5. Summary, conclusions and suggestions
Increasing globalization and integration of capital market across the globe as made universal language of accounting very essential. Because Indian companies are raising capital and diversifying all over the globe, IFRS implementation in India is imperative This project attempts to find out impact on financial activities on Indian companies due to IFRS. The study has two main objectives: first, to find the impact on financial activities on Indian companies due to IFRS adoption. The second is to highlight key impact areas for major sectors in India.
The first chapter of the project gives introduction to the project along with highlighting the IFRS implementation status worldwide. The chapter states out the need, significance and scope of the projects along with project objectives. It also states the statement of problem. The last part of first chapter deals with theoretical background to the study. Theoretical background gives overview of IFRS and its history, ICAI and its effort to converge with IFRS. The last part of theoretical background gives summaries of major IFRS standards and recent developments in the field of IFRS.
The second chapter of the project deals with review of research and literature. It throws light on various studies done in the field of IFRS. The first part of this chapter gives overview of IFRS, its implementation in India. The next part of the chapter reviews studies done in India. Studies done in European Union and other parts of the globe have also been used.
The third chapter of the project deals with data methodology and design of the study. It includes nature of the study, data analysis and measurement, companies under sample and tools used in data collection. It also states the limitations of the project.
The fourth chapter of the project is data analysis and findings of the study. It interprets the results of various analyses done.
This chapter summarizes the entire project along with conclusions and suggestions for further study.
First part of the project empirically tests the impact of IFRS on financial activity due to IFRS adoption with a sample of eight companies. The results of the study on impact of financial activity on Indian companies showed changes in the ratios calculated under IFRS and Indian GAAP both in absolute value and in some cases statistically. The reason for the difference could be assigned to the more rigorous accounting norms under IFRS.
In the first hypothesis, the study shows that there is no statistical evidence regarding improvement in financial risks of the company after IFRS adoption when the financial indicators are tested using the data based on both Indian GAAP and IFRS. The study showed significant difference in the profitability of the company which is calculated using ROE. However, IFRS is not likely to impact the liquidity and leverage of the firm as statistical evidence showed that there is no significant...