShareEarnings per Share

23.23. IAS 34IAS 34 Interim Financial ReportingInterim Financial Reporting

24.24. IAS 36IAS 36 Impairment of AssetsImpairment of Assets

25.25. IAS 37IAS 37 Provisions, Contingent Liabilities and Contingent AssetsProvisions, Contingent Liabilities and Contingent Assets

26.26. IAS 38IAS 38 Intangible AssetsIntangible Assets27.27. IAS 39IAS 39 Financial Instruments : Recognition and MeasurementFinancial Instruments : Recognition and Measurement

28.28. IAS 40IAS 40 Investment PropertyInvestment Property

29.29. IAS 41IAS 41 Agriculture Agriculture

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ListList of of IFRICIFRIC InterpretationsInterpretations asas onon 3030..1111..20092009

11.. IFRICIFRIC 11 ChangesChanges inin ExistingExisting Decommissioning,Decommissioning, RestorationRestoration andand Similar Similar LiabilitiesLiabilities22.. IFRICIFRIC 22 Members'Members' SharesShares inin CoCo--operativeoperative EntitiesEntities andand Similar Similar InstrumentsInstruments33.. IFRICIFRIC 44 DeterminingDetermining Whether Whether anan Arrangement Arrangement ContainsContains aa LeaseLease44.. IFRICIFRIC 55 RightsRights toto InterestsInterests Arising Arising fromfrom Decommissioning,Decommissioning, RestorationRestoration andand EnvironmentalEnvironmental

RehabilitationRehabilitation FundsFunds..

55.. IFRICIFRIC 66 LiabilitiesLiabilities Arising Arising fromfrom ParticipatingParticipating inin aa SpecificSpecific MarketMarket -- WasteWaste ElectricalElectrical andandElectronicElectronic EquipmentEquipment

66.. IFRICIFRIC 77 Applying Applying thethe RestatementRestatement Approach Approach under under IASIAS 2929 FinancialFinancial ReportingReporting ininHyperinflationaryHyperinflationary EconomiesEconomies

77.. IFRICIFRIC 88 ScopeScope of of IFRSIFRS 22 **88 IFRCIIFRCI 99 ReassessmentReassessment of of EmbeddedEmbedded DerivativesDerivatives99.. IFRICIFRIC 1010 InterimInterim FinancialFinancial ReportingReporting andand ImpairmentImpairment1010 IFRICIFRIC1111** IFRSIFRS 22:: GroupGroup andand TreasuryTreasury ShareShare TransactionsTransactions1111.. IFRICIFRIC 1212 ServiceService ConcessionConcession Arrangements Arrangements1212

.. IFRICIFRIC1313

Customer Customer LoyaltyLoyalty ProgrammeProgramme1313.. IFRICIFRIC 1414 IASIAS 1919 ± ± TheThe LimitLimit onon aa DefinedDefined BenefitBenefit Asset, Asset, MinimumMinimum FundingFunding RequirementsRequirements anan

their their InteractionInteraction1414.. IFRICIFRIC 1515 Agreement Agreement for for thethe ConstructionConstruction of of RealReal EstateEstate1515 IFRICIFRIC 1616 HedgesHedges of of NetNet investmentsinvestments inin aa ForeignForeign OperationOperation1616 IFRICIFRIC 1717 DistributionDistribution of of NonNon CashCash Assets Assets toto OwnersOwners1717.. IFRICIFRIC 1818 Transfer Transfer of of Assets Assets fromfrom CustomersCustomers

** InterpretationsInterpretationscontainedcontained inin IFRICIFRIC 88 andand IFRICIFRIC 1111 areare nownow includedincluded inin IFRSIFRS 22 (( asas amendedamended inin JuneJune 20092009))..

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List of SIC Interpretations as on 30.11.2009List of SIC Interpretations as on 30.11.2009

11.. SICSIC 77 IntroductionIntroduction of of thethe EuroEuro

22.. SICSIC 1010 GovernmentGovernment Assistance Assistance ± ± NoNo SpecificSpecific RelationRelation toto OperatingOperating Activities Activities

33.. SICSIC 1212 ConsolidationConsolidation ± ± SpecialSpecial PurposePurpose EntitiesEntities

44.. SICSIC1313

JointlyJointly ControlledControlled EntitiesEntities ± ± NonNon--MonetaryMonetary ContributionsContributions byby VenturesVentures55.. SICSIC1515 OperatingOperating LeasesLeases ± ± IncentivesIncentives

66.. SICSIC 2121 IncomeIncome TaxesTaxes ± ± RecoveryRecovery of of RevaluedRevalued NonNon--DepreciableDepreciable Assets Assets

77.. SICSIC 2525 IncomeIncome TaxesTaxes ± ± ChangesChanges inin thethe TaxTax StatusStatus of of anan EnterpriseEnterprise or or itsits

ShareholdersShareholders

88.. SICSIC 2727 EvaluatingEvaluating thethe SubstanceSubstance of of TransactionsTransactions inin thethe LegalLegal FormForm of of aa LeaseLease

