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India Grapples With Accounting Principles in Run-Up to IFRS

Recently, an Indian accounting official said business goals sometimes don't me

As India grapples with a planned transition to International Financial Reporting Standards, national accounting officials are weighing

As India grapples with a planned transition to International Financial Reporting Standards, national accounting officials are weighing in with their ideas of how a new financial system might benefit the country. Recently, the chairman of India's National Advisory Committee on Accounting Standards said the goals of business sometimes don't mesh well with accounting principles.

Business objectives can overrule accounting principles in certain situations, M. M. Chitale told the assembled crowd at a meeting of the Confederation of Indian Industry, which can lead to inaccurate or inappropriate accounting disclosures and serious issues for businesses in the long run. According to The Economic Times, Chitale went on to say that having "off balance sheet" items in financial reports is a counterproductive trend that calls into question the credibility of those financial reports.

"How can there be something called off balance sheet when they are relevant to the balance sheet?" he asked the audience. "We have to find some way out to ensure that there is nothing called off balance sheet."

According to Sri Lanka's Daily News, Shamila Jayasekara with international audit firm KPMG recently said IFRS adoption in India will make balance sheets more accurate, bring substance to financial statements and make quarterly and annual reports more comparable to those in other countries.

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