National Seminar on “IND VVPGC COMPARISON OF INDIAN GAAP ...vfgc.in/seminar2016proceeding/papers/1_4_Prabhu_Monya.pdf · COMPARISON OF INDIAN GAAP AND IFRS IN INDIA: AN EMPIRICAL

National Seminar on “IND-AS : A Road Map for IFRS in India”

VVPGC March 18 & 19,2016

ISBN : 978-93-5254-333-5 1

COMPARISON OF INDIAN GAAP AND IFRS IN INDIA: AN EMPIRICAL ANALYSIS

OF SELECTED COMPANIES

Dr. Prabhu M Assistant Professor, Department of Commerce,

JSS College for Women, Kollegal. [email protected]

9845147729

Harshitha R Faculty, Department of Commerce,

Mahadeswara First Grade College, Kollegal. 9482807550

Introduction

This paper sets out to compare Indian GAAP and IFRS in India. Consistent, comparable

and understandable financial information is the lifeblood of commerce and making investment.

The idea of global harmonization of accounting standards stems from the lack of comparability

of financial statements across the country. In particular, a company having presence in different

countries has to prepare financial reports as per Generally Accepted Accounting Principles

(GAAP) of the country of operation and then it is required to reconcile all such reports for the

purpose of consolidation as per GAAP of the country to which the parent belongs. This

increases the cost of preparing the financial reports and also performance Convergence of

Indian Accounting Standards with IFRS. Prospects and Challenges measurement across the

geographical region becomes difficult because of non comparable accounting rules. As global

diversification of portfolio has become an important issue of fund management, therefore, an

attempt has made to create a global financial reporting infrastructure which would help to

increase understandability of financial statements. This would also help in cross border rising of

funds. The expanding globalization of business and investment is driving increased interest as

well as pressure to enhance the quality of financial reporting throughout the world.

1. Review of literature

As evident from the literature review, good number of studies carried out in different

countries have highlighted the benefits of having single set of financial reporting standards

across the globe. Few of the studies have also brought out the procedural aspects of

implementation of IFRS. Some of the studies have given a contradictory view wherein the

articles talk about the difficulties and complications faced in implementing IFRS.



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As mentioned earlier, the available literature on IFRS and its implementation covers the

data from European Union. Few studies have been carried out analyzing the data from other

countries.

Armstrong et al (2010) found out a positive reaction to IFRS adoption events for firms with

high quality pre adoption information, consistent with investors expecting net convergence

benefits from IFRS adoption. In his study of 1084 European Union firms during the period of

(1995-2006),

Cai & Wong (2010) studied the global capital markets summarized that the capital markets

of the countries that have adopted IFRS have higher degree of integration among them after

their IFRS adoption as compared to the period before the adoption.

Paananen & Lin (2009) gave a contrary view to prior research that IFRS adoption ensures

better quality of accounting information. Their analysis of German companies reporting showed

that accounting information quality has worsened with the adoption of IFRS over time. They

also suggested that this development is less likely to be driven by new adopters of IFRS but is

driven by the changes of standards.

Lantto & Sahlstrom (2009) indicated that key financial ratios of companies of Finland found

that the adoption of IFRS changes the magnitude of the key accounting ratios. The study also

showed that the adoption of Fair Value Accounting rules and stricter requirements on certain

Accounting issues are the reasons for the changes observed in Accounting Figures and financial

ratios.

Chand & White (2007) advised that convergence of Domestic Accounting Standards and

IFRS, demonstrated that the influence of Multinational Enterprises and large international

accounting firms can lead to transfer of economic resources in their favor, wherein the public

interests are usually ignored.

Elena et al (2009) concluded that convergence between US Generally Accepted Accounting

Principles (GAAP) and IFRS were of the opinion that the adoption of IFRS in the USA

undoubtedly would mark a significant change for many US companies. It would require a shift

to a more principles-based approach, place for greater reliance on management (and auditor)

judgment, and spur major changes in company processes and systems.

Ali & Ustundag (2009) suggested that development process of Financial Reporting

Standards around the World and its practical results in a developing country, Turkey. They

observe that Turkey has encountered several complications in adaption of IFRS such as complex



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structure of the International standards, potential knowledge shortfalls and other difficulties in

application and enforcement issues.

