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Accounting Norms Shift: ICDS vs. IndAS Clash
23 Feb
Summary
- New accounting norms are being introduced for overseas business operations.
- Differences between ICDS and IndAS require modification or reconciliation.
- Amending IndAS is difficult due to alignment with international standards.
New accounting norms are on the horizon for companies managing overseas business operations. This development highlights potential discrepancies between India's Income Computation and Disclosure Standards (ICDS) and Indian Accounting Standards (IndAS).
According to experts, areas where ICDS and IndAS already align present no immediate issues. However, divergences necessitate a clear path forward.
Possible solutions include revising ICDS to match IndAS, amending IndAS itself, or implementing a reconciliation process for differing treatments.
Amending IndAS is particularly challenging. This is because IndAS is designed to align with International Financial Reporting Standards (IFRS). This alignment is vital for ensuring Indian companies' financial statements are recognized and comparable on a global scale.
