As globalization has continued to progress, most countries have accepted or aligned their accounting standards with the "International Financial Reporting Standards (IFRS)", published by the "International Accounting Standard Board (IASB)". This change, was intended to achieve consistency, reliability, and transparency to assist stakeholders in making informed decisions. India used a convergence approach to adopt the "Indian Accounting Standards (Ind AS)", which are modeled after IFRS. “The Minister of Corporate Affairs (MCA)” has published 41 Ind AS, urging phased implementation depending on company-specific criteria like listing status, net worth, and business nature. This step-by step process facilitates the smooth transition and avoids compliance challenges. Such standard include Ind AS 113, which is particularly renowned for application in fair value measurement, in accordance with IFRS 13. It defines “fair value as the price which would be received to dispose of an asset or paid to allocate a liability within a transactional model at measurement date”. This approach revolves market-based inputs relative to internal valuations. Fair value reporting enhances the relevance and the accuracy of financial reports while discouraging activities like earning manipulation. It is especially important when analyzing financial products that are market-sensitive. For consistency, Ind AS 113 designates inputs into three categories:

Level I- “Quoted prices in active markets”: These are active market prices for similar instruments. Easily available and reliable

Level II – Observable Inputs: These inputs rely on indirect market information, like interest rates or yield curves, applicable to similar instruments.

Level III– Unobservable Inputs: These are based on internal models, projections, and estimates wheremarket data is unavailable.

REVIEW OF LITERATURE

Fair value accounting has received signific antinterest becauseitcouldhelpcreatetimely and relevant financial information. Barth and Landsman (1995) were have some of the first to showthatit could help them do that, particularly in rapidlychangingmarkets. Penman (2007) mentionedtheissue of reliability, particularly for Level II inputs, because they were driven by managerial assumptions. Landsman (2007) pointedout that both Levels II and III produced increased volatility and estimation risk, whichcreated questions about the reliability of reported financials as a result. During the global financial crisis, Procházka (2011) emphasized that FVA was a reflection, not a cause, of economic downturns, reinforcing its role in financial transparency. Kaur (2013) discussed the collaboration between IASB and FASB in promoting fair value as a forward-looking alternative to historical cost. Samaddar (2014) critiqued the uneven adoption of FVA in India, noting gaps in technical clarity and application. Skoda and Slavikova (2015) argued that fair value and historical cost accounting serve complementary purposes. Goh, Ng, and Yong (2015) provided empirical evidence showing that investors place more weight on Level I disclosures while discounting Level III due to their subjective nature. Kavya and Noorbasha (2017) observed hesitation among Indian firms to apply fair value to non-financial assets. Rani and Suneja (2018) found varying levels of compliance and quality in Ind AS 113 disclosures among Indian firms. An ICAI (2020) review showed significant inconsistencies in disclosure practices among top Indian companies. Most recently, Sharma and Mehta (2021) found that while TCS and Infosys showed better compliance due to international exposure, differences in classification and disclosure still impacted comparability.

Research Gap

Although both global and Indian scholars have explored fair value accounting, limited research exists comparing firm-level fair value hierarchy disclosures under Ind AS 113. Particularly in the IT sector, studies rarely investigate the transparency, consistency, and alignment of such disclosures with regulatory expectations. This study fills that void by comparing TCS and Infosys, offering insights into the fair value practices of two of India’s leading IT firms.

Research Purpose and Objectives

• To explore the reporting and disclosure requirements of Ind AS 113 related to fair value measurement.
• To assess how the fair value hierarchy is practically applied in corporate financial reporting.
• To compare the fair value hierarchy disclosures and practices of Tata Consultancy Services Ltd. and Infosys Technologies Ltd.

Research Questions

• What are the key reporting and disclosure requirements of Ind AS 113 concerning fair value measurement and hierarchy?
• How are Levels I, II, and III of the fair value hierarchy applied in the recognition and measurement of financial instruments?
• What differences and similarities exist in the fair value disclosures of Tata Consultancy Services Ltd. and Infosys Technologies Ltd.?

Hypothesis of the study

H1: Differences are significantly exists in the number of financial instruments disclosed under Level I between Infosys Ltd. and TCS.

H2: Differences are significantly exists in the number of financial instruments disclosed under Level II between Infosys Ltd. and TCS.

H3: Differences are significantly exists in the number of financial instruments disclosed under Level III between Infosys Ltd. and TCS.

H4: Differences are significantly exists in the monetary value of instruments disclosed under Level I between Infosys Ltd. and TCS.

H5: Differences are significantly exists in the monetary value of instruments disclosed under Level II between Infosys Ltd. and TCS.

H6: Differences are significantly exists in the monetary value of instruments disclosed under Level III between Infosys Ltd. and TCS.

