Convergence to IFRS - Issues for Banking Sector

While regulators, standard setters and law makers sit together to rollout the road map for implementation of international Financial Reporting Standards (IFRS) in India, a wide selection of the industry is already debating the impact and the implementation challenges of transitioning into IFRS.A quite remarkable element of smooth transition into IFRS is the convergence of RBI guidelines with the principles laid down in IFRS. This paper explores the adoption of International Financial Reporting Standards (IFRS) and understanding the impending changes in accounting standards and their impact on valuation of assets specially loan loss provisions and need to create an enabling environment in individual banks. In other word, the successful adoption of IFRS is based on flexibility and acceptability of IFRS by RBI. Banks will have to soon adjust to accounting changes that are enforced by IFRS