What is the need and benefits of convergence of Ind AS with IFRS?

What is the need and benefits of convergence of Ind AS with IFRS?

So convergence is important for the industry as well. It will allow the industry to lower the cost of foreign capital. If companies are not burned by adopting two different sets of standards it will allow them easier entry into the market. Convergence will benefit the users of the financial statements as well.

What is convergence in international accounting?

International Convergence – the process within which the International Accounting Standards Board (IASB) and National Standard-Setters (NSS) are converging their respective financial reporting standards into one global set of accounting regulations.

What do you mean by convergence of accounting standards?

The convergence of accounting standards refers to the goal of establishing a single set of accounting standards that will be used internationally. Convergence in some form has been taking place for several decades, and efforts today include projects that aim to reduce the differences between accounting standards.

What are the arguments against international convergence of accounting standards?

Arguments against accounting standards convergence are (a) the unwillingness of the different nations involved in the process to collaborate based on different cultures, ethics, standards, beliefs, types of economies, political systems, and preconceived notions for specific countries, systems, and religions; and (b) …

What is the need for convergence of IFRS?

The ultimate goal of convergence is to have common acceptable standards, which is practiced world over ensuring transparency & utility of financial information. Indian Scenario – The Institute of Chartered Accountants of India (ICAI) develops Accounting Standards. India officially decided in 2007 to converge with IFRS.

What are the benefits of IFRS convergence?

Benefits of Convergence with IFRS IFRS significantly improves the comparability of entities and provide more consistent financial information. IFRS are accepted as a financial reporting framework for companies seeking admission to almost all of the world’s stock exchanges (including US).

What is the relationship between international accounting and convergence?

The convergence of accounting standards refers to the goal of establishing a single set of accounting standards that will be used internationally, and in particular the effort to reduce the differences between the US Generally Accepted Accounting Principles (US GAAP), and the International Financial Reporting Standards …

What are the advantages of international accounting standards convergence?

The three main advantages of a single set of international accounting standards are (1) an increased comparability between firms, which reduces investor risk and facilitates cross-border financing and investment; (2) a reduction in the cost of preparing consolidated financial statements for multinational firms; and (3) …

How many accounting standards are there?

Learn about accounting standard principles for the accounting of assets i.e AS 28. Know about AS 28 applicability, indicators, Cash Flow Projections, disclosure and much more.

Why is IFRS important?

As a source of globally comparable information, IFRS Standards are also of vital importance to regulators around the world. And IFRS Standards contribute to economic efficiency by helping investors to identify opportunities and risks across the world, thus improving capital allocation.

What are the benefits of convergence?

Technological convergence results in greater benefits from increased diversity in products and services in the telecommunication industry. Using IP technology that connects all telecommunication services with a single network, companies can add services to their previous ones, without new investments in infrastructure.

What do you understand by convergence of IFRS?

On the contrary IFRS, convergence is when the country accounting standard board with the guidance of IASB develops a compatible Accounting Standards. Thus, we can say that countries that are converging with IFRS may sometime deviate from the original IFRS guidelines issued by the IASB.

What is the importance of international accounting standards?

Globally comparable accounting standards promote transparency, accountability, and efficiency in financial markets around the world. This enables investors and other market participants to make informed economic decisions about investment opportunities and risks and improves capital allocation.

How many international accounting standards are there?

The following is the list of IFRS and IAS issued by the International Accounting Standard Board (IASB) in 2019. In 2019, there are 16 IFRS and 29 IAS.

What are the two accounting standards?

The two most influential bodies when it comes to setting accounting standards are: the Financial Accounting Standards Board (FASB) in the United States, and the International Accounting Standards Board (IASB) based in London, England.

What are the 9 accounting standards?

As per the AS 9 Revenue Recognition issued by ICAI “Revenue is the gross inflow of cash, receivables or other consideration arising in the course of the ordinary activities of an enterprise from the sale of goods, rendering of services & from various other sources like interest, royalties & dividends”.

What is IFRS and its advantages?

International Financial Reporting Standards (IFRS) set common rules so that financial statements can be consistent, transparent, and comparable around the world. They specify how companies must maintain and report their accounts, defining types of transactions, and other events with financial impact.

What is an example of technological convergence?

An example of technology convergence is smartphones, which combine the functionality of a telephone, a camera, a music player, and a digital personal assistant (among other things) into one device. A tablet computer is another example of technology convergence.

How can an organization benefit from convergence?

Convergence is key for business success. Convergence helps organizations evolve by synergizing with others to develop better quality, faster, cheaper business solutions.