RESEARCH METHODOLOGY

This study adopts a secondary data-based analytical approach to evaluate fair value disclosure practices under Ind AS 113. No primary data collection was undertaken. The research focuses on the application of the standard by companies listed on the BSE 30 Index.

7.1 Scope of the Study

The research is confined to Tata Consultancy Services Ltd. and Infosys Technologies Ltd., both of which comply with Ind AS and are listed on the BSE 30. The study period is the financial year 2023–24 and uses publicly available data from annual reports.

7.2 Population and Sample

7.2.1 Population: All companies listed on the BSE 30 Index following Ind AS.

7.2.2 Sample: Tata Consultancy Services Ltd. and Infosys Technologies Ltd., selected using convenience sampling based on data relevance and availability.

7.3 Content Analysis

Content analysis is applied to interpret qualitative data from annual reports regarding fair value measurement. It includes:

• Classification of instruments under Levels I, II, and III
• Monetary values disclosed under each level
• Comparative assessment between the two firms

This approach enables structured evaluation and quantification of narrative financial disclosures.

7.4 Data Collection

Secondary Sources:

• Annual Reports of TCS and Infosys for FY 2023–24
• Ind AS 113, related IFRS standards, and regulatory frameworks
• Published compliance tools and checklists

7.5 Statistical Tools and Techniques

• Fisher's Exact Test: Used with limited sample sizes to evaluate connections between categorical variables
• Chi-Square Test: Applied to examine independence among disclosure practices across the hierarchy levels.
• R Programming: Employed for data handling, visualization, and statistical validation.

DATA ANALYSIS AND RESULTS

Finding out if there are notable variations in the categorization and valuation of financial instruments reported under Level I, II, and III by Tata Consultancy Services and Infosys Technologies Ltd. for the fiscal year 2023–2024 is the main goal of the data study.

Table 1: Firms have recognized certain assets and liabilities measured through Level I inputs, derived directly from quoted market prices.

(Source: Annual Report 2023-24)

Table 2: The firms have recognized assets and liabilities categorized as Level II, valued using market-based inputs that are observable but not quoted prices.

(Source: Annual Report 2023-24)

Table 3: The companies have reported certain Assets &Liabilities under Level III of the fair value hierarchy, where valuations rely on unobservable inputs and internal assumptions.

(Source: Annual Report 2023-24)

Table 4: The companies disclosed various Assets &Liabilities that are categorized under Level I, II, and III of the fair value hierarchy, depending on the type and availability of valuation inputs.

INDEX:  FI- FINANCIAL INSTRUMENTS

Given the smaller sample size and the categorical in nature of the data, Fisher’s Exact Test was employed to determine whether the differences in the number of FIs disclosed under each level between TCS and Infosys are statistically significant. The test was conducted separately for each level using 2×2 contingency tables. R programming language was used to perform the analysis. The hypotheses tested were:

• H1: Differences are significantly exists in the number of financial instruments disclosed under Level I between Infosys Ltd. and TCS.
• H2: Differences are significantly exists in the number of financial instruments disclosed under Level II between Infosys Ltd. and TCS.
• H3: Differences are significantly exists in the number of financial instruments disclosed under Level III between Infosys Ltd. and TCS.

Table 5: Level I Comparison

• P value = 0.4003
• Significance level =0.05 (5%)

Interpretation: The null hypothesis is upheld since the p-value of 0.4003 is higher than 0.05. This suggests that, at the 5% significance level, there is no statistically significant difference between the two companies' Level I disclosures.

Table 6: Level II Comparison

• P value = 0.6570
• Significance level =0.05 (5%)

Interpretation: The null hypothesis is upheld because the p-value of 0.6570 is higher than 0.05. This suggests that, at the 5% significance level, there is no statistically significant difference between the two companies' Level I disclosures.

Table 7: Level III Comparison

• P value = 1.0000
• Significance level =0.05 (5%)

Interpretation: The null hypothesis is upheld because the p-value of 1.0000 is higher than 0.05. This suggests that, at the 5% significance level, there is no statistically significant difference between the two companies' Level I disclosures.

Fig: 1. R Script Used for Conducting Fisher’s Exact Test and Result

To assess if there were any significant differences in the number of financial instruments disclosed under the Levels I, II, and III fair value hierarchies between Tata Consultancy Services and Infosys Technologies Ltd.. This R code conducted a Fisher's Exact Test, and the output provided P values and odds ratios for Levels I, II, and III. The disclosure practices of TCS and Infosys do not differ statistically significantly across the three tiers of fair value hierarchy as each p value was greater than 0.05, as the report indicated. The objective of this research project is to see whether the financial instruments disclosed by Infosys Ltd. and TCS under the Levels I, II, and III fair value hierarchies differ significantly in the monetary values of the assets and/or liabilities.

