ABSTRACT

Purpose: The research paper aims to bring out the significant changes required in the regulatory
framework for financial reporting in India after convergence with International Financial
Reporting Standards (IFRS) till 2011. The findings are based on a case analysis done on RITES,
a government of India enterprise.

Design/Methodology/Approach – The paper begins with an introduction of existing system for

financial reporting in India, followed by a literature review including the concepts, need and
benefits of IFRS. The paper also evaluates the existing Indian generally accepted accounting
principles (GAAP) and IFRS and gives information about the timeline for the IFRS conversion
project for Indian firms. The paper concludes with the findings based on RITES balance sheet,
Income statement and cash flow statement analysis. It mentions the changing role of regulators,
CFOs and the major challenges that a government of India enterprise like RITES faces under the
changing regulatory structure from Indian GAAP to IFRS.

Findings –

1. The convergence of Indian GAAP with IFRS would pose various challenges on the tax
and regulatory front, which companies, investors and regulators will have to grapple
with. It is expected to have a significant impact on all stakeholders, such as chartered
accountants, regulators, financial analysts, economists, investors, industrialists and
accounting professionals and so on. There are numerous standards that have conceptual
differences, which require changes in regulations. The finding mainly defines the
responsibility of internal auditors, Regulators, Chief financial officers of the company as
a catalyst to implement IFRS. 

2. The convergence of Indian GAAP with IFRS at RITES Ltd., which mainly operates in
infrastructure consultancy business, is going to affect its financial statements mainly
because of modifications required in export sales, inspection fees, lease services,
depreciation and work in progress (WIP) of Consultancy Projects.

Originality/Value – This paper contributes to different stakeholders in the process of regulatory

restructuring and strengthening the overall health of the Indian economy. The paper suggests the
certain regulatory amendments, which are needed in Financial Reporting in India after adopting
IFRS. Also by modifying the Balance Sheet of RITES Ltd, impact on organizations can be
observed with more lucidity.

Key words:  Financial Reporting, Regulatory Framework, Indian GAAP, U. S. GAAP and
IFRS.