In this article we will discuss about the impact of International Accounting Standards (IAS) on Indian Accounting Standards.
Accounting Standards Board of the ICAI is engaged in the task of formulating and issuing accounting standards since 1977. The accounting standards issued by ASB of the ICAI are primarily based on International Accounting Standards (IAS) issued by the International Accounting Standards Committee.
Necessary modifications are carried out to suit and adjust to the trade, usage, customs, business and economic conditions and laws prevailing in India. Since several LASs are revised from time-to-time particularly on account of “Comparability and Improvement Project” carried out by IASC to reduce the alternatives granted in IAS, it has become necessary for ASB of the ICAI to carry out revisions in Indian Accounting Standards (AS) to conform to the revisions in IAS.
This process initiated by ASB of ICAI is required to be speeded up to reduce the gap with IAS and to meet with the challenge thrown open by the globalisation of Indian economy for harmonization with International Accounting Standards.
Further, the IASC has, as a result of an agreement reached with International Organisation of Securities Commission (IOSCO) to obtain its recognition for the IAS, revised a number of standards and brought out new standards.
The International Accounting Standards Committee (IASC) has so far issued forty one accounting standards of which large number of standards have been revised recently and seven accounting standards are superseded. Effective IASC standards are thirty four only.
Of late a new board has been constituted for setting International Accounting Standards under the name International Accounting Standards Board which has commenced operation under the aegis of International Accounting Standards Committee Foundation. The IASB has announced that the IASC: Foundation Trustees have agreed that accounting standards issued by the IASB shall be designated as “International Financial Reporting Standards”.
The list of IASs along with their linkage to the Indian Accounting Standards is given below in Fig. 11.1.