IMPACT ANALYSIS OF I-GAAP AND IFRS ON PROFIT MARGINS IN THE INDIAN IT INDUSTRY (A COMPARATIVE STUDY FROM FY-2010 TO FY-2022)

Abstract

This study assesses the impact of transitioning from Indian Generally Accepted Accounting Principles (I-GAAP) to International Financial Reporting Standards (IFRS) on the profit margins of major Indian IT firms such as Infosys, TCS, Wipro, MindTree, and Rolta India. Utilizing data from FY 2010 to FY 2022, the research applies paired t-tests to compare operating and net profit margins under both standards. Findings indicate a decrease in profit margins under IFRS, reflecting the system's emphasis on conservative accounting and transparency. This paper highlights the implications for investors and policymakers, emphasizing the need for nuanced interpretation of financial reports post-transition. The results contribute to discussions on the global harmonization of accounting standards and their effects on financial reporting.