Applicability of Ind AS

Meaning:- Indian Accounting Standards (abbreviated as Ind AS) are a set of accounting standards notified by the Ministry of Corporate Affairs which are converged with International Financial Reporting Standards (IFRS) (IND AS is notified by NACAS on 25th Feb 2011.) (NFRA= National Financial Reporting Authority U/s 132)

Indian Accounting Standards (Ind AS) are buzzing words in the arena of finance and accounting in India today. It is estimated nearly 10,000 companies in India would be required to file Ind AS compliant financial statements in coming years. Corporate, regulators, government, educational institutions etc are all geared up to take on the challenge of Ind AS adoption with full enthusiasm.

Adopting Ind AS will bring about many positive changes in corporate world. However, the biggest bottleneck in adoption of Ind AS is meeting the human resource requirements to successfully implement this change. Hence the study of Ind AS is of immense significance these days for accounting professionals, business analysts, investors, regulators and people at helm of affairs of the entities required to comply with Ind AS.

Applicability of IND AS

The Ind AS shall be applicable to the companies as follows: As notified by MCA as on 16/02/15 in Companies (Indian Accounting Standards) Rules, 2015. Obligation to comply with Indian Accounting Standards (Ind AS). - (1) The Companies and their auditors shall comply with the Indian Accounting Standards (Ind AS) specified in Annexure to these rules in preparation of their financial statements and audit respectively, in the following manner

  On mandatory basis
(i) On voluntary basis (ii) Accounting periods beginning on or after 1/4/16(For 31/3/17) with the comparatives. (iii) Accounting periods beginning on or after 01/04/17(For 31/3/18), with the comparatives.
Accounting periods beginning on or after April 1, 2015, with the comparatives for the periods ending 31st March, 2015 or thereafter;
  • (a) Companies whose equity and/or debt securities are listed or are in the process of listing on any stock exchange in India or outside India and having net worth* of Rs. 500 Crore or more.
  • (b) Companies other than those covered in (ii) (a) above, having net worth of Rs. 500 Crore or more.
  • (c) Holding, subsidiary, joint venture or associate above.
  • (a) Companies whose equity and/or debt securities are listed or are in the process of being listed on any stock exchange in India or outside India.
  • (b) Unlisted companies having net worth of 250 crore or more but less than rupees 500 Crore.
  • (c) Holding, subsidiary, joint venture or associate companies of above.

* NET WORTH: “NET WORTH” shall have the meaning assigned to it in clause (57) of section 2 of the Act “NET WORTH” means the aggregate value of the paid-up share capital and all reserves created out of the profits and securities premium account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of revaluation of assets, write-back of depreciation and amalgamation.

Note:-

  1. Companies listed on SME exchanges shall not be required to apply Ind AS.
  2. Once Ind AS are followed by the company, it shall be required to follow, for all the subsequent financial statements.
  3. This press realise do not apply on Banking Companies, Insurance Companies and NBFC’s

IND AS ROADMAP FOR BANKS, INSURANCE COMPANIES AND NBFCS

A) Scheduled commercial banks (excluding RRBs) and insurers/insurance companies:- Mandatory for accounting periods beginning from 1 April 2018 onwards (With Comparative)

  • a. Scheduled commercial banks (excluding RRBs), Insurers/insurance companies
  • b. Holding, subsidiary, joint venture or associate companies of scheduled commercial banks

B) NBFCs: NBFCs will be required to prepare Ind AS based financial statements in two phases. Phase 1: Mandatory for accounting periods beginning from 1 April 2018 onwards (With Comparative)

  • a. NBFCs (Whether listed or unlisted) having a net worth of Rs. 500 crore or more
  • b. Holding, subsidiary, joint venture or associate companies of the above, other than those companies already covered under the corporate roadmap announced by MCA

Phase 2:Mandatory for accounting periods beginning from 1 April 2019 onwards (With Comparative)

  • a. NBFCs whose equity and/or debt securities are listed or are in the process of listing on any stock exchange.
  • b. NBFCs that are unlisted companies, having a net worth of 250 crore INR or more but less than 500 crore INR
  • c. Holding, subsidiary, joint venture or associate companies of companies covered above, other than those companies already covered under the corporate roadmap announced by MCA

C) Voluntary adoption not permitted to BANKS, INSURANCE COMPANIES AND NBFCS

D) Companies/entities not covered in the roadmap

  • a. NBFCs having a net worth below 250 crore INR .
  • b. Urban cooperative banks (UCBs) and RRBs.