India to adopt IRFS Accounting System

There was a news item today that India has decided to adopt a new accounting system (IRFS) by 2011. IRFS is presently adopted by over 109 countries including China. I was curious on this move, found two references on the Internet to understand this.

1) Accounting in a global world

2) Debits & Credits of IFRS

This is what I understood: Just like how Technology standards and Protocols are vital for the Interconnected world of Internet to work together, it is equally important in globalized world today to have a common way to report financial’s of companies around the world. Without such a standard it brings in huge disparity in disclosure thus creating loopholes to hide facts. All of this affects investor confidence and long term sustenance of the global economy. In short, it is a welcome move provided our government enacts all necessary law framework without delay.