India, Japan sign MoU on IFRS accounting norms

India and Japan have agreed to exchange human resources and technology, among other things, to facilitate each other in adopting International Financial Reporting Standards (IFRS). The Corporate Affairs Ministry and the IFRS Council of Japan have signed a Memorandum of Understanding (MOU) under which the two countries will share each others'' experience on legal and regulatory hurdles arising out of convergence with the IFRS. "We also look forward to establishing cooperation between India and Japan in the field of human resources exchanges, IT, education and XBRL (eXtensible Business Reporting Language) development and so on," Corporate Affairs Secretary R Bandyopadhay said here today.

The MCA, he said, will be signing similar MoUs with countries like Australia, Singapore and Canada. While India is slated to prepare its account books as per the IFRS by 2011, Japan is aiming for large listed companies to converge with the international norms by 2015-16.

The MoU, Bandyopadhay said, can also open doors for Indian chartered accountants to practice their profession in Japan at a later stage. On being asked if IFRS will prevent accounting fraud, he said that although there is no guarantee that business practices will be clean after implementation of the IFRS, it will "bring in more transparency and fairness, as it is the need of the hour".

India was represented by the MCA Secretary and ICAI President Amarjit Chopra, while the Japanese side was led by Noriaki Shimazaki, the Chairman, International Affairs Committee of the IFRS Council.