Managing the ifrs changeover: Convergence of Ind as 16 with IAS 16

In the era of increasing globalization, the Indian companies have seen a transition from local operations to business combinations outside India. In such a scenario, the uniformity of financial reporting by Indian companies is inevitable for the authenticity of their financial statements worldwide. The emergence of International Financial Reporting Standards (IFRS) marks the biggest revolution in financial reporting, though, not without posing challenges of convergence. In accordance with the commitment of Dr. Manmohan Singh in the G20 Summit, the Ministry of Corporate Affairs issued guidelines notifying the convergence of 35 Indian Accounting Standards (Ind AS) with IFRS. With reference to this convergence, the paper provides an insight on the revised framework of AS 6- Depreciation and AS 10 - Fixed Assets with the formation of new Ind AS 16- Property, Plant and Equipment through a comparative analysis. The differences in the accounting treatment of various fixed assets, especially, property, plant and equipment, are also elaborated. Moreover, it throws light on the issues of recognition of assets through different models of measurement, determination of their carrying amounts; and the depreciation charges and impairment losses to be recognised in relation to the assets. The study also shows the convergence of Ind AS 16 with IAS 16/IFRS. The analysis shows that adaptation to IFRS convergence opens new avenues for the accounting profession followed by unforeseeable challenges.