Benefits of International Financial Reporting Standard (IFRS) in India

“ The International Financial Reporting Standards are rules and guidelines that are set by the ISAB which refers to International Accounting Standards Board that organizations and companies follow when filling financial statements”
International Financial Reporting Standards (IFRS) are principles-based standards, interpretations and the framework adopted by the International Accounting Standards Board (IASB).The formation of international standards enables investors, government and organizations to compare various financial statements supported by IFRS with greater ease. This is because there are many countries nowadays that permit or require organizations to comply with the set IFRS standards.
International Financial Reporting Standards, is the subject of discussion among financial experts today. Currently, there is a debate on how to enforce changes and how companies file their financial records and statements. Through IFRS, companies would have the option of swapping from GAAP to IRFS. However, this largely depends on the company’s size. In other words, the transition from GAAP to IRFS would help companies to adapt the new regulations efficiently. Indian companies looking at IFRS implementation will have to enable technology applications based on the impact assessment.
IFRS implementation involves four stages:
1. Impact assessment
2. Planning & designing
3. Realization
4. Data conversion

Benefits of IFRS
The following are some key benefits of IFRS
1. Unifies business transactions
One of the major aims of the International Financial Reporting Standards is simply to place each person in the whole world on one level when it comes to making financial statements. This enables Indian firms to display their financials on similar levels as their foreign competitors. In addition to that, organizations with various subsidiaries in other continents are also going to be able to prepare their financial statements in a universal accounting language that is understood by everyone.
2. Save cost
Many different companies are now adopting IFRS, this is going to be a great advantage for companies with foreign operations. IFRS enables internal consistency with regards to preparing financial reports. This means that the cost will be reduced since all the reports are going to be done in a uniform manner in all the different branches of the company.
3. Provide consistency
The best thing about IFRS is the fact that it allows companies having different subsidiaries to streamline their training, auditing, reporting standards and operation standards as well as development standards. Whether global or domestic, their offices could possibly adapt the same reporting techniques and standards providing consistent and precise reporting in company records. Transition to IRFS provides many perks to companies. Consistency is the most beneficial part of adopting the new standards.
4. Batter capital market
By adopting the new system of standardization, financial reporting on the global scene will place your company in the global marketplace. As a result, this will help in promoting new trade and accessing capital markets. The company will have an opportunity to be recognized as a global player in the capital market.
5. improves internal communications
Reliable financial reporting would allow multinational companies to apply standardized accounting procedures with its affiliates worldwide, which is necessary to enhance internal communications, decision making and quality reporting.
6. Easy performance appraisal
By increasing competitive markets, International Financial Reporting Standards allows companies to stand out among their peers in the ever competitive capital markets, and gives investors an opportunity to evaluate their performance in order to stay at par with competitors worldwide. Adopting this system may look different, especially when it comes to deferred taxes, employee benefits, business combinations and financial instruments. In addition, both external and internal reporting features have to be set up to ensure smooth transition.
7. Merger and takeover activity
Cross border mergers and acquisitions will get a boost by making it easier for the participants involved in as far as redrawing the financial statement concerned
8 .Investments
Foreign investors will be attracted to the economies where IFRS financial statements are the norm.
9. Increasing the level of confidence
The key benefit will be a common accounting system that is perceived as stable ,transparent ,and fair to investors across the world ,whether local or foreign .
10. Risk evaluation
IFRS will eliminate barriers to cross-border listing and will be beneficial for investors who ascribe a risk premium if the underlying financial information is not prepared in accordance with international standards.
Conclusion
Though the timeliness for the convergence of India’s GAAP with IFRS is April 2011 ,the companies started adopting the standards from FY 2010 Itself so that comparative figures would be available for disclosure in annual report .A successful transition requires a well thought of plan and hopefully well in advance .Many large listed companies have already moved on to the new standards and those that are in transition must be actively incorporating the change , especially in the beginning of the new financial year .