IFRS Impact on Profitability and Liquidity Parameters for the Indian IT Sector - Case Study Approach

International Financial Reporting Standards (IFRS) are the new global accounting standards and have made its way into India. As the country accepts these standards, investors are curious whether change of accounting standards from Indian GAAP (Generally Accepted Accounting Principles) to IFRS will result in significant changes in financial statements.Our paper makes an attempt to study the impact of this transition for the Indian Information Technology (IT) sector using case study approach. The companies selected for this study include Infosys Ltd., Wipro Ltd., and Sify Technologies. Their financial statements with IFRS and Indian GAAP have been compared in depth. As the changes in financial statements manifest themselves better through ratios, we shall be studying the differences in profitability ratios such as the Net Profit ratio, Gross Profit ratio and Return on Investment (RoI) followed by some liquidity ratios like the Current ratio and Acid Test ratio. T-test analysis has been used to further see if there is a significant difference in these profitability and liquidity parameters