Epstein (2009) argued that Economic Effects of IFRS adoption emphasized on the fact that

universal financial reporting standards will increase market liquidity, decrease transaction costs

for investors, lower cost of capital and facilitate international capital formation and flows.

Devalle (2010) concluded that with adoption of IFRS by 3721 firms listed on 5 European

Stock Exchanges, influence of earning on share price increased.

Kishori and Bhagat (2012) opined that so many aspects relating to IFRS convergence which

still need to be clarified, such as IFRS first time adoption standard, compliance of comparative

previous period figures with IFRS, changes required to the Companies Act to comply with IFRS,

changes to the Income-Tax Act, the Reserve Bank of India’s requirements for banks, etc.

Jyoti Pohane (2012) observed that real estate industry continues to be a good example of

the differences that can arise from the application and interpretation of apparently

straightforward accounting standards.

2. Objectives of the study are as follows:

The study aims to achieve the following objectives

1) To develop an insight to the global financial reporting language i.e. IFRS.

2) To compare the Indian GAAP and IFRS.

3) To explore the likely beneficiaries of convergence of Indian GAAP with IFRS.

3. Hypothesis for the study

The following hypothesis was tested as a part of research work to achieve the above

objectives by using secondary data.

1) There is a significant difference in financial reporting based on Indian GAAP and IFRS.

4. Research methodology

Data Collection

This study is descriptive in nature. The study is executed on the basis of secondary data. The

main sources of secondary data are company’s manual, annual reports, journals, newspapers

and concerned websites. The annual report data were collected from the websites of Wipro

and Infosys Company. The 5 years annual report data were collected from 2009 to 2013. These

data were used to testing of hypothesis.



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Data Analysis

To analyze the data collected various statistical tools and techniques have been applied in

this study. The annual report data were processed and analysed with statistical tools such as

tables, charts and descriptive statistics. The hypothesis is tested using Levene’s Test for equality

of variances. The data were analyzed with the help of SPSS package 16.

5. Results and Discussion

Comparison of IFRS and Indian GAAP Statement.

Table 1: Comparative Statement of Wipro-2009(Rupees in millions)

Particulars

GAAP

IFRS

Difference

%of change

Goodwill 42209 42635 -426 -1.01

PPE-intangible assets 41583 41344 239 0.57

sale investment 14679 15247 -568 -3.87

Investment equity 1343 1343 0 0

Inventories 6664 6664 0 0

Trade receivable 40453 40353 100 0.25

Unbilled revenue 8514 8514 0 0

Cash and cash equality 39270 39270 0 0

Net tax assets 3632 4486 -854 -23.51

Other assets 13980 15379 -1399 -10.01

Total assets 212327 215235 -2908 -1.37

Share capital 28296 28296 0 0

Share allotment money 40 0 40 0

Retained earnings 87908 94728 -6820 -7.96

Cash flow hedging -1097 -1097 0 0

Other reserves 1807 3658 -1851 -102.43

Total equity 116954 125585 -8631 -7.38

Minority interest 116 0 116 100

Loans and advances 44850 44850 0 0

Trade payable 27873 27873 0 0

Unearned revenue 4269 4269 0 0

Other liability and

provisions

18265 12658 5607 30.7



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Total liability 95373 89650 5723 6

Total liability and equity 212327 215235 -2908 -1.37

Source: Annual Report of Wipro-2009.

Table 1 demonstrates the Comparative Statement of Wipro for the year 1.4.2009 it is

observed that, 1.37% increase in the Total assets value as per IFRS when compared with the

total assets value as per Indian Accounting standards. There is increase in the value of Net tax

asset including deferred taxes in IFRS reporting by 23.51% when compared with the amount

reported under Indian This adjustment had no impact on equity. There is 10.01% increase in

Other assets in IFRS compared to Indian Accounting standards. The total equity has increased

by nearly 7.38% in IFRS when compared to the Indian accounting standards. The total liability

has decreased by 6% in IFRS when compared to Indian accounting standards.

