IFRS and Sustainable Financial Reporting
The report evaluates the applicability of IFRS as a global financial language. It discusses the current purview of IFRS adoption and its contribution to the achievement of sustainable financial reporting. The current nature of IFRS integration across the globe is characterised by many variations and flexibility that is subjected to management interpretation of IFRS. However, the potential use of IFRS intends to achieve holistic sustainability along with the application of GRI guidelines. This will lead to not only economic but also social and environmental value creation. The sustainable financial reporting would increase the confidence of different stakeholder groups.
Further the report discusses the use of accounting standards in India for attaining sustainable reporting. It discusses the current standards and their use in sustainable reporting within India for publicly listed companies. Moving ahead to full integration with IFRS, Indian companies will be better placed globally in terms of sustainable reporting – enabling transparency, uniformity, objectivity, verifiability, lowered risk and comparability.
The remarkable acceptance of IFRS by 140+ countries across the globe indicates that it will become a 'de facto' language for financial reporting globally (Pacter 2014). A global, uniform standard in financial reporting is much required to achieve definite reporting structure, sustainable reporting of the business affairs, reduce redundancy, enhance comprehensiveness and comparability. However, while talking about global harmonisation in financial reporting, it should be noted that the disparities in accounting standards are not just inter- economy but intra- economy as well. Within a country, gradation in the standards exists. Thus, it is important to evaluate whether sustainable reporting by adopting a common global standard like IFRS will ensure holistic sustainability in financial reporting. Also, the current and potential usefulness of such reporting should be evaluated. Further, the current and potential usefulness of sustainable reporting standard is evaluated for the chosen country India.