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Authors
Affiliations
1 IMT, Ghaziabad, IN
Source
Management Dynamics, Vol 11, No 1 (2011), Pagination: 41-49
Abstract
This paper attempts to understand the prevalent accounting disclosures in India and Germany, through a study of the Automobile sector in the two countries. This sector has been picked up because it is massive, competitive, and it is expected to undergo major restructuring in the near future due to globalization and decreasing oil reserves. To analyse accounting standards in the two countries, the researchers have chosen the time period 2009-11, when two different standards were being used in the two countries: India was employing the standards prescribed by ICAI, while firms in Germany had more or less adapted themselves to IFRS since 2005. For each country, the study has closely studied the 'Disclosures'in the Financial Statements in each company's Annual Report. The companies that we chose are Daimler Group, Volkswagen Group, and BMW (Bayerische Motoren Werke) Group in Germany, and Mahindra and Mahindra Ltd., Ashok Leyland Ltd., and Tata Motors Ltd. in India. This analysis of individual firms 'financial statements gives a picture of disclosure practices followed in the industry, in the two countries under study. The paper then juxtaposed this analysis with the accounting standards employed in each country, and understood standards based on this analysis. Thus, the paper has been able to pinpoint specific differences in accounting policy as per the two standards, and also recognised the need for simplification. The findings suggest that there are more similarities in the accounting standards as applicable to the automobile sector in India and Germany. However the quality and content of the disclosures of German Automobile firms is superior to Indian counterparts.
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