Table 2: Comparative Statement of Wipro-2010(Rupees in millions)

Particulars

GAAP

IFRS

Difference

%of change

Goodwill 11728.45 9578.95 2149.5 18.32

PPE-intangible assets 100.54 120.01 -19.47 -19.36

sale investment 2041.37 2388.87 -347.5 -17.02

Investment equity 20.66 7.59 13.07 63.26

Inventories 316.51 314.13 2.28 0.720

Trade receivable 814.17 765.02 49.15 6.03

Unbilled revenue 24.11 16.26 7.85 32.55

Cash and cash equality 1246.30 1096.13 150.17 12.04

Net tax assets 1.24 1.24 0 0

Other assets 5167.11 4441.81 725.3 14.03

Total assets 21460.46 18730.01 2730 12.72

Share capital 790.18 781.84 8.34 1.05

Share allotment money 2367.72 1876.74 490.98 20.73

Retained earnings 179.89 157.09 22.8 12.67

Cash flow hedging 90.80 105.38 -14.58 -16.05

Other reserves 1213.59 852.03 388.56 32.02

Total equity 4642.18 3773.08 869.25 18.72

Minority interest 144.75 119.63 25.12 17.35

Loans and advances 1771.56 1538.37 233.19 13.16

Other liability and 12176.10 13298.93 991.95 8.14



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provisions

Total liability 16818.28 14956.93 1861.2 11.06

Total liability and equity 21460.46 18730.01 2730 12.72

Source : Annual Report of Wipro-2010.

Table 2 demonstrates the Comparative Statement of Wipro for the year 1.4.2010 it is

observed that, 12.72% decrease in the Total assets value as per IFRS when compared with the

total assets value as per Indian Accounting standards. There is no increase in the value of Net

tax asset including deferred taxes in IFRS reporting by 0.00. when compared with the amount

reported under Indian Accounting Standard. There is 14.03%decrease in Other assets in IFRS

reporting compared to Indian Accounting standards. This adjustment had no impact on equity.

The total equity has decreased by nearly 18.72% in IFRS when compared to the Indian

accounting standards. The total liability has decreased by 11.06% in IFRS when compared to

Indian accounting standards.

Table 3: Comparative Statement of Wipro-2011(Rupees in millions) Source: Annual Report of Wipro-2011.

Particulars

GAAP

IFRS

Difference

%of change

Goodwill 67961 67931 30 0.04

PPE-intangible assets 1767 4229 -2462 -139.33

sale investment 3232 3232 0.00 0.00

Investment equity 3466 3436 30 0.86

Inventories 10662 10662 0.00 0.00


Unbilled revenue 440 2597 -2157 -490,23

Cash and cash equality 77666 77666 0.00 0.00

Net tax assets 22893 10287 12606 55.06

Other assets 35566 25743 9823 27.62

Total assets 304490 286111 18379 6.03

Share capital 4915 4917 -2 -0.04

Share allotment money 26525 28124 -1599 -6.03


Cash flow hedging 2251 2281 -30 -1.33

Other reserves 28368 1121 27247 96.05

Total equity 62334 36796 25538 40.96

Minority interest 849 - 0.00 0.00



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Loans and advances 22893 10287 12606 55.06

Other liability and

provisions

218414 239028 -20614 -9.43

Total liability 242156 249315 -7159 -2.95

Total liability and equity 304490 286111 18379 6.03

Table 3 demonstrates the Comparative statement of Wipro for the year 1.4.2011 it is

observed that, 6.03% decrease in the Total assets value as per IFRS when compared with the

total assets value as per Indian Accounting standards. There is decrease in the value of Net tax

asset including deferred taxes in IFRS reporting by 55.06%when compared with the amount

reported under Indian Accounting Standard. There is 27.62% decrease in Other assets in IFRS

reporting compared to Indian Accounting standards. The total equity has decreased by nearly

40.96% in IFRS when compared to the Indian accounting standards. The total liability has

increased by 2.95% in IFRS when compared to Indian accounting standards.

