Financial Reporting and

Regulations

Dr. Aditya P. Tripathi

 Financial Reporting & Regulations

1. Introduction to USGAAP

2. Introduction to International Accounting Standards

3. Indian Accounting Standards

4. Applicability of Various Standards

5. Comparison and Harmonisation

6. IFRS/ Ind-AS

Dr. Aditya P. Tripathi

 Introduction to US-GAAP

• The USGAAP is, basically, a set of accounting rules used

for preparing, presenting, and reporting financial
statements for :
• wide ranging entities, counting privately-held and publicly-
treated companies, governments, and non-profit
organizations.
• This term is by and large confined to US and is thus
commonly abbreviated as USGAAP.

Dr. Aditya P. Tripathi

 Contd…
• Yet, in theoretical sense, GAAP encompasses
the whole industry of accounting, rather than
only the US.

Dr. Aditya P. Tripathi

 Objectives of USGAAP

As a part of US GAAP, the financial reporting should provide

information (s) in the following manner :
• The provided info should be apt to be presented to creditors
and potential investors in addition to other users for making
cogent (logical) decisions concerning investment, credit and
similar financial activities.
• The provided info should be helpful to the creditors and
potential investors in evaluating the amounts, timing, and
uncertainty of expected cash receipts.

Dr. Aditya P. Tripathi

 Contd…

• The info should be related to economic resources, the claims

to those resources, as well as the changes occurring in them.
• The provided info should be helpful in making financial and
long-term decisions.
• The information should be helpful in perking up the business
performance.

Dr. Aditya P. Tripathi

 USGAAP

Comprises of

1.Four Basic Assumptions

2.Four Basic Principles
3.Five Basic Constraints

Dr. Aditya P. Tripathi

 Basic Assumptions of USGAAP

The US GAAP features four basic

assumptions to meet its objectives
which are:
1. Accounting Entity
2. Going Concern
3. Monetary Unit Principle
4. Time-period Principle
Dr. Aditya P. Tripathi
 Basic Principles

1. Historical Cost Principle

2. Revenue Recognition Principle
3. Matching Principle
4. Full Disclosure Principle

Dr. Aditya P. Tripathi

 Constraints
1. Objectivity principle: The financial statements provided by the
accountants should be based on objective evidence.
2. Materiality principle: The significance of an item should be considered
when it is reported. An item is considered significant when it would
affect the decision of a reasonable individual.
3. Consistency principle: It means that the company uses the same
accounting principles and methods from period to period.

4. Conservatism principle: while choosing between two situations, the

one which has the less favorable outcome is the situation that should
be chosen
5. Cost Constraint: The benefits of reporting financial information should
be justifiable and be greater than the costs imposed on supplying it.
Dr. Aditya P. Tripathi
 Departure from GAAP..
As per the AICPA's Code of Professional Ethics under Rule 203 -
Accounting Principles, a member must depart from GAAP if following it
would lead to a material misstatement on the financial statements, or
otherwise be misleading.
In the departure the member must disclose, if practical, the reasons why
compliance with the accounting principle would result in a misleading
financial statement.
Under Rule 203-1-Departures from Established Accounting Principles, the
departures are rare, and usually take place when there is new
legislation, the evolution of new forms of business transactions, an
unusual degree of materiality, or the existence of conflicting industry
practices.

Dr. Aditya P. Tripathi

Introduction to International
Accounting Standards

What is IFRS ????

Dr. Aditya P. Tripathi

 IFRS
• International Financial Reporting
Standards (IFRS) are Standards,
Interpretations and the Framework adopted
by the International Accounting Standards
Board (IASB).

• IASB is an independent, privately-funded

accounting standard-setter based in
London, UK.

13
 Cont…
 IASB founded on April 1, 2001 is the successor
of the International Accounting Standards
Committee (IASC) founded in June 1973 in
London.
 It is responsible for developing the International
Financial Reporting Standards (new name for the
International Accounting Standards issued after
2001), and promoting the use and application of
these standards.

