Indian commerce group pushes back on the implementation of IFRS

The Federation of Indian Chambers of Commerce and Industry (FICCI) is pushing back against the Indian Ministry of Corporate Affairs (MCA) on the adoption of IFRS.  As of now, the MCA wants Indian businesses with a net worth of Rs 1,000 crore to convert to IFRS by April 2011.

As FICCI notes, the standards are still being developed and it doesn't necessarily make sense to implement the standards when they are still undergoing revision.  While they're at it, they're also pushing back on the possible requirement that companies will need to produces parallel statements according to both Indian GAAP and IFRS.

You can read the full article at: Ficci demands delay in implementation of IFRS

Companies not eager to convert to IFRS

A new survey out by KPMG and the Financial Executives Institute reveals that companies don't plan to convert to IFRS until they have to, even if there is an early adoption period.  The survey polled 900 accounting and finance executives.  Here are some of the highlights:

• 75% of companies said they would wait until they were forced to convert before the did so,
• Only about half the respondents expect the SEC to make a decision in 2011, which is the published timeline for making that decision,
• 65% of executives are worried about implementation costs,
• 88% believe the adoption of IFRS by the United States will increase comparability of financial statements around the world,
• 57% say that the convergence of U.S. GAAP and IFRS is the best approach,
• Only 30% would like to see the U.S. establish a specific date for adoption

You can read the full article here: Ready But Not Eager for IFRS

Spotlight on Brazil’s plans to adopt IFRS

Brazil has been the biggest success story in Latin America.  It has an increasing large role in both Latin America and across the globe.  An article at the IFRS Foundation website discusses Brazil's move to full integration of International Financial Reporting Standards with a target of December 2010.

An excerpt from the article:

Brazil has a broad-based economy and a highly developed financial sector” says Alexandre Tombini, Deputy Governor for Financial System Regulation and Organization at the Central Bank of Brazil.”With the increasing global economic and financial integration of our country, it has become clear for us at the Central Bank of Brazil that convergence with internationally accepted accounting standards is of utmost importance. Our belief is that high-quality standards are one of the key ingredients of efficient allocation and use of scarce economic resources and comparable financial information plays a key role in the financial decision-making process of investors”.

“High-quality corporate reporting is essential for attracting and protecting investors not only because of comparability but also due to its close relationship with good governance, accountability and responsibility, enhancing investors’ confidence in the information prepared in such an environment”, says Tombini. “Corporates should, in theory, benefit when they provide comprehensive, relevant and timely information on their financial conditions, performance, and risk management practices. Such businesses should be able to access capital markets more efficiently than similar companies that do not provide information in the same level and thus reducing the cost of capital, and as already said, making the allocation of economic resources more efficient”, he says.

The gradual convergence of Brazilian GAAP with IFRS was set in train in 2006 for financial intermediaries under the supervision of the Central Bank and in 2008 for public companies with a deadline of 2010 for full convergence. In January this year a Memorandum of Understanding was signed between the relevant Brazilian accounting bodies and the IASB which confirmed the end of 2010 as the target date for full convergence and established a framework for future cooperation between the accounting bodies and the IASB.

You can read the full article here.