Table 4: Comparative Statement of Wipro-2012 (Rupees in millions)

Particulars

GAAP

IFRS

Difference

%of change

Goodwill 54282 54756 -474 -0.87


sale investment 49448 53607 -4159 -8.41

Investment equity 67674 69171 -1497 -2.21

Inventories 3263 3263 0.00 0.00


Unbilled revenue - 31988 0.00 0.00

Cash and cash equality 84838 84838 0.00 0.00

Net tax assets 1022 4235 -3213 -314.38

Other assets 47552 41377 6175 12.98

Total assets 385048 421584 -36536 -9.48

Share capital 51691 18146 -33545 -64.90

Share allotment money 35480 36448 968 27.28

Retained earnings 10000 10000 0.00 0.00

Cash flow hedging 24566 24566 0.00 0.00

Other reserves 9876 9876 0.00 0.00

Total equity 131613 99036 32577 24.75

Minority interest 1171 - - 0.00

Loans and advances 121036 95487 25549 21.11



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Other liability and

provisions

131228 227061 -95833 -73.04

Total liability 253435 322548 -69113 -27.27


Source: Annual Report of Wipro-2012.

Table 4 demonstrates the Comparison Statement of Wipro for the year 1.4.2012 it is


total assets value as per Indian Accounting standards. There is increase in the value of Net tax

asset including deferred taxes in IFRS reporting by 314.38% when compared with the amount

reported under Indian Accounting Standard. There is 12.98% decrease in Other assets in IFRS


The total equity has decreased by nearly 24.75% in IFRS when compared to the Indian

accounting standards. The total liability has increased by 27.47% in IFRS when compared to


Table 5: Comparative Statement of Wipro-2013 (Rupees in millions).

Particulars

GAAP

IFRS

Difference

%of change

Goodwill 56521 56143 378 0.67


sale investment 16426 16293 133 0.81

Investment equity 1670 1670 0 0

Inventories 7587 7587 0 0


Unbilled revenue 14108 14108 0 0

Cash and cash equality 49117 49117 0 0

Net tax assets 2672 5759 -3087 -115.53

Other assets 20984 23203 -2219 -10.57

Total assets 2072018 277290 -5272 -1.94


Share allotment money 15 15 0 100


Cash flow hedging -6886 -14533 -2353 -13.98

Other reserves 3546 5601 -2055 -57.95

Total equity 136299 147381 -11082 -8.13



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Minority interest 237 - - -

Loans and advances 56892 56892 0 0

Trade payable 40191 40191 0 0

Unearned revenue 8734 8734 0 0

Other liability and

provisions

29665 24092 5573 18.79

Total liability 135719 129909 5810 11.28


Source : Annual Report of Wipro-2013.

Table 5 highlights the Comparison Statement of Wipro for the year 1.4.2013 it is observed

that, 1.94% increase in the Total assets value as per IFRS when compared with the total assets

value as per Indian Accounting standards. There is increase in the value of Net tax asset

including deferred taxes in IFRS reporting by 115.53% when compared with the amount

reported under Indian Accounting Standard. There is 10.57% increase in Other assets in IFRS


The total equity has increased by nearly 8.13% in IFRS when compared to the Indian accounting

standards The total liability has decreased by 11.28% in IFRS when compared to Indian

accounting standards.

Table 6: Comparative Statement of Infosys – 2009 (Rupees in millions)

Particulars

IGAAP

IFRS

Difference

% 0f change

Cash 16666 16213 453 2.71

sale of financial asset 21 20 1 4.76

Investments 123 146 -23 -18.69


Unbilled revenue 1243 1242 1 0.08

Deferred financial

instrument

66 63 3 4.76

Other current asset 917 916 1 0.10

Total current asset

23689 23121 568 2.39

Plant and machinery 4844 4846 -2 -0.04

Goodwill 825 744 81 9.81

Intangible asset 48 56 -8 -14.28



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Sale of financial asset 23 41 -18 -78.26