Many of the standards forming part of IFRS were

known by the older name of International 14
Accounting Standards (IAS).
 Cont…
IAS were issued between 1973 and 2001 by the
Board of the International Accounting Standards
Committee (IASC).

On 1st April 2001, the new IASB took over from

the IASC the responsibility for setting
International Accounting Standards.

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 Why IFRS
A single set of accounting standards
would help standardize training
internationally and assure better quality at
global level,

it would also permit international capital to

flow more freely, enabling companies to
develop and apply consistent global
practices on accounting problems.
16
 Cont……
It would be beneficial to regulators
too, as the complexity associated with
needing to understand various
reporting regimes would be reduced.

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 SCOPE OF IFRS
1. IASB Standards are known as
International Financial Reporting
Standards (IFRSs).

2. All International Accounting Standards

(IASs) and Interpretations issued by the
former IASC (International Accounting
Standard Committee) and SIC (Standard
Interpretation Committee) continue to
be applicable unless and until they are
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amended or withdrawn.
 Cont…..

 IFRSs apply to the general

purpose financial statements and
other financial reporting by
profit-oriented entities
 -- those engaged in commercial,
industrial, financial, and similar
activities, regardless of their
legal form.

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 Cont….

Entities other than profit-

oriented business entities may
also find IFRSs appropriate.

20
 LIST OF IFRS

Understanding IAS & IFRS

21
India & IFRS

22
 Accounting Standards
Convergence with IFRSs

• ICAI (The Institute of Chartered Accountants

of India) decided to converge with IFRSs.
from accounting periods commencing on or
after 1st April 2011 for listed entities and
other public interests entities such as banks,
insurance companies and large-sized
entities.
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 Cont….

• For smooth transition to the IFRSs,

ICAI took up the matter of
Convergence with NACAS,(National
Advisory Committee for Accounting
Standards) and various regulators
such as the RBI, SEBI and IRDA.

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 Introduction to Indian Accounting
Standards- Ind-AS
Indian Accounting Standards (abbreviated as
Ind-AS) in India accounting standards were
issued under the supervision and control of
Accounting Standards Board (ASB), which was
constituted as a body in the year 1977.

Dr. Aditya P. Tripathi

 Introduction to Ind-AS

ASB is a committee under Institute of

Chartered Accountants of India (ICAI)
which consists of representatives from
government department (s),academicians,
space agencies, representatives from
ASSOCHAM, CII, FICCI, etc

Dr. Aditya P. Tripathi

 Introduction to Ind-AS

The Ind AS are named and numbered in the

same way as the corresponding IFRS.
National Advisory Committee on Accounting Standards
(NACAS) recommend these standards to the Ministry
of Corporate Affairs (MCA).
MCA has to spell out the accounting standards
applicable for companies in India. As on date MCA
has notified 39 Ind AS. These have been made
applicable to the companies from financial year 2015-
16 voluntarily and from 2016-17 on a mandatory basis.
Dr. Aditya P. Tripathi
 ROAD MAP TO IND-AS
• April 1, 2015:
Voluntary adoption
• April 1, 2016:
• Mandatory adoption by companies whose net worth is Rs 500
crore or more 
• Applicable to holding, subsidiary, joint venture or associate
companies of above companies
• April 1, 2017:
• Mandatory adoption for unlisted companies having net worth
of Rs 250 crore or more 
• Applicable to companies with net worth of less than Rs 500
crore, whose equity or debt securities are listed in India or
outside India. Dr. Aditya P. Tripathi
 ROAD MAP TO IND-AS
• The Road Map for implementation of Indian Accounting
Standards (Ind AS) for commercial Banks (Banks), Insurance
Companies (Insurers) and Non-Banking Financial Companies
(NBFCs) was announced on 18/01/2016 and implementation
schedule is drawn as follows:
• (i) Banks (excluding Urban Cooperative Banks and Regional
Rural Banks), All-India Term-lending Refinancing Institutions
(i.e. Exim Bank, NABARD, NHB and SIDBI) to adopt
Accounting Standards for Periods beginning from 01/04/18
onwards for preparation of financial statements.
• (ii) NBFCs with networth of Rs. 500 crore and more to adopt
Accounting Standards for Periods beginning from 01/04/18
onwards for preparation of financial statements.
Dr. Aditya P. Tripathi
 ROAD MAP TO IND-AS
(iii) NBFCs that are listed or in the process of being listed and
having net worth of less than Rs. 500 crores to adopt
Accounting Standards for periods beginning from 01/04/19
onwards for preparation of financial statements.
(iv) Unlisted NBFCs having net worth between Rs. 250 crores and
Rs 500 crores to adopt Accounting Standards for Periods
beginning from 01/04/19 onwards for preparation of financial
statements.
(v) Holding subsidiary, Joint Venture or associate companies of
(iii) and (iv) above to adopt Accounting Standards for Periods
beginning from 01/04/19 onwards for preparation of financial
statements.

