The Hindu Business Line : Coping with global accounting standards

What impact will a switchover to global accounting standards in 2011, as aspired for by the Institute of Chartered Accountants of India, have on the different industries? Ernst & Young ( www.ey.com ) explores this question in ‘Thinking IFRS?’

For starters, the abbreviation stands for International Financial Reporting Standards, the new series of pronouncements from the IASB (International Accounting Standards Board), though in a broader context, IFRS refers to the entire body of the Board’s pronouncements.

“IFRS is principle-based, drafted lucidly and easy to understand and apply,” elucidates the EY guide. “However, the application of IFRS requires an increased use of fair values for measurement of assets and liabilities. The focus in IFRS is more towards getting the balance sheet right and hence brings significant volatility in the income statement.”

The recent publication deals with the impact of ‘standards shift’ on industries such as telecom, mutual funds, venture capital funds, banking, technology, extractive, pharmaceuticals, media and entertainment, real estate and infrastructure, power and retail.

“The aim of IFRS is to present fairly the position, performance and cash flows of an entity. The Reserve Bank of India, however, sets prudential norms on banks and so the requirements of the RBI are not fully in compliance with IFRS.”

Recommended read for the finance professional.

’Warning signals’

In the busy urban life, we often fail to notice the fact that our stress levels overshoot the OSL (optimum stress level), write Meena Hariharan and Radhanath Rath in ‘Coping with Life Stress: The Indian experience’ ( www.sagepublications.com ). “When one remains in the arousal zone for a long duration, the bio-psychological system sends several signals,” they caution, in this new book. It is desirable, therefore, to take a conscious note of these signals and initiate action to manage stress.

The authors discuss the ‘warning signals’ under two categories, viz. physical and mental. The former type includes fatigue, loss of body shape, frequent/prolonged illness, and the worsening of habits.

For instance, when you feel inexplicable fatigue and the physician rules out any pathological reasons for that, it can be attributed to stress, the book notes.

The mental signals, if you can carefully watch, include the following: exaggerated self-importance, negative thinking, displaced emotional reactions, getting mentally glued, forgetfulness and loss of concentration, and lost passion for work and office.

Check, for example, if there is a sudden change in your attitude towards work, the authors counsel.

“You used to love and care about your work. You had a passion for your cause and believed that you could make a difference.

Now the problems that you face seem insurmountable. You feel ineffective and receive no enjoyment from your work. Your focus is just you getting through the day and the week.” Such a change calls for a close scrutiny, say Hariharan and Rath.

For a relaxed study.

‘Yes’ is not enough

Move from ‘dealmaker mentality’ to ‘implementation mindset,’ urges a fresh title from Harvard Business School Press. Else, the deal would only look on paper, and end up in tatters, bemoan the authors Danny Ertel and Mark Gordon, founding partners of Vantage Partners, in ‘The Point of the Deal’ ( www.tatamcgrawhill.com ).

‘Yes’ is not enough, they say; the parties need to ‘do something together after the agreement is signed.’

The authors maintain that there is no point to negotiation ‘victories’ that cannot be implemented.

“Outsmarting or outmanoeuvring your counterparts at the table could well be pointless if in order to benefit, you have to work together after the deal is signed.” In most cases, getting the handshake, nod, or contract signature is only the beginning of building value, aver Ertel and Gordon. Among the imperatives they emphasise are: negotiate like the deal is a means to an end; consult broadly; use the negotiation to create a positive history of working together; and make sure both of you are making commitments you can live up to.

A win-win addition to your shelf.

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D. Murali