Deferred income tax

asset

378 392 -14 -3.70

Income tax asset 993 983 10 1.00

Other noncurrent asset 463 471 -8 -1.72

Total noncurrent asset 7574 7533 41 0.54

Total assets 31263 30654 609 1.94

Trade payable 44 40 4 9.09

Deferred financial asset - - - -

Current income tax

liability

817 816 1 2.31

Client deposit 22 24 -2 1.42

Unearned revenue 518 506 12 .54

Employee benefit 140 138 2 0.09

Provisions 88 92 -4 2.31

Other current liability 2012 2014 -2 4.54

Total current liability 3641 3630 11 0.09

Deferred income tax

liability

- - - -

Employee benefit 259 300 -41 -0.30

Other non-current

liability

60 46 14 15.83

Total liability 3960 3976 -16 -23.55

Share capital 286 216 70 0.40

Share premium 26908 26360 548 24.47

Retained earnings 109 102 7 2.03

Other equity 3082 - - -

Total liability and equity

31263 30654 609 1.94

Source: Annual Report of Infosys-2009.

Table 6 shows the Comparison Statement of Infosys for the year 1.4.2009 it is observed

that, 1.94% decrease in the Total assets value as per IFRS when compared with the total assets

value as per Indian Accounting standards. There is decrease in the value of income tax asset

including deferred taxes in IFRS reporting by 1.00% when compared with the amount reported

under Indian Accounting Standard. There is 1.72% increase in Other assets in IFRS reporting

compared to Indian Accounting standards. This adjustment had no impact on equity. The total



ISBN : 978-93-5254-333-5 11

equity and liability has decreased by nearly1.94% in IFRS when compared to the Indian



Particulars

IGAAP

IFRS

Difference

% 0f change

Cash 20591 20623 -32 -0.15

sale of financial asset 32 34 -2 -6.25

Investments 345 245 100 28.98


Unbilled revenue 1873 1763 110 5.87

Deferred financial

instrument

- - - -

Other current asset 1523 1560 -37 -2.42

Total current asset 30246 29987 439 1.45

Plant and machinery 5409 5620 -24 3.90

Goodwill 993 886 107 10.77

Intangible asset 173 143 30 17.34


Deferred income tax

asset

316 314 2 0.63



Total noncurrent asset 8102 8181 -79 0.07

Total assets 38348 38168 180 0.46

Trade payable 23 24 -1 -4.34

Deferred financial asset 42 45 -3 -7.14

Current income tax

liability

1054 1093 31 2.94

Client deposit 15 22 -7 -46.66

Unearned revenue 15452 546 -1 -0.18


Provisions 133 149 -16 -12.03

Other current liability 2456 2543 -87 -3.54

Total current liability 4766 4864 -98 -2.05

Deferred income tax 12 17 -5- -41.66



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liability

Employee benefit - - - -

Other non current

liability

109 108 1 0.91

Total Liability 4887 4987 -100 -2.04

Share capital 286 243 43 15.03

Share premium 32905 3272- 185 0.56

Retained earnings - - - -

Other equity 270 218 52 19.25

Total liability and equity 38348 38168 180 0.46


Table 7 demonstrates the Comparison Statement of Infosys for the year 1.4.2010 it is observed

that, 0.46% decrease in the Total assets value as per IFRS when compared with the total assets



under Indian Accounting Standard. There is 7% increase in Other assets in IFRS reporting


equity and liability has decreased by nearly 0.46% in IFRS when compared to the Indian


Table 8: Comparative Statement of Infosys - 2011(Rupees in millions)

Particulars

IGAAP

IFRS

Difference

% 0f change

Cash 16263 16666 403 2.41

sale of financial asset 24 21 -3 -14.28

Investments 115 123 8 6.50


Unbilled revenue 1432 1243 -139 -15.20

Deferred financial

instrument

64 66 2 3.03


Total current asset 23005 23689 684 2.88

Plant and machinery 3240 4844 1604 33.11

Goodwill 740 825 85 10.30

Intangible asset 56 48 -8 -16.66


Deferred income tax 376 378 2 0.52



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asset

Income tax asset 983 993 -10 -1.00

Other noncurrent asset 510 463 47 10.15


Total assets 28592 31263 -2311 -7.39

Trade payable 48 44 4 9.09

Deferred financial asset 123 100 23 23.00

Current income tax

liability

615 817 202 24.72

Client deposit 30 22 8 36.36

Unearned revenue 510 518 8 1.54


Provisions 76 88 -12 -15.78

Other current liability 2150 2102 43 22.83

Total current liability 3714 3741 -27 -0.72

Deferred income tax

liability

- - - -


Other non current

liability

56 60 4 6.66

Total liability 4070 4060 10 0.24


Share premium 2461 3082 621 621


Other equity 96 109 13 11.92



Table 8 depicts the Comparison Statement of Infosys for the year 1.4.2011 it is observed


value as per Indian Accounting standards. There is increase in the value of income tax asset


under Indian Accounting Standard. There is 10.15% decrease in Other assets in IFRS reporting


equity and liability has increased by nearly7.39% in IFRS when compared to the Indian




