Published Online:January 2026
Product Name:The IUP Journal of Accounting Research & Audit Practices
Product Type:Article
Product Code:IJARAP120126
DOI:10.71329/IUPJARAP/2026.25.1.255-273
Author Name:Indrajit Das and Debasish Sur
Availability:YES
Subject/Domain:Finance
Download Format:PDF
Pages:255-273
The paper evaluates the impact of India’s transition from historical cost-based accounting to fair value accounting (FVA) under Ind AS 113, implemented in 2016-17. Addressing the gap in empirical analysis of FVA’s effectiveness in emerging markets, the study aims to assess changes in the relevance, reliability, and predictive power of financial statements. Using regression analysis and key financial indicators—including earnings per share (EPS) and return on capital employed (ROCE)—the study reveals that financial statements under FVA better reflect market realities. The earning quality ratio (EQR) has either improved or remained stable after transition. These findings support the conclusion that Ind AS 113 enhances financial reporting quality in India’s dynamic economic context.
Financial statements act as a tool of communication between different parties associated with an organization. They are the primary sources of financial information through which an investor can evaluate the financial state of affairs of an entity during a particular period. The prime goal of financial statements is to present an accurate and fair representation of a company’s financial condition to its stakeholders