NFRA to unveil accounting changes for cross-border financial reporting
August 6, 2026
NFRA approves amendments to Indian Accounting Standard 21 to address accounting issues in hyperinflationary economies, aligning with IASB changes for improved financial reporting by multinational companies from April 2027.
In a move to plug a gap in accounting rules for companies with overseas operations, the National Financial Reporting Authority (NFRA) has approved a proposal to amend Indian Accounting Standard (Ind AS) 21 in line with the latest changes issued by the International Accounting Standards Board (IASB).
The changes were proposed by the Institute of Chartered Accountants of India (ICAI) to address accounting issues arising when financial statements are translated from a stable (non-hyperinflationary) currency into a hyperinflationary currency.
The amendments are aimed at multinational companies, particularly Indian firms with overseas subsidiaries, and mirror changes issued by the London-based International Accounting Standards Board (IASB) in November 2025 after it identified a gap in global accounting standards.
Experts said that the changes will ensure that domestic firms maintain consistency in financial reporting across jurisdictions where inflation levels differ significantly.
The decision was taken at NFRA’s 24th meeting held last month wherein the regulator recommended the changes to the central government for notification with the revised standard becoming effective for financial reporting periods beginning April 2027.
In the meeting, NFRA members observed that the amendment is intended to address an accounting issue while ensuring that country’s accounting standards remain aligned with international financial reporting standards. The regulator noted that the proposed changes would be relevant to industries which have a presence in hyperinflationary economies.
Besides this, the NFRA also endorsed editorial amendments to Ind AS 101, Ind AS 1 and Ind AS 28, which ICAI said arise from periodic reviews of accounting standards undertaken by both the IASB and the institute. These changes form part of the package recommended to the government for notification.
Crucially, the members also discussed ways to strengthen the public consultation process for future accounting standards. They said that many stakeholders had asked for additional guidance while responding to the proposed amendments. To this argument, ICAI said that there’s enough educational material available on its website.
[The Financial Express]