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Table 9: Comparative Statement of Infosys - 2012(Rupees in millions)

Particulars

IGAAP

IFRS

Difference

% 0f change

Cash 12111 12142 -3 -0.25


Investments 1190 1200 -10 -0.08

Trade receivable 3494 3498 -4 -0.01

Unbilled revenue 841 964 -123 -14.02

Deferred financial

instrument

95 123 28 29.47

Other current asset 641 714 -73 -11.38

Total current asset 20890 21057 -167 -0.07

Plant and machinery 4439 4512 -73 1.64

Goodwill 829 800 29 3.49

Intangible asset 56 72 -16 28.57

Sale of financial asset 38 46 -8 21.05

Deferred income tax

asset

346 312 34 9.82

Income tax asset 667 736 -69 -10.34


Total noncurrent asset 6722 6893 -171 -2.54

Total assets 27612 27950 -338 -12.24

Trade payable 10 26 -16 -1.6

Deferred financial asset 100 96 4 4.00

Current income tax

liability

724 742 -18 -2.48

Client deposit 8 10 2 2.50



Provisions 82 62 20 24.39

Other current liability 1707 1340 367 21.49


Deferred income tax

liability

114 120 -6 -5.26


Other non-current 61 64 3 4.91



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liability

Total liability 3539 3203 336 9.49

Share capital 286 218 0.8 23.72

Share premium 3047 3063 -16 -0.52


Other equity 72 78 6 8.33



Table 9 demonstrates the Comparison Statement of Infosys for the year 1.4.2012 it is


total assets value as per Indian Accounting standards. There is increase in the value of income

tax asset including deferred taxes in IFRS reporting by 10.34% when compared with the amount

reported under Indian Accounting Standard. There is 19.59% increase in Other assets in IFRS


The total equity and liability has increased by nearly12.24% in IFRS when compared to the



Particulars

IGAAP

IFRS

Difference

% 0f change

Cash 105215 130541 -25326 -24.07


Investments 20485 24260 -3775 -18.42

Trade receivable 9739 11325 -1586 -16.28

Unbilled revenue 5402 5590 188 -3.48

Deferred financial

instrument

3999 3662 337 8.42


Total current asset

148891 179283 -30392 -20.40

Plant and machinery 30673 28132 2591 8.28

Goodwill 18669 13744 5125 0.27

Intangible asset 198 188 10 5.05

Sale of financial asset 240 230 10 41.66

Deferred income tax

asset

8757 6949 1808 20.64



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Other noncurrent asset - - - -


Total assets 207753 246786 -39033 -18.78

Trade payable 13560 25886 -12326 -90.889

Deferred financial asset 15001 - - -

Current income tax

liability

1954 1482 472 24.15

Client deposit 6782 5224 1558 22.97



Provisions 80 270 -190 -23.75

Other current liability 100 100 - -


Deferred income tax

liability

830 717 113 13.61

Employee benefit - - - -

Other non current

liability

10771 9655 1116 10.36

Total liability 51531 45730 5801 11.25

Share capital 32439 48672 16283 50.04

Share premium 4237 2226 2011 47.46


Other equity - - - -



Table 10 shows the Comparison Statement of Infosys for the year 1.4.2013 it is observed




under Indian Accounting Standard. There is 0.00% no increase in Other assets in IFRS reporting

compared to Indian Accounting standards. The total equity and liability has increased by

nearly18.78% in IFRS when compared to the Indian accounting standards.



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Testing of Hypothesis

To examine whether there exists differences in Financial reporting based on Indian GAAP

and IFRS, the following null and alternative hypotheses are postulated.

