SMEs to be exempt from IFRS:

Small
and medium enterprises (SMEs) in the country will not have to prepare their
accounts as per the International Financial Reporting Standards (IFRS) from
April 1, 2011, saving them significant cost of switching to the more rigorous
accounting standards. A government-constituted core panel on IFRS has decided to
exempt SMEs from the first phase of convergence falling due in 2011.

Convergence to IFRS is a costly exercise which includes an overhaul of
operational and IT processes apart from training costs. A small enterprise, for
this exemption, is likely to be one where the investment in plant and machinery
is more than Rs 25,00,000 but does not exceed Rs 5 crore.

A medium
enterprise is one where investment in plant and machinery is more than Rs 5
crore but does not exceed Rs 10 crore.

Recently, a core committee of the government finalised the road map for IFRS
convergence in India. The ICAI has said that all entities having net worth in
excess of Rs 1,000 crore will have to follow IFRS. The list also includes all
NSE and BSE listed companies, entities having foreign borrowings of more than Rs
500 crore, insurance entities, mutual funds, venture capital funds and all
scheduled banks having operations outside India.

(Source:
The Economic
Times dated 25.01.2010)