The business landscape is rapidly changing as new ways of conducting business are emerging. As the business complexities increased, the existing accounting standards lacked provisions to cater to these changes. This gave rise to the Indian Accounting Standards, popularly known as Ind AS. Ind AS are the Indian version of International Financial Reporting Standards (IFRS) which are global standards governing the accounting aspects. This guide covers everything you need to know about Ind AS, Ind AS applicability, and Compliances.
Ind AS became applicable in a phase-wise manner. Following is the timeline of applicability of Ind AS:
A. For Companies (Other than the Banks, Non-banking Financial Companies, and Insurance Companies)
B. For Scheduled Commercial Banks (Excluding RRBs), Non-Banking Financial Companies, Insurers, and Insurance Companies
1) Non-Banking Financial Companies (NBFCs)
The Ind AS shall be applied on both standalone and consolidated financial statements. Also, NBFCs with a net worth of less than Rs. 250 crores shall not apply Ind AS on a voluntary basis.
2) Scheduled Commercial Banks (Excluding Regional Rural Banks)
Ind AS were required to be implemented by Scheduled Commercial Banks (excluding RRBs) from 1st April 2018. However, vide press release dated 5th April 2018, it was deferred for one year. Subsequently, it was again deferred till further notice vide notification dated 22nd March 2019.
3) Insurance Companies / Insurers
The requirement to implement Ind AS by the insurers and insurance companies has been deferred by the IRDAI till further notice.
Following is the list of Ind AS applicability to the organizations:
|Ind AS 101||First time adoption of Indian Accounting Standards|
|Ind AS 102||Share Based Payment|
|Ind AS 103||Business Combinations|
|Ind AS 104||Insurance Contracts|
|Ind AS 105||Non-Current Assets Held for Sale and Discontinued Operations|
|Ind AS 106||Exploration for and Evaluation of Mineral Resources|
|Ind AS 107||Financial Instruments: Disclosures|
|Ind AS 108||Operating Segments|
|Ind AS 109||Financial Instruments|
|Ind AS 110||Consolidated Financial Statements|
|Ind AS 111||Joint Arrangements|
|Ind AS 112||Disclosure of Interests in Other Entities|
|Ind AS 113||Fair Value Measurement|
|Ind AS 114||Regulatory Deferral Accounts|
|Ind AS 115||Revenue from Contracts with Customers|
|Ind AS 116||Leases|
|Ind AS 1||Presentation of Financial Statements|
|Ind AS 2||Inventories|
|Ind AS 7||Statement of Cash Flows|
|Ind AS 8||Accounting Policies, Changes in Accounting Estimates and Errors|
|Ind AS 10||Events occurring after Reporting Period|
|Ind AS 12||Income Taxes|
|Ind AS 16||Property, Plant, and Equipment|
|Ind AS 19||Employee Benefits|
|Ind AS 20||Accounting for Government Grants and Disclosure of Government Assistance|
|Ind AS 21||The Effects of Changes in Foreign Exchange Rates|
|Ind AS 23||Borrowing Costs|
|Ind AS 24||Related Party Disclosures|
|Ind AS 27||Separate Financial Statements|
|Ind AS 28||Investments in Associates|
|Ind AS 29||Financial Reporting in Hyperinflationary Economies|
|Ind AS 32||Financial Instruments: Presentation|
|Ind AS 33||Earnings per Share|
|Ind AS 34||Interim Financial Reporting|
|Ind AS 36||Impairment of Assets|
|Ind AS 37||Provisions, Contingent Liabilities and Contingent Assets|
|Ind AS 38||Intangible Assets|
|Ind AS 40||Investment Property|
|Ind AS 41||Agriculture|
1) Once the Ind AS becomes applicable, whether due to voluntary adoption or otherwise, the companies shall adhere to the compliances of Ind AS applicable to them. The financial statements under the Companies Act, 2013 are governed by Schedule III. There are 3 divisions in Schedule III:
2) All the companies (excluding banks, NBFCs and insurance companies) preparing financial statements as per Ind AS shall do so in accordance with the Division-II of Schedule-III (also known as the Ind AS Schedule-III) as well as the Guidance Note on Division-II of Schedule-III of the Companies Act, 2013 (also known as Ind AS Guidance Note). In the case of NBFCs, Division-III shall become applicable.
However, companies referred to in Section 129(1) of the Companies Act, 2013 are not required to comply with the requirements of Ind AS Schedule III. This includes an insurance company, banking company, or company engaged in the generation or supply of electricity for which the form for presentation of financial statements has been specified under any other act that governs such class of companies.
However, in the case of companies engaged in the generation and supply of electricity, the Electricity Act, 2003 has not specified any format for the presentation of Financial Statements. Therefore, Ind AS Schedule-III can be followed by such companies till any other format is being prescribed by the relevant act.
3) The listed companies shall follow the guidelines issued by way of a circular by SEBI that prescribes the format for publishing quarterly, half-yearly, and annual financial results that are guided by the provisions of Ind AS and Ind AS Schedule-III. The companies may make suitable modifications.
4) The components of financial statements prepared in accordance with Ind AS compliance include:
If you have any queries regarding Ind AS applicability and compliances associated with Ind AS, please feel free to contact the ASC Group.
Ind AS stands for Indian Accounting Standards. It is a set of accounting standards and principles used by companies in India to prepare and present their financial statements.
Ind AS 101 is the standard that sets out the principles of first-time adoption of Ind AS. It provides guidance on how to transition from the previous accounting framework to Ind AS.
Ind AS 102 is the standard that deals with accounting for share-based payments. It provides guidance on the measurement, recognition, and disclosure of share-based payments made by companies to their employees or other parties.
Ind AS 103 is the standard that deals with business combinations. It provides guidance on how to account for the acquisition of one company by another and the preparation of consolidated financial statements.
Ind AS 104 is the standard that deals with insurance contracts. It provides guidance on the measurement, recognition, and disclosure of insurance contracts.
Ind AS 105 is the standard that deals with non-current assets held for sale and discontinued operations. It provides guidance on how to account for assets that are held for sale and operations that are discontinued.
Ind AS 106 is the standard that deals with exploration for and evaluation of mineral resources. It provides guidance on the accounting treatment for expenditures related to exploration for and evaluation of mineral resources.
Ind AS 108 is the standard that deals with operating segments. It provides guidance on how to identify, report, and disclose information about operating segments in the financial statements.
Ind AS 109 is the standard that deals with financial instruments: recognition and measurement. It provides guidance on how to account for financial instruments such as loans, receivables, debt securities, and derivatives.
Ind AS 110 is the standard that deals with consolidated financial statements. It provides guidance on the preparation of consolidated financial statements when a company has control over one or more other companies.
The following companies are required to follow Ind AS:
Ind AS is largely based on IFRS (International Financial Reporting Standards) with some modifications and amendments to suit the Indian context. The main differences between Ind AS and IFRS are related to the treatment of certain aspects of Indian law and regulations.
No, if a company meets the criteria for Ind AS applicability, it is required to comply with Ind AS. However, certain exemptions may be available for certain types of entities, such as small and medium-sized enterprises.
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