Dr. Aditya P. Tripathi

 List of Ind-AS

Ind-AS notified by MCA

Dr. Aditya P. Tripathi

 Comparative Summary of Indian
Accounting Standards & IFRS
Existing Indian IFRS Ind AS
AS No. Converged IFRS
Standard No. No.
AS 1 Disclosure of IAS 1 Ind AS 1 Presentation of
Accounting Financial
Policies Statements
AS 2 Valuation of IAS 2 Ind AS 2 Inventories
Inventories
AS 3 Cash Flow IAS 7 Ind AS 7 Statements of Cash
Statements Flows
AS 4 Events Occurring IAS 10 Ind AS 10 Events after the
after the Balance Reporting Period
Sheet Date
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 Comparative Summary of Indian Accounting
Standards & IFRS
AS IFRS Ind-AS
Indian Standard IFRS
No. No. No.
AS 5 Net Profit or Loss for IAS 8 Ind AS 8 Accounting Policies,
the Period, Prior Changes in
Period Items and Accounting
Changes in Estimates and
Accounting Policies Errors
AS 6 Depreciation Supers IAS36 -
Accounting eded
by
AS 7 Construction IAS 11 Ind AS Revenue
Contracts 115
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 Comparative Summary of Indian Accounting
Standards & IFRS

IFRS Ind-AS
AS No. Indian Standard IFRS
No. No.
AS 9 Revenue IAS 18 Ind AS Revenue
Recognition 115
AS 10 Accounting for IAS 16 Ind AS Property, Plant and
Fixed Assets 16 Equipment
AS 11 The Effects of IAS 21 Ind AS The Effects of
Changes in Foreign 21 Changes in Foreign
Exchange Rates Exchange Rates

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 Comparative Summary of Indian Accounting
Standards & IFRS
IFRS Ind-AS
AS No. Indian Standard IFRS
No. No.
AS 12 Accounting for IAS 20 Ind AS Accounting for
Government 20 Government Grants
Grants and Disclosure of
Government
Assistance
AS 13 Accounting for IAS 40 Ind AS Investment Property
Investments 40
IAS 27 Ind AS Separate Financial
27 Statements

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 Comparative Summary of Indian Accounting
Standards & IFRS
IFRS Ind-AS
AS No. Indian Standard IFRS
No. No.
AS 14 Accounting for IFRS 3 Ind AS Business
amalgamations 103 combinations
AS 15 Employee Benefits IAS 19 Ind AS Employee
19 Benefits
AS 16 Borrowing costs IAS 23 Ind AS Borrowing costs
23
AS 17 Segment Reporting IFRS 8 Ind AS Operating
108 Segments

36
 Comparative Summary of Indian Accounting
Standards & IFRS

AS IFRS Ind-AS
Indian Standard IFRS
No. No. No.
AS 18 Related Party IFRS Ind AS Disclosure of
Disclosures 12 24 Interests in other
Entities
AS 19 Leases IAS 17 Ind AS Leases
17
AS 20 Earnings Per Share IAS 33 Ind AS Earnings Per Share
33

