Infosys technologies LTD- it was founded on july 2,1981 in pune by NR Narayana Murthy and 6 other people .

the company was incorporated as private company and went public in 1993.in its recent annual reports , infosys technologies limited also provides its balance sheet as per the inter national financial reporting standards

IFRS are standards ,interpretations and framework adopted by the international accounting standards board [IASB] which was issued between 1973 and 2001 byIASC

Structure of IFRS  Framework  Role of framework  Objective of financial statement  Assumptions  Qualitative characteristics of financial statement  Elements of financial statement

Generally accepted accounting principles is the term used to refer to the standard framework of guidelines for financial accounting used in any given jurisdiction GAAP includes the standards conventions and rules accountants follow In recording and summarizing transactions and in the prepration of financial statements

Financial accounting is information that must be assembled and reported objectively. The third parties who must rely on such information have a right to be assured that the data are free from bias and inconsistency, whether deliberate or not .for this reason financial accounting relies on certain standards or guides called GAAP. In any report of financial statements [audit, compilation and review etc] the auditor must indicate to the reader whether or not the information contained within the statements complies with GAAP

PRINCIPLE OF REGULARITY – regularity can be defined as confirmity to enforced rules and laws  PRINCIPLE OF CONSISTENCY- this principle states that when a business has once fixed a method for the accounting treatment of an item, it will enter all similar items that follow in exactly the same way  PRINCIPLE OF SINCERITY- according to this principle, the accounting unit should reflecting good faith the reality of the company’s financial status

PRINCIPLE OF PERMANENCE OF METHOD – this principle aims at allowing the coherence and comparison of financial information published by the company  PRINCIPLE OF NON-COMPENSATION OF THE COMPANY- one should show the full details of the financial information and not seek to compensate a debt with an asset, a revenue with an expense etc  PRINCIPLE OF PRUDENCE- this principle aims at showing the reality ‘as is’ one should not try to make things look prettier than they are . Typically , a revenue should be recorded only when it is certain and a provision should be entered for an expense which is probable

PRINCIPLE OF CONTINUITY –when stating financial information , one should assume that the business will be interruped. This principle mitigates the principle of prudence, assets do not have to be accounted at their disposable value ,but it is accepted that they are their historical value  PRINCIPLE OF PERIODICITY- each accounting entry should be allocated to a given period and split accordingly if it covers several periods . If a client prepays a subscription the given revenue should be split to the entire time span and not counted for entirely on date of the transaction  PRINCIPLE OF FULL DISCLOSURE- all informations and values pertaining to the financial position of a business must be disclosed in the records

IFRS & Indian GAAP
• The IFRS or the International Finance Regulation Standards are defined by the International Accounting Standards Board. The IFRS is increasingly being adopted by companies across the globe for preparing their financial statements. IFRS comprises of International Financial Reporting Standard, International Accounting Standard, and Interpretation originated by the International Financial Reporting Interpretations Committee. • Indian GAAP are the standards notified by the central govt. under the companies (Accounting Standard)Rules,2006 (applicable to all companies) vide notification G.S.R.739(E) dated 7 Dec. 2006 and to the relevant requirements of the companies Act,1956.

Differences between IFRS &Indian GAAP
IFRS 1. IAS 1 (2007)-Presentation of Financial statements 2.Financial Statements under IFRS comprises of (a)A statement of financial position (b)A statement of comprehensive income (c)A statement of cash-flows (d)A statement of changes in equity (e)Notes including summary of accounting policies and explanatory notes Indian GAAP 1.AS 1-Disclosure of accounting policies/schedule VI to companies act,1956. 2. The components of financial statement are(a)Balance sheet (b)Statement of profit & loss (c)Cash flow statement.(not mandatory for small and medium sized companies). (d)Explanatory notes including summary of accounting policies

3.Omission or misstatements 3. Financial statement should are material if individually or disclose all “material” items, collectively they could i.e. items the knowledge of influence the economic which might influence the decisions of users taken on decisions of the user of the the basis of financial financial statements. statements. 4. An entity is required to present 4. No such classification are current & non-current assets required and liabilities, as separate classifications in the statement of financial position 5. Fair presentation requires faithful representation of the effects of the transaction, other events and conditions in accordance with the definitions of and recognition criteria for assets, liabilities, income and expenses set out in the frame work. 5. Fair presentation requires compliance with the applicable requirements of the companies Act,1956 and the other regulatory requirements and the application of the qualitative characteristics of the accounting standard framework.

