Need for IFRS

1. The important economic decisions are made on the basis of financial statements. In order to avoid manipulations of figures in the financial accounts, there is a need for consistent way of deciding which elements require recognition and measurement and how information is presented in the financial statements. Hence, IFRS helps to prevent material manipulation or errors in financial statements.

2. IFRS helps in global harmonisation. Unless accounting activities are regulated, different countries will apply different set of accounting rules and regulations are prevalent in each country. This will restrict uniformity and comparability of financial statements. Hence, IFRS promotes global standards for each of business growth.

3. It facilitates global investment. The convergence of financial reporting and accounting standards is a valuable process that contributes to the free flow of global investments and achieves substantial benefits for all capital market stakeholders.

  • To uniform accounting policies and procedures almost all countries have agreed to apply IFRS.
  • But the name of this IFRS has been converged as Ind AS.
  • In substance , Ind AS is not different from IFRS.
  • Ind AS is accounting standard notified by ministry of corporate affairs and has wide range of convergence as compared to existing accounting standards.

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