Paper Details

Abstract Globalization has laid down a path for all the countries to adopt a single set of accounting standards. In the recent year’s continuous adoption of IFRS worldwide has become very popular due to which financial reporting has seen many changes. IFRS are single set of high quality, understandable and enforceable global accounting standards. India has decided to converge to IFRS as it is an upcoming economy in the world and is insisting on cross border trade. Ind AS (Converged IFRS) are issued under the supervision of Accounting Standards Board (ASB). ASB declared that all the Indian companies should follow Ind-AS either voluntarily or mandatorily. Companies main concern is to understand the extent to which accounting differences between National GAAP and Ind-AS could affect their financial statements as converging to IFRS is not just considered to be a change in accounting rules. The purpose of this paper is to provide evidence of the nature and quantum of the differences between Indian GAAP and IFRS with respect to IND AS 16 and Ind-AS 115. The findings have indicated a more relevant impact of such a transition. Two NYSE listed Indian companies Tata Motors and Vedanta Ltd., are considered in the study for a period of 10 years. The results indicated that Gross block of both the companies, Revenue from operations for Tata motors and Depreciation and Net profit for Vedanta Limited differs significantly between Pre -convergence and Post-convergence IFRS and I GAAP. However, the differences in Depreciation and Net profit in case of Tata motors are significant only in the Pre-convergence reports, while Revenue from Operations of Vedanta Limited remained consistent across both accounting standards, showing no significant differences. The outcomes emphasize the effect of convergence on specific financial metrics and recommend that accounting standards convergence has led to changes in the treatment of certain financial elements while keeping others reasonably stable.

Key words: IFRS, IND AS, Property, plant and equipment, Revenue from contracts with customers