With not even a year to go for the April 1, 2011 deadline of International Financial Reporting Standards (IFRS) to be implemented by Indian companies with a net worth of over Rs 1,000 crore, a number of training institutes have sprung all over the country to cater to the demand for trained manpower in the field.
Set up by the International Accounting Standards Board (IASB), the London-based independent body of accounting standards, IFRS have been adapted by over 110 countries already. In India, the ministry of corporate affairs has prepared a roadmap for its implementation as per which BSE 30 and Nifty 50 companies as well as those with shares listed overseas and those with a net worth of over Rs 1,000 crore have to implement the standards by April 1 next year. Companies with a net worth of more than Rs 500 crore and less than Rs 1,000 crore have time till April 1, 2013 while by April 1, 2014, all companies whether listed or not and with a net worth of less than Rs 500 crore will have to switch over to the new accounting standards.
“Eventually, the new standards will create a caste system in the corporate world with big firms adopting them sooner and smaller ones being eventually forced to do so,” says IFRS country leader for Deloitte in India, N.Venkatram. In India, at least 16 firms, including Infosys, Wipro and Tata Motors already publish their accounts in this format while 400 companies are working on this. Among the early converts will be IT companies since their operations are more aligned with global standards, says Venkatram.
Training The Trainers
At the top-most level, the big four audit firms have tied up with various institutes to train professionals in the new way of understanding and deciphering numbers. Deloitte has tied up with the the Indian Institute of Management (IIM) Ahmedabad while PricewaterhouseCoopers has joined hands with IIM, Calcutta. KPMG is offering advanced certificate course in IFRS through NIIT Imperia while E&Y has a tie-up with Get Through Guides (GTG) for this. Some Indian institutes such as Piron Education have approached the Association of Chartered Certified Accountants (ACCA) of the UK to prepare manpower to handle IFRS.
Alethia Education Services, a Delhi-based company has forged a partnership with Kaplan Financial of the UK. According to Alok Bansal, chief executive officer of Alethia, “All the players put together have trained only a few thousand professionals in this field while more than 15,000 is the number needed.” Venkatram of Deloitte puts the number of those with the required expertise at the top level at even less—200.
For a fee of around Rs 45,000 many practising chartered accountants (CAs) are taking these courses which generally last three months, says Bansal. To capitalize on the growing need for trained manpower in accounts and to bridge the huge demand-supply gap, G.S.Grewal, author of many a class XII books on the subject, has recently started the Grewal Academy of Accounting Professionals (GAAP). According to Lalit
Kumar, managing director of the academy, “There are many who go to the Institute of Chartered Accountants to become CAs but there is a crying need for simple accountants in the market.” The students opting for courses from institutes such as GAAP are mostly class XII pass or graduates who gain employable skills through these courses.
More Than The Numbers
Apart from the mere technicalities of switching over to the new system, IFRS will change the way business is looked at, says Venkatram of Deloitte. The concept of fair value in an acquisition will become important and also, the time value of money will have to be looked into. “The new system is a far more sophisticated way of looking at accounts rather than just a black and white way of looking at numbers,” he says.
Ultimately, while the plethora of institutes offering accounting courses will prepare manpower at the junior-most, operational level, much more effort will be needed at the senior, financial officer level and the sooner companies start investing resources in that the better it would be for them.
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