Financial Impact of IFRS on Indian Telecommunication Sector

International Financial Reporting Standards (IFRS) became applicable to listed Indian companies from financial year 2016-17. In India, only Bharti Airtel Ltd. had voluntarily applied these standards from financial year 2010-11. The other Indian companies adopted IFRS from 2016-17.This study analyses the financial impact of IFRS on India’s telecom sector by using financial ratios appraising cash resources, ability to make profits, proportion of debt and equity, working capital, and company’s performance. It has two separate parts. The first one conducts pre-IFRS and post-IFRS analysis of financial ratios of Bharti Airtel Ltd. The years studied in this part are from 2003-04 to 2009-10 (7 years preIFRS) and from 2010-11 to 2016-17 (7 years post-IFRS). The other makes an analytical comparison of the effect of IFRS on Bharti Airtel Ltd. and some select, listed non-adopters in the telecom sector. Years considered are: 2010-2011 to 2016-17 (7 years).Non-parametric tests evaluate statistically significant differences of ratios. Many ratios are found to be significantly different, in both parts of the study.This study is the first of its kind pertaining to the Indian telecom sector. The outcomes provide important guidance for companies in the Indian telecom sector which are listed on Indian stock exchanges, various stakeholders in such companies, and corporate accounting and auditing regulators.