Impact of IFRS Convergence in India: An Evidence of Adoption of Indian Accounting Standards on Selective NBFCs

Abstract

The emerging global market pushed all the economies in the world to switch to International and uniform standards of accounting i.e., IFRS. The present study focuses on adopting the International Financial Reporting Standards (IFRSs) in India on the top 10 non-banking financial companies based on their turnover. The study seeks to determine whether IFRS adoption leads to higher quality financial reporting. The paper attempts to measure the scope and size of the differences in a selected set of financial ratios calculated with data reported according to the traditional Accounting Standards (AS) and under Ind AS/ IFRS provisions. The research study came to a conclusion that in most cases, the computed ratios as per old AS are higher than IFRS inferring that IFRS is more conservative and prudent. However, while doing the hypothesis testing, it is pertinent to say that the differences in the ratios calculated as per old AS and the new standards are not significant.