Table No. 8: The companies' Assets & Liabilities as of March 31, 2024, are arranged according to the fair value hierarchy's levels, as explained below. ₹ In Crore

(Source: AR 2023-24)

Table No. 9: The companies' Assets &Liabilities as of March 31, 2024, are arranged according to the fair value hierarchy's levels, as explained below.  ₹In Crore

(Source: AR2023-24)

Table No. 10: The companies' Assets & Liabilities as of March 31, 2024, are arranged according to the fair value hierarchy's levels, as explained below. ₹ In Crore

(Source: AR 2023-24)

Table No. 11:The following table establishes how Assets & Liabilities are grouped within the fair value hierarchy as of March 31, 2024. ₹ In Crore

The monetary values of financial instruments disclosed by Infosys Ltd and TCS under each fair value level were collected. To test hypotheses H4, H5, and H6, which posit significant differences between the two companies at each level, the chi-square test of independence was employed. This test is appropriate for examining whether the distribution of monetary values differs significantly between the two firms across the three levels. R programming language was used to perform the analysis. The hypotheses tested were:

• H4: Infosys Ltd. and TCS's monetary values of the instruments they disclosed under Level I differ significantly.
• H5: Infosys Ltd. and TCS's monetary values of the instruments they disclosed under Level II differ significantly.
• H6: Infosys Ltd. and TCS's monetary values of the instruments they disclosed under Level III differ significantly.

RESULTS OF CHI-SQUARE TEST

Table No 12: Level I Comparison

Where

• a = 31729 ( TCS, Level I)
• b = 286 (TCS, Other levels)
• c = 14933 ( Infosys, Level I)
• d= 8061 ( Infosys, Other levels)
• N= a+b+c+d = 55009

1. calculated ad-bc

2. Square the result:
3. Denominators to be multiplied:
4. Final chi-square value:

• Chi- Square Statistic: 12132
• P- Value : <0.0000001 ( 2.2e-16)

Interpretation: TCS and Infosys differ significantly in their Level I financial disclosures. The 5% significance level results in the rejection of the null hypothesis.

Fig: 2. R Script Used for Conducting Chi-Square Test (Level I) and Result

Table No 13: Level II Comparison

Where

• a = 255 (TCS, Level II)
• b = 31760 (TCS, Other levels)
• c = 7884 ( Infosys, Level II)
• d= 15110 ( Infosys, Other levels)
• N= a+b+c+d = 55009

1. calculated ad-bc:

2. Square the result:
3. Denominators to be Multiplied :

Total denominator

4. Final chi-square value:

• Chi- Square Statistic: 11904
• P- Value : <0.0000001 ( 2.2e-16)

Interpretation: TCS and Infosys differ significantly in their Level II financial disclosures. The 5% significance level results in the rejection of the null hypothesis.

Fig: 3. R Script Used for Conducting Chi-Square Test (Level II) and Result

Table 14: Level III Comparison

Where

• a = 31 (TCS, Level III)
• b = 31984(TCS, Other levels)
• c = 177 ( Infosys, Level III)
• d= 22817( Infosys, Other levels)
• N= a+b+c+d = 55009

1. calculated ad-bc:
2. Square the result:
3. Denominators to be Multiplied :

First:

Then:

4. Final chi-square value:

• Chi- Square Statistic: 159.10
• P- Value : <0.0000001 ( 2.2e-16)

Interpretation: TCS and Infosys differ significantly in their Level III financial disclosures. The 5% significance level results in the rejection of the null hypothesis.

Fig: 4. R Script Used for Conducting Chi-Square Test (Level III) and Result

Findings

1. Recommendations

The fair value disclosures of Tata Consultancy Services' (TCS) and Infosys Technologies Ltd.'s financial instruments were examined in this study.For each of the three fair value hierarchy levels described under IFRS 13, the emphasis was on the quantity and monetary value of the instruments disclosed.

This study discovered that there is a highly significant difference in monetary value at every level of the hierarchy, even though there is no statistically significant difference in the number of financial instruments disclosed by the two companies.

Both firms' valuation methods and assumptions differ greatly, especially for the Levels (II and III), which rely more on unobservable inputs, according to the findings, which also indicate that both firms satisfy the quantitative read disclosure rules for a variety of financial instruments.

Data Availability Statement

The data used in this study were obtained from the publicly available annual reports of Infosys Technologies Ltd and Tata Consultancy Services (TCS) for the financial year 2023–24. All financial disclosures, including fair value hierarchy details under Ind AS 113, were extracted from these reports. Processed data tables and analytical computations are available from the corresponding author upon reasonable request.

Conflict of Interest

The author affirms that there are no conflicts of interest related to the publication of this study.

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