37
 Comparative Summary of Indian Accounting
Standards & IFRS
AS IFRS Ind-AS
Indian Standard IFRS
No. No. No.
AS 21 Consolidated IFRS Ind AS Consolidated
Financial 10 110 Financial Statements
Statements
IAS 27 Ind AS Separate Financial
27 Statements

IFRS Ind AS Disclosure of Interest

12 112 in other entities
AS 22 Accounting for IAS 12 Ind AS Income taxes
Taxes on Income 12

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 Comparative Summary of Indian Accounting
Standards & IFRS
IFRS Ind-AS
AS No. Indian Standard IFRS
No. No.
AS 23 Accounting for IAS Ind AS Investments in
Investments in 28 28 Associates and
Associates in Joint Ventures
Consolidated Financial
Statements
AS 24 Discontinuing IFRS Ind AS Non Current Assets
operations 5 105 Held for Sale and
Discontinued
operations
AS 25 Interim financial IAS Ind AS Interim Financial
reporting 34 34 Reporting
39
 Comparative Summary of Indian Accounting
Standards & IFRS
AS IFRS Ind-AS
Indian Standard IFRS
No. No. No.
AS 26 Intangible assets IAS 38 Ind AS Intangible
38 Assets

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 Comparative Summary of Indian Accounting
Standards & IFRS
AS IFRS Ind-AS
Indian Standard IFRS
No. No. No.
AS 27 Financial Reporting of IAS 28 Ind AS Investments in
Interests in Joint 28 Associates and
Ventures Joint Ventures

IAS 27 Ind AS Separate

Financial
27
Statements

IFRS 11 Ind AS Joint

111 Arrangements

IFRS 12 Ind AS Disclosure of

112 Interest in
other entities
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 Comparative Summary of Indian Accounting
Standards & IFRS
AS IFRS Ind-AS
Indian Standard IFRS
No. No. No.
AS 28 Impairment of assets IAS 36 Ind AS Impairment of
36 assets
AS 29 Provisions, Contingent IAS 37 Ind AS Provisions,
Liabilities and 37 Contingent
Contingent Assets Liabilities and
Contingent Assets

AS 30 Financial Instruments IAS 39 Ind AS Financial

Accounting 109 Instruments
AS 31 Financial Instruments IAS 32 Ind AS Financial
Presentation 32 Instruments –
Presentation
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 Comparative Summary of Indian Accounting
Standards & IFRS
IFRS Ind-AS
AS No. Indian Standard IFRS
No. No.
AS 32 Financial IFRS 7 Ind AS Financial Instruments:
Instruments- 107 Disclosures
Disclosures
- - IFRS 2 Ind AS Share based payment
102
- - IAS 29 Ind AS Financial Reporting in
29 hyperinflationary
Economies
- - IFRS 6 Ind AS Exploration for and
106 Evaluation of Mineral
Resources
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 Comparative Summary of Indian Accounting
Standards & IFRS
AS IFRS Ind-AS
Indian Standard IFRS
No. No. No.
- - IAS 26 Ind AS Accounting and Reporting
26 of Retirement Benefit
Plans*
- - IAS 41 Ind AS Agriculture
41
- - IFR S4 Ind AS Insurance Contracts
104
- - IFRS 1 Ind AS First Time Adoption
101 of Indian Accounting
Standards
* Exposure drafts issued
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 Comparative Summary of Indian Accounting
Standards & IFRS
AS IFRS Ind-AS
Indian Standard IFRS
No. No. No.
- - IFRS 12 Ind AS Regulatory Deferral
114 Accounts
- - IFRS 13 Ind AS Fair Value
113 Measurement

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Dr. Aditya P. Tripathi

For Further Interaction :
Contact at following ids :
draptripathidu@gmail.com
lkaditya1982@gmail.com

Dr. Aditya P. Tripathi