International Financial Reporting Standards (IFRS) was issued by International Accounting Standards Board (IASB). The International Standard setting process began long ago as an effort to Standardize and make easier to adopt by the developing and smaller nations which feel difficult to set and establish their own standards on Accounting and Reporting. The importance of having one standard was felt by the regulators, investors, large entities and audit firms as the business becomes more global. Convergence with IFRS issued by IASB has recently gained momentum all over the world. So far 109 countries presently require or permit use of IFRS in preparation of financial statements in their countries. By 2011, the number is expected to reach 150. Due to the complex nature of IFRS, Institute of Chartered Accountants of India (ICAI) in its 2006 concept paper expressed its view that IFRS should be adopted from 01.04.2011. Implementation will be done in a phased manner. Adoption of IFRS is mandatory for the following entities :
1. Public and Private companies listed and in the process of listing.
2. Private Companies who have issued debt instruments in a public market and.
3. Private companies which hold assets in fiduciary capacity (ex : Banks and Insurance companies)
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