EC has concerns on India's IFRS move
Wednesday 3 August 2011 - by Andrew Hickley
India is raising "significant uncertainty" about its convergence on IFRS accounting standards as it has made numerous modifications and carve-outs from the global rules, the European Commission has warned.
Thirty-five Indian Generally Accepted Accounting Principles were issued on 25 February though the expected date these will apply has since been delayed.
The EC says: "Thus, the question remains whether companies complying with these Indian GAAP would be able to make an unreserved statement of compliance with IFRS."
Financial statements from businesses in India are accepted within the EU until 31 December 2011. The commission has to decide before the end of the year whether convergence towards IFRS has been sufficient to allow the EU to continue accepting these statements.
The report - compiled by the Committee of European Securities Regulators and its successor the European Securities and Markets Authority - also warns that because no issuers in India have taken advantage of early adoption of IFRS, regulators have no experience of enforcement.
However the EC says it is much more encouraged about progress in China. The jurisdiction must also prove it has sufficiently converged its standards so that the EU will continue to accept its financial statements.
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