By 121 News
Chandigarh 15th July:-Ind AS will immensely help Indian Multinational Corporations (MNCs), having significant presence in overseas markets in reporting to international investors as per the IFRS norms effectively and easily. This was stated by Jaswant Dhawan, Chairman, Chandigarh Branch (NIRC), ICAI at the workshop on 'Adoption of Indian Accounting Standards (Ind AS) - Key impacts and challenges' organised by Confederation of Indian Industry (CII) with Grant Thornton as Knowledge Partner at CII NR Headquarters in sector 31 here today. This workshop was organised to help businesses prepare better for implementation of the new accounting standards. In addition to Ind AS, the workshop also had a session on Domestic Transfer Pricing (TP) and current TP landscape.
Jaswant Dhawan, said that as same accounting standards are used by international peers of Indian corporates, this will increase the Indian companies' comparability with them. Ind AS is the indeed the need of the hour. Currently, in India, for computation of taxable income, companies use Profit before Tax, however, in many countries, this is calculated using IFRS as starting point of tax computation with some adjustments.
Amarbir Singh, Chairman, CII Chandigarh Council said that with global corporate integration enabling exponential growth for Indian companies, it has become pertinent for Indian companies to embrace financial reporting in an internationally accepted framework. MCA's notification of Ind AS is a welcome move for the Corporate India, however, it brings a set of challenges with itself and we need to assist India Inc. in this conversion. This workshop is a step in this direction and we hope that it helps the CFOs and the finance professionals in understanding and implementing the new framework well.
Nabeel Ahmed, Partner, Grant Thornton India LLP said that Ind AS will bring in certain complexities in financial reporting, more so, for companies in real estate, pharmaceutical and automotive ancillary sectors. The new guidance on definition of 'control'; applicability of percentage of completion method for real estate projects; embedded leases in arrangements with dedicated manufacturing capacities and accounting for self-constructed tools and dies, will add a lot more judgment to financial reporting processes. In addition to the above, India has adopted the standards on revenue recognition and financial instruments, ahead of their global implementation dates, which may lead to interpretation issues in light of the lack of implementation guidance around these key areas.
Rajeev Jain, Director, Grant Thornton India LLP said that over the past couple of years questions have been raised pertaining to various interpretations of the tax law and consequent compliance requirements. In the absence of any clarity from the lawmakers and legal precedents, taxpayers and consultants across the industry are adopting various practices to overcome various grey areas that remain in the Indian law. As the first audit cycle for domestic TP is approaching, we can expect to see a huge tussle between the taxpayer and tax authorities.
The workshop was attended by 60 professionals including CEOs, CFOs and middle level finance professionals of medium to large sized companies in India. The half-day workshop covered key aspects of the Ind AS and TP. While in Ind AS, it covered transition which involves presentation of Ind AS financial statements, group accounting, accounting for business combinations, property, plant and equipment and lease arrangements etc. The transfer pricing session covered the practical issues and challenges faced during compliance of Domestic Transfer pricing and implications of the Companies Act on related party transactions.
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