January 25, 2010 : The core group constituted by the ministry of corporate affairs for convergence of Indian accounting standards with international financial reporting standards (IFRS) from April 1, 2011 has said that there will be two separate sets of accounting standards falling under Section 211(3C) of the Companies Act, 1956.

The core group at its meeting on January 11, 2010 decided that the first set of accounting standards (converged accounting standards) will be applied to specified class of companies in phases which includes companies which are part of NSE – Nifty 50, and BSE - Sensex 30, whose shares or other securities are listed on stock exchanges outside India and companies, whether listed or not, which have a net worth in excess of Rs 1,000 crore.

The second phase would include companies whether listed or not, having a net worth exceeding Rs 500 crore but not exceeding Rs 1,000 crore will convert their opening balance sheet as at April 1, 2013, if the financial year commences on or after April 1, 2013 in compliance with the notified accounting standards which are convergent with IFRS.

The third phase would include listed companies which have a net worth of Rs 500 crore or less will convert their opening balance sheet as at April 1, 2014, if the financial year commences on or after April 1, 2014, whichever is later, in compliance with the notified accounting standards which are convergent with IFRS.

According to the core group of the ministry, when the accounting year ends on a date other than March 31, the conversion of the opening balance sheet will be made in relation to the first balance sheet which is made on a date after March 31. Companies which fall in the categories such as non-listed companies having a net worth of Rs 500 crore or less and whose shares or other securities are not listed on stock exchanges outside India will not be required to follow the notified accounting standards which are converged with the IFRS (though they may voluntarily opt to do so) but need to follow only the notified accounting standards which are not converged with the IFRS.

This also includes small and medium companies (SMCs). The ministry has also said that a separate roadmap for banking and insurance companies will be submitted by the sub-group I in consultation with the concerned regulators by February 28, 2010.

Subject: TWO SEPARATE SETS OF ACCOUNTING STANDARDS (AS) U/S 211(3C) OF COMPANIES ACT AGREED UPON BY CORE GROUP FOR CONVERGENCE OF INDIAN AS WITH IFRS

The Core Group, constituted by the Ministry of Corporate Affairs for convergence of Indian Accounting Standards with International Financial Reporting Standards (IFRS) from April, 2011, that held its meeting on 11th January 2010 agreed that in view of the roadmap for achieving convergence, there will be two separate sets of Accounting Standards u/s Section 211(3C) of the Companies Act, 1956. 

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