Implementation of the International Financial Reporting Standards, seem to have hit a roadblock due to differences between the Finance Ministry and Ministry of Corporate Affairs, reports CNBC-TV18's Aakansha Sethi quoting sources.
CNBC TV18 had first broken this story where it was reported that the Ministry Of Corporate Affairs would be passing an ordinance to implement IFRS. The Minister for Corporate Affairs Salman Khurshid had also told CNBC-TV18 in an interview that IFRS would be implemented from the April 1, 2011. However this may not be possible now because of differences between the Finance Ministry and the Ministry of Corporate Affairs.
Sources close to the development said there are two key differences. One is that the finance ministry says that implementation from April 1, 2011 is not possible because the accounting norms have not been notified as yet. This will only be done by December and in three months from January to March is too little to educate stakeholders and that will require a longer period of time. So April 1, 2011 is not possible.
Secondly, the finance ministry says that these norms should only be for shareholder disclosures and taxation will be based on real income and not on the economic entity model as is proposed in the IFRS norms.
The Finance Ministry will now be writing to the Ministry of Corporate Affairs and this matter will now be taken up by the Committee of Secretaries which will meet in November to decide on the matter.
