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Impact of IFRS on Indian Infrastructure and Real Estate Industry

Author

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  • Atul Bansal

    (C.Z.Patel College of Business and Management (S.P.University ), Vallabh Vidya Nagar – 388120. Distt. Anand, India)

Abstract

Indian Infrastructure and Real Estate companies are booking revenues even before they start the construction. This is possible under the currently used percentage of completion method of accounting, which allows companies to book revenues provided an agreement of sale has been signed with the buyer and a specified percentage of the project cost has been incurred. As a result, Indian Infrastructure and Real Estate companies’ revenues are higher by as much as 30% as compared to the work done by them. The adoption of International Financial Reporting Standards (IFRS) will reflect more appropriately the revenues of Indian real estate developers and their ability to deliver projects. We also believe that IFRS deals with market risks that are related to real estate projects more effectively than the percentage completion method.

Suggested Citation

  • Atul Bansal, 2011. "Impact of IFRS on Indian Infrastructure and Real Estate Industry," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 2(1), pages 168-176, January.
    • Handle: RePEc:aii:ijcmss:v:2:y:2011:i:1:p:168-176
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    References listed on IDEAS

    as
    1. Karthik Ramanna & Ewa Sletten, 2009. "Why do countries adopt International Financial Reporting Standards?," Harvard Business School Working Papers 09-102, Harvard Business School, revised Mar 2009.
    2. Susana Callao & Cristina Ferrer & José I. Jarne & José A. Laínez, 2009. "The impact of IFRS on the European Union," Journal of Applied Accounting Research, Emerald Group Publishing Limited, vol. 10(1), pages 33-55, May.
    3. Carmona, Salvador & Trombetta, Marco, 2008. "On the global acceptance of IAS/IFRS accounting standards: The logic and implications of the principles-based system," Journal of Accounting and Public Policy, Elsevier, vol. 27(6), pages 455-461.
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