99.. SICSIC 2929 DisclosureDisclosure ± ± ServiceService ConcessionConcession Arrangements Arrangements

1010.. SICSIC 3131 RevenueRevenue ± ± Barter Barter TransactionsTransactions InvolvingInvolving Advertising Advertising ServicesServices

1111.. SICSIC 3232 IntangibleIntangible Assets Assets ± ± WebsiteWebsite CostsCosts

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Requirements of IFRSRequirements of IFRS

IFRSIFRS financialfinancial statementsstatements consistconsist of of (IAS(IAS11..88))

A A StatementStatement of of FinancialFinancial PositionPosition

A A ComparativeComparative IncomeIncome StatementStatement

Either Either aa statementstatement of of changeschanges inin equityequity (SOCE)(SOCE) or or aa statementstatement of of recognizedrecognizedincomeincome or or expenseexpense ("SORIE")("SORIE")

A A CashCash FlowFlow StatementStatement or or StatementStatement of of CashCash FlowsFlows

Notes,Notes, includingincluding aa summarysummary of of thethe significantsignificant accountingaccounting policiespolicies

ComparativeComparative informationinformation isis providedprovided for for thethe previousprevious reportingreporting periodperiod (IAS(IAS 11..3636)).. An An entityentity preparingpreparing IFRSIFRS accountsaccounts for for thethe firstfirst timetime mustmust applyapply IFRSIFRS inin fullfull for for thethe currentcurrent andand comparativecomparative periodperiod althoughalthough therethere areare transitionaltransitional exemptionsexemptions(IFRS(IFRS11..77))..


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OnOn 66 September September 20072007,, thethe IASBIASB issuedissued aa revisedrevised IASIAS 11 PresentationPresentation of of FinancialFinancial StatementsStatements.. TheThe mainmain changeschanges fromfrom thethe previousprevious versionversion areare totorequirerequire thatthat anan entityentity mustmust::

presentpresent allall nonnon--owner owner changeschanges inin equityequity (that(that is,is, 'comprehensive'comprehensive income'income' ))either either inin oneone statementstatement of of comprehensivecomprehensive incomeincome or or inin twotwo statementsstatements (a(aseparateseparate incomeincome statementstatement andand aa statementstatement of of comprehensivecomprehensive income)income)..

ComponentsComponents of of comprehensivecomprehensive incomeincome maymay notnot bebe presentedpresented inin thethestatementstatement of of changeschanges inin equityequity..

presentpresent aa statementstatement of of financialfinancial positionposition (balance(balance sheet)sheet) asas atat thethe beginningbeginningof of thethe earliestearliest comparativecomparative periodperiod inin aa completecomplete setset of of financialfinancial statementsstatementswhenwhen thethe entityentity appliesapplies anan accountingaccounting

'balance'balance sheet'sheet' willwill becomebecome 'statement'statement of of financialfinancial position'position'

'income'income statement'statement' willwill becomebecome 'statement'statement of of comprehensivecomprehensive income'income'

'cash'cash flowflow statement'statement' willwill becomebecome 'statement'statement of of cashcash flows'flows'..TheThe revisedrevised IASIAS 11 isis effectiveeffective for for annualannual periodsperiods beginningbeginning onon or or after after 11JanuaryJanuary 20092009.. EarlyEarly adoptionadoption isis permittedpermitted..

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First Time Adoption of IFRSFirst Time Adoption of IFRS

IFRSIFRS 11 requiresrequires anan entityentity toto complycomply withwith eacheach IFRSIFRS effectiveeffective atat thethereportingreporting datedate for for itsits firstfirst IFRSIFRS financialfinancial statementsstatements.. InIn particular,particular, thetheIFRSIFRS requiresrequires anan entityentity toto dodo thethe followingfollowing inin thethe openingopening

IFRSIFRS balancebalance sheetsheet thatthat itit preparesprepares asas aa startingstarting pointpoint for for itsitsaccountingaccounting under under IFRSsIFRSs::

RecognizeRecognize allall assetsassets andand liabilitiesliabilities whosewhose recognitionrecognition isis requiredrequired bybyIFRSsIFRSs;;

DoDo notnot recognizerecognize itemsitems asas assetsassets or or liabilitiesliabilities if if IFRSsIFRSs dodo notnot permitpermitsuchsuch recognitionrecognition;;

ReclassifyReclassify itemsitems thatthat itit recognizedrecognized under under previousprevious GAAPGAAP asas oneone typetype of of asset,asset, liabilityliability or or componentcomponent of of equity,equity, whichwhich areare differentdifferent typetype of of asset,asset,liabilityliability or or componentcomponent of of equityequity under under IFRSsIFRSs;; andand

Apply Apply IFRSsIFRSs inin measuringmeasuring allall recognizedrecognized assetsassets andand liabilitiesliabilities..


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THANK YOU THANK YOU

BY AVINASH SALUJABY AVINASH SALUJA

ACA,B.Com(H) ACA,B.Com(H)


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