H0: There is no significant difference in financial reporting based on Indian GAAP and IFRS.

Ha: There is a significant difference in financial reporting based on Indian GAAP and IFRS.

The above hypothesis is tested using group statistics and Levine’s Independent Samples t -

Test and the results are as under:

Table 11: Group Statistics

Reporti

ng N

M

ean

Std.

Deviation Std. Error Mean

Goodwill

IGAAP 5 4.

6540E4

21500.

11477 9615.14363

IFRS 5 4.

6209E4

22350.

13919 9995.28611

PPE_IA

IGAAP 5 2.

0063E4

27014.

90107 12081.43104

IFRS 5 2.

0139E4

25208.

18624 11273.44361

Sale_Investm

ent

IGAAP 5 1.

7165E4

19181.

83437 8578.37712

IFRS 5 1.

8154E4

20856.

86090 9327.47175

Investment_E

quity

IGAAP 5 1.

4835E4

29563.

61801 13221.25191

IFRS 5 1.

5126E4

30237.

06116 13522.42484

Inventories

IGAAP 5 5.

6985E3

4001.0

1335 1789.30757

IFRS 5 5.

6980E3

4001.8

1378 1789.66553

Trade_Receiv

ables

IGAAP 5 4.

9834E4

32303.

61704 14446.61672

IFRS 5 4.

9641E4

32193.

66667 14397.44542

Unbilled_Rev

enue

IGAAP 4 5.

7715E3

6794.0

1508 3397.00754

IFRS 5 1.

1445E4

12714.

16907 5685.94926

Cash_Cash_E

quality

IGAAP 5 5.

0427E4

33432.

82834 14951.61537

IFRS 5 5.

0397E4

33488.

07681 14976.32324

Net_Tax_Asse

ts

IGAAP 5 6.

0440E3

9523.8

1701 4259.18045

IFRS 5 4.

9536E3

3686.2

8302 1648.55588

Other_Assets

IGAAP 5 2.

4650E4

16959.

74733 7584.62958

IFRS 5 2.

2029E4

13629.

46191 6095.28067

Total_Assets

IGAAP 5 5.

9907E5

8.3447

0E5 3.73186E5

IFRS 5 2.

4379E5

1.4662

1E5 65571.11048



ISBN : 978-93-5254-333-5 18

Table 12: Independent Samples Test

Levene's Test for

Equality of Variances t-test for Equality of Means

F Sig. t d

f

S

ig. (2-

tailed)

Mean

Difference

Std. Error

Difference

95% Confidence Interval of the Difference

Lower Upper

Goodwill

Equal

variances

assumed

.00

3 .960

.

024 8

.

982

331.5000

0 13869.27292

-

31651.10071 32314.10071

Equal

variances not

assumed

.

024

7

.988

.

982

331.5000

0 13869.27292

-

31659.46394 32322.46394

PPE_IA

Equal

variances

assumed

.10

6 .753

-

.005 8

.

996 -76.29400 16524.27023

-

38181.32949 38028.74149

Equal

variances not

assumed

-

.005

7

.962

.

996 -76.29400 16524.27023

-

38213.03127 38060.44327

Sale_Investm

ent

Equal

variances

assumed

.02

3 .882

-

.078 8

.

940

-

988.30000 12672.42215

-

30210.95789 28234.35789

Equal

variances not

assumed

-

.078

7

.945

.

940

-

988.30000 12672.42215

-

30246.48153 28269.88153

Investment_E

quity

Equal

variances

assumed

.00

2 .967

-

.015 8

.

988

-

290.78600 18911.83427

-

43901.55403 43319.98203

Equal

variances not

assumed

-

.015

7

.996

.

988

-

290.78600 18911.83427

-

43905.40416 43323.83216

Inventories

Equal

variances

assumed

.00

0 1.000

.

000 8

1

.000 .47600 2530.71616

-

5835.36593 5836.31793

Equal

variances not

assumed

.

000

8

.000

1

.000 .47600 2530.71616

-

5835.36597 5836.31797

Trade_Receiv

ables

Equal

variances

assumed

.00

0 .994

.

