Only one-fourth Indian companies ready to implement new accounting standards: Survey

NEW DELHI: Only one-fourth of Indian businesses are ready to implement the new accounting standard 'Ind AS 115', which is scheduled to come into effect from April 2016, says a Grant Thornton survey.

A survey of 2,580 businesses found only 26 per cent Indian businesses are expected to be ready for implementation of Indian Accounting Standard (Ind AS 115) by 2016-17, According to Grant Thornton's International Business Report.

"Some of our clients, who have assessed the impact of Ind AS 115 on their financial statements, have identified several accounting complexities in implementation of this new guidance though there is a consensus that the guidance has several benefits in terms of consistent, objective and transparent financial reporting by India Inc," Grant Thornton India LLP Partner Siddharth Talwar said.

The new standards would be mandatory new fiscal onwards.

"Now that companies have started their implementation projects we've learned more about the challenges they face," Grant Thornton's global head of IFRS Andrew Watchman said adding that "our survey backs up what we're hearing from our clients - that many companies are struggling to meet the original deadline."

According to Grant Thornton, some of the industries that will be most affected by planned revenue recognition changes include -- Telecom and IT, real estate and retail.

Other areas that could be affected include deferred and advanced payments, licensing arrangements, breakage and non-refundable upfront fees, it added.