31.03.05

31.03.06

Absolute Percentage increase/decre change ase

Sources of fund: Sh.holder’s fund Capital Res. & surplus Total Sh.holder fund 135 5090 5225 138 6828 6966 68 3 1738 1741 -26 +2.22 +34.14 +33.32 -27.65

Other L.T.Liability 94 C.Liabilities & Prov. Liabilities Provisions 656 777

934 1412 2346

278 635 913

+42.37 +81.72 +63.71

Total C.L. & Prov. 1433

Application of fund: Fixed Assets Net Gross Block Capital work in progress Investments 1256 318 1211 1655 571 755 65 399 253 -456 20 +31.76 +79.55 -28.97 +44.44

Deferred Tax Assets 45 C.A.,loans & Adv. S. Debtors Cash & Bank balance Loans & Advances Total C.Assets 1322 1576 1024 3922

1608 3429 1297 6334 9380

286 1853 273 2412 2628

+21.63 +117.57 +26.66 +61.49 +38.92

Total Application of 6752 fund

In current Assets total increase amounts to 2412 crores (61.49%). The increase in cash was the most i.e. Rs.1853 crores(117.57%)  Current Liabilities increases up to Rs 913 crores(63.71%).This increase is greater than increase in current asset that means in 05-06 the liquidity of Infosys has decreased.  During the yr. 05-06 reserves & surplus have increased by Rs 1738 crores(34.14%). The Sh. Holder fund have increased by Rs 1741 crores (33.32%) which represent the financial soundness of the business.  During the year the investment has been decreased & is used to pay off its other long term liability.

change Assets: Current Assets Cash & cash equivalents Investment in liquid mutual fund unit Trade account receivable Unbilled revenue Other C.A. &prepaid exp. Total C.A. 410 889 479

change

116.8%

278

170

-108

-38.8%

303

361

58

19.14%

32 35

48 40

16 5

50% 14.2%

1058

1508

450

42.5%

Property, Plant & equipments

352

491

139

39.4%

Goodwill

8

8

0

0%

Deferred tax asset

10

14

4

40%

Advance Income Tax

_

18

18

_

Other assets

26

27

1

3.8%

Total Assets

1454

2066

612

42%

abilities & . Holder’s uity

rrent Liability 1 23 3 _ 2 44 160 209 2 -23 -5 24 36 34 200% -100% -71.4% 120% 29% 19.4%

count yable

ome tax yable

ent deposits 7 20 124 175

earned venue

her accrued bilities

tal current bilities

n-current bility _ -21 -100%

eferred stock 21 subsidiary

Stock holder’s equity Equity shares 31 31 0 0%

Additional paid 279 in capital Accumulated 33 other comprehensive income Retained earning 910

428

149

53.4%

9

-24

-72.7%

1369

459

50.4%

Minority interest_

15

15

_

Total Liability

1454

2066

612

42%

A/c to Indian GAAP Deferred tax asset= Rs 65 crores A/c to IFRS Deferred tax asset= 14 million $ Comparing both, we get 1$=650000000/14000000 =Rs 46.42 Thus currency rate is 1 USD = Rs 46.42

Indian GAAP has followed the Accounting standard of India (AS1) while IFRS has followed International Accounting Standards (IAS1).  A/c to IFRS total CA has increased up to 42.5 % while a/c to Indian GAAP the increase in CA is up to 61.49%.  IFRS has made differentiation regarding CA, non CA, liabilities & non liabilities however its not in Indian GAAP.

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