Introduction to Ind AS 1

INTRODUCTION TO IND AS

IFRS foundation has a three tier governance structure, based on an independent standard
– setting board of experts (International Accounting standards Bound), governed and
overseen by Trustees from around the world, who in turn are accountable to a monitoring
board of public authorities (IFRS Foundation monitoring board)

APPLICABILITY OF ACCOUNTING STANDARDS IN INDIA

Companies (Accounting Standard) Companies (Indian Accounting Standards)

Rules, 2006 – Companies whose financial Rules, 2015 - Companies whose financial
statements are required to comply with the statements are drawn up in compliance with
current accounting standards Ind AS.

Applicable to Applicable to

a.Companies listed / in process of listing on

a.Companies listed on SME exchange
stock exchange in India or outside India
b.Unlisted companies having net worth less
b.Unlisted companies having net worth of `
than ` 250 crores
250 crore or more.
c.NBFC having net worth below `250 crore
c.Insurance Companies / Insurers
d.Regional Rural Bank
d.NBFC that are unlisted having net worth of
e. All other assessee
`250 crore
e.NBFC’s whose equally and / or debt
securities are listed
Division I of Schedule III f.Parent subsidiary, Associate & Joint ventures
of above
g.Scheduled commercial banks (SCB’s)
(excluding RRB)

For companies other For Non – Banking

Financial Companies
than NBFC’s –
Division II of Schedule (NBFC’s) –
Division III of Schedule
III III

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Introduction to Ind AS 2

Functions Governance & Oversight

IFRS FOUNDATION
Operations

Trustees International Accounting Standards

Board [IASB]
 Responsible for the governance and
oversight of the international  Created in January 2009.
Accounting standards Board, including  IASB is the independent standard
the constitution & due process for the setting body to IFRS foundation.
development of the accounting
standards. (22 trustees)

International Financial Accounting IFRS Interpretation Committee

Standard[IFRS]
 It is an interpretative body of the
 (Previously known as IAS) international accounting standard
 25 International Accounting Standards Board (Board), which works with
– IAS 1 to IAS- 41 Board in supporting the application of
 17 International Financial reporting IFRS standards.
standard IFRS – 1 to IFRS – 17  [14 members appointed by trustee]
 `Video Link :
https://www.ifrs.org/groups/ifrs-
interpretations-committee/

IFRS Advisory Council:

 It provides advice and counsel to the trustees and the board, whilst the board also consults
extensively with a range of other standing advisory bodies and consultative groups.
 It includes investors, financial academics, auditors, professional accounting bodies and
standard setters.
 Its members are appointed by trustees.
 Video Link - https://www.ifrs.org/groups/ifrs-advisory-council/

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Introduction to Ind AS 3

INDIAN ACCOUNTING STANDARDS

Converged: Convergence means to modify and implement instead of
adopting as it is.

Indian Accounting Standards (IND AS) are the international financial reporting standards
(IFRS) converged standards issued by the central government of India under the
supervision and control of accounting standards board of ICAI and in consultation with
national financial reporting authority (NFRA)
Note: Convergence with IFRS means that the accounting standards board of the country
applying IFRS would work together with IASB to develop high quality compatible
accounting standards over time.

Accounting standards Board (ASB)

Accounting Standard Board (ASB)

Consists of representatives from government department,

Committee under ICAI
Academicians, other professional bodies’ viz. ICAI, ICSI,
representative from ASSOCHAM, CII and FICCI.

National Financial Reporting Authority (NFRA)

National Financial Reporting Authority (NFRA)

Recommends the standards to

Ministry of recommends the standard to corporate affairs.

Spells out the as applicable for companies India.

Why Ind AS in India

a. With a view to achieve International benchmarks of Financial reporting
b. Consistent, Comparable and understandable financial reporting is essential to develop
a robust economy.
c. Enhanced transparency for investors and stakeholders to better understand the
business’s financial situation.

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Introduction to Ind AS 4

Carve outs:
Carve outs are due to differences in application of Accounting principles and Principles
and economic conditions prevailing in India. Differences could be categorized as follows:
1) Suitability of Indian conditions
2) Better presentation
3) Removal of options
4) First time adoption financial statements.

