India is trying to move to the Indian IFRS accounting standards popularly known as Ind AS. This move will not be easy considering that Ind AS is rather different from the current Indian GAAP standards. Here are some highlights in the differences between the two standards that are bound to make the migration challenging.<\/p>\n\n\n\n
Taxonomy<\/strong><\/p>\n\n\n\n Generally, the Indian GAAP\ntaxonomy has an estimation of 2500 elements. This is a small figure compared to\nthe Ind AS element count of 6800.<\/p>\n\n\n\n Scope of Tagging<\/strong><\/p>\n\n\n\n Indian GAAP requires only 300\nmandatory elements to be tagged. Under IGAAP, the accounting treatment of\nacquisition varies widely depending on the legal structure which affects the\nreported amount of goodwill. This is entirely different with Ind AS. This is\nbecause the MCA has expanded the scope of tagging where there are no minimum\ntagging requirements. Under Ind AS, it is not relevant whether an acquisition\nis a legal entity or even a group asset as long as it is an acquired asset.<\/p>\n\n\n\n Validation<\/strong><\/p>\n\n\n\n In the interest of data\ntransparency, there are more elaborate disclosures by corporations to the MCA\nin the Ind AS taxonomy than there are in Indian GAAP. In fact, in INGAAP\nadditional disclosures such as rate reconciliation, tax holidays and even joint\nventures are not required. In IND AS however, the MCA validation tool validates\nmore than 800 mandatory fields of information. This ensures accountable\ndisclosures while also increasing the complexity of tagging.<\/p>\n\n\n\n Records<\/strong><\/p>\n\n\n\n Unique records such as DIN\/PAN\/CIN\/SRN are a necessary provision in the case of Ind AS. Dummy records are unacceptable with all records being centralised. This makes validation more robust considering there is an interlinking of different government databases. This is different in the case of Indian GAAP with dummy records being acceptable without the requisite need of providing unique records.<\/p>\n\n\n\n Why is outsourcing a better option at this stage?<\/strong><\/p>\n\n\n\n There are various benefits that\ncome with outsourcing the audit process at this stage. Outsourcing ensures an\nin-depth analysis of the operations and their compliance with both Ind AS and\nIndian GAAP by the service provider. They also ensure an unbiased appraisal,\nwhich is essential in generating new ideas and proposals for better\nperformance. External auditors also reduce the costs of auditing. The certified\nconsultants are skilled enough and do not require training fixed salary, thus\nsaving costs and resources hugely.<\/p>\n\n\n\n Clearly, Ind AS is vastly\ndifferent from Indian GAAP. These differences make the switch a daunting task.\nHowever, it\u2019s essential to note that in case of cost audits, it is mandatory to\ntag the product headings as per the Central Excise Act with other relevant\ninformation such as net worth, net revenue as per cost books. This demonstrates\nthe necessity of outsourcing the cost auditing to a certified consultant who\nhave demonstrable knowledge of all the aspects involved. Therefore, guidance\nfrom knowledge experts is highly recommended at this transitional stage.<\/p>\n","protected":false},"excerpt":{"rendered":" India is trying to move to the Indian IFRS accounting standards popularly known as Ind AS. This move will not […]<\/p>\n","protected":false},"author":1,"featured_media":4396,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[38,16,74],"tags":[191,193,217,218,240,287],"yoast_head":"\n