009 8

.

993

193.6300

0 20395.86158

-

46839.31113 47226.57113

Equal

variances not

assumed

.

009

8

.000

.

993

193.6300

0 20395.86158

-

46839.40630 47226.66630

Unbilled_Rev

enue

Equal

variances

assumed

.94

2 .364

-

.799 7

.

451

-

5673.12450 7104.16715

-

22471.81043 11125.56143

Equal

variances not

assumed

-

.857

6

.296

.

423

-

5673.12450 6623.41900

-

21697.33692 10351.08792

Cash_Cash_E

quality

Equal

variances

assumed

.00

0 .998

.

001 8

.

999 30.03400 21162.25555

-

48770.21480 48830.28280

Equal

variances not

assumed

.

001

8

.000

.

999 30.03400 21162.25555

-

48770.23796 48830.30596

Net_Tax_Asse

ts

Equal

variances

assumed

2.2

95 .168

.

239 8

.

817

1090.400

00 4567.09476

-

9441.33941 11622.13941

Equal

variances not

assumed

.

239

5

.172

.

820

1090.400

00 4567.09476

-

10533.08867 12713.88867

Other_Assets

Equal

variances

assumed

.57

8 .469

.

269 8

.

794

2621.060

00 9730.31615

-

19817.08927 25059.20927



ISBN : 978-93-5254-333-5 19

Equal

variances not

assumed

.

269

7

.646

.

795

2621.060

00 9730.31615

-

19999.24405 25241.36405

Total_Assets

Equal

variances

assumed

4.3

88 .070

.

938 8

.

376

3.55279E

5 3.78903E5

-

5.18474E5 1.22903E6

Equal

variances not

assumed

.

938

4

.247

.

399

3.55279E

5 3.78903E5

-

6.73052E5 1.38361E6

With F value (i.e., 0.003, 0.106, 0.023, 0.002, 0.000. 0.000, 0.492, 0.000, 2.295, 0.578,

4.388) and observed p value of 0.960, 0.753, 0882, 0.967, 1.000, 0.994, 0.364, 0.998,

0.168, 0.469, 0,070 which are greater than 0.05, it is necessary to consider the t value and

p value under “equal variance assumed”. The observed t value and p value are 0.024, -

0.078, -0.015, 0.000, 0.009, -0.799, 0.001, 0.239, 0.269, 0.935 and 0.892, 0.996, 0.940,

0.988, 1.000, 0.993, 0.817, 0.794, 0.376 respectively (p>0.05). Hence, there is no

significant difference in financial reporting based on Indian GAAP and IFRS.

It can be inferred from the above analysis that there is no significant difference in

financial reporting based on Indian GAAP and IFRS. Therefore, the null hypothesis, “There

is no significant difference in financial reporting based on Indian GAAP and IFRS” is proved

and the alternative hypothesis, “There is a significant difference in financial reporting

based on Indian GAAP and IFRS” is not proved.

6. Suggestions

The study found that the total assets value is increased as per IFRS when compared to

Indian Accounting standards. The results of the study evidenced that there is no

significant difference in financial reporting based on Indian GAAP and IFRS. It leads to

easy adoption of IFRS.

7. Conclusion

The study authorizes companies going international or even global has given rise to the

need to develop accounting standards that ensure uniformity and standardization of

reporting financial information. The IASC in its capacity developed accounting standards

which seeks to satisfy the need for a universal accounting financial reporting system.

However, in the year 2001, the IASB which succeeded the IASC developed the IFRS

which complement the IAS. A successful transition requires a well thought of plan. There

is a growing International consensus on the IFRS on accepted standards for assessment

of the financial health of a company across the globe. Indian industry has an opportunity

to have a financial accounting framework that is truly global in nature and is expected to

provide enhanced access to capital markets globally.



ISBN : 978-93-5254-333-5 20

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Documents

National Seminar on “IND VVPGC COMPARISON OF INDIAN GAAP ...vfgc.in/seminar2016proceeding/papers/1_4_Prabhu_Monya.pdf · COMPARISON OF INDIAN GAAP AND IFRS IN INDIA: AN EMPIRICAL