COMPANIES (INDIAN ACCOUNTING STANDARDS) RULES 2015

Rule 4: Obligation to comply with Ind AS
Applicability Chart:
1. For companies other than Banks, NBFC’s and Insurance companies
Phase I:
 1st April 2015 or thereafter: Voluntary basis for all companies (with comparatives)
 1:4:2016: Mandatory basis
a. Companies listed / in process of listing on stock exchange in India or outside
India having net worth > 500 crores.
b. Unlisted companies leaving net worth >500 crore
c. Parent, subsidiary, Associate & Joint venture of above.
Phase II:
1.4.2017: Mandatory Basis
a. All companies which are listed / or in process of listing inside or outside india
on stick exchange not covered in Phase I.
b. Unlisted companies having net worth of ` 250 crore or more.
c. Parent subsidiary, Associate & Joint ventures of above.
Note:
1. Companies listed on SME exchange are not required to apply Ind AS.
2. Once Ind AS we applicable an entity shall be required to follow the Ind AS for all
the Subsequent Financial Statements.
3. Companies not covered by the above, roadmap shall continue to apply existing
accounting standards notified in companies (Accounting standard rules 2006)

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Introduction to Ind AS 5

For Companies other than Bank NBFCs and Insurance Companies

Phase I Phase II

1/04/2015 1/04/2016 1/04/2017

Voluntary Basis Mandatory Basis Mandatory Basis

All Companies with comparative Companies listed / in Unlisted companies All companies listed Unlisted companies
process of listing on networth≥`500 or in process of having networth of
stock exchange in crore listing inside or `250 crore or more.
india or outside india outside india on
Networth ≥ `500 stock exchange not
crore. covered in Phase I

Parent & Subsidary, Associate & joint venture Of above.

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Introduction to Ind AS 6

2. Insurers / Insurance Companies:

 Applicable from 1st April 2021 (With comparatives)
 Holding, subsidiary, Joint Venture & associate companies of insurer / insurance
companies shall also apply from the said date irrespective of it being covered under
corporate roadmap.
 Applicable for both consolidated & individual financial Statements.

For Insurance Companies / Insurers:

1/04/2021
 Insurance Companies
 Insurers
IMPORTANT
 Holding, subsidiary, J. V. & associate companies of
Insurers & insurance companies - date as per
corporate roadmap would not apply.

3. For Non – Banking Financial Companies (NBFC’s):

Phase I:
 From 1st April 2018 (With comparatives)
a. NBFC (Whether listed or Unlisted ) Leaving net worth Rs. 500 crores or more
b. Holding, Subsidiary, Joint Venture and associate companies of above NBFC other
than those already covered under corporate roadmap shall also apply form said
date.
Phase 2:
 From 1st April 2019 ( With comparatives).
a. NBFC’s whose equally and / or debt securities are listed or are in India and having
net worth less than 500 crore.
b. NBFC that are unlisted having net worth of ` 250 crore or more but less than `
500 crore.
c. Holding, subsidiary, J. V. and associate of above other than those already covered
under corporative roadmap shall also apply from said date.

Notes:

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Introduction to Ind AS 7

1. Applicable for both consolidated & individual financial statements.

2. NBFC having net worth below ` 250 crore shall not apply IND AS
3. Adoption of Ind As is allowed only when required as per the roadmap. Voluntary
adoption of Ind AS is not allowed.

For Non Banking Financial Companies

Phase I (NBFCs)
Phase II

1/04/2018 1/04/2019

NBFC (listed or not ) NBFC ‘s whose equity or debt NBFC that are unlisted having
Networth ≥ `500 crore security are listed or in the networth of `250 crore or more
prowon of listing on any stock bur less than `500 crore.
exchange in india or outside
india having networth less
than `500 Crore

Holding, subsidiary, associate Joint venture of above other than those

already covered under corporate roadmap shall apply from the said date. IMPORTANT

4. Scheduled commercial Banks (Excluding RRB):

Scheduled commercial banks (SCB’s) excluding RRB) were initially required to implement
Indian Accounting standards (Ind AS) from 1st April 2018.
RBI vide. Notification dated 22nd March 2019 has deferred the Ind As implementation
till further notice.

Networth:
 Net worth [As per sub rule 2 of Rule 4 of companies (Indian accounting
standards) Second Amendment rules 2019.]
1. For calculation of net worth of companies.
a. The net worth shall be calculated In accordance with the Standalone financial
statements of the company as on 31.03. 2014. Or the first audited financial
statements for Accounting period which ends after that date.

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Introduction to Ind AS 8

b. For companies which not in existence on 31 March 2014 or an existing company

falling under any of the thresholds specified in (clause (i),(ii) and (iii) of Sub (i)
I for the first time after 31st March 2014, the net worth shall be calculated on the
basis of the first audited financial statements ending after that date in respect
of which it meets the thresholds specifies
 Net worth (As per sub rule 2A of rule of companies’ (Indian accounting
standards) rules 2015.

For Calculation of net worth of NBFC

a. The net worth shall be calculated in accordance with the stand – alone financial
statements of the NBFC’s as on 31st March 2016 or the first audited financial
statements for accounting period which ends after that date.
b. For NBFC’S which are not in existence on 31 March 2016 the net worth shall be
calculated on the basis of the first audited stand – alone Financial statements
ending after that date in respect of which it meets the thresholds.

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