General purpose financial statements of a Company that are so often used by various
stakeholders such as the shareholders, prospective investors, regulators, employees,
lenders amongst others, are to be mandatorily prepared in accordance with the
requirements of a financial reporting framework. Such a framework is required to ensure
standardization (to the extent possible) and that these statements are not misleading. The
financial reporting framework varies across the globe. In India itself, we have two different
sets of standards, one for the listed and high net worth companies in the form of Indian
Accounting Standards (Ind AS) and other the being Accounting Standards (AS) for other
entities. Many countries across the globe prepare financial statements using International
Financial Reporting Standards (IFRS) issued by the International Accounting Standards
Board (IASB). Ind AS is a converged version of IFRS. US Generally Accepted Accounting
Principles in the form of Accounting Standard Codification (ASC) is also seen as a
rigorous requirement on the preparation and presentation of financial statements.