International Financial Reporting System (IFRS) is the new language of financial reporting and communication to investors and other stakeholders. More than 120 countries have adopted the process of convergence with IFRS. India has committed itself at the G-20 to make the companies IFRS compliant from April 1st, 2011 in a phased manner. The goal of IFRS is to create comparable, reliable and transparent financial statement that will facilitate greater cross-border capital raising, trade and better corporate governance practice. The paper attempts to show the problems and challenges faced by Indian companies in the process of convergence to IFRS and measures taken to address the challenges. It also discusses the Major Differences between Indian GAAP and IFRS. The paper concludes the ways through which these challenges can be addressed and major differences between Indian GAAP and IFRS.