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IND-AS, Indian Accounting Standards

Shubham Gupta , Last updated: 24 June 2016  

Indian Accounting Standards

OBJECTIVE The basic objective of Accounting Standards is to remove variations in the treatment of several accounting aspects and to bring about standardization in presentation. They intent to harmonize the diverse accounting policies followed in the preparation and presentation of financial statements by different reporting enterprises so as to facilitate intra-firm and inter-firm comparison.

List of Indian Accounting Standards(IND ASs)

IND ASs are converged with International Financial Reporting Standards. Following is the list of IND ASs hosted on MCA's website. The date on which these come into force is yet to be notified.

  • Ind AS 101 First-time Adoption of Indian Accounting Standards *
  • Ind AS 102 Share based Payment *
  • Ind AS 103 Business Combinations *
  • 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 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 after the Reporting Period *
  • Ind AS 11 Construction Contracts *
  • Ind AS 12 Income Taxes *
  • Ind AS 16 Property, Plant and Equipment *
  • Ind AS 17 Leases *
  • 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 Consolidated and Separate Financial Statements *
  • Ind AS 28 Investments in Associates *
  • Ind AS 32 Financial Liability and Equity *
  • 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

Indian Accounting Standards (abbreviated as India AS) in India accounting standards were issued under the supervision and control of Accounting Standards Board (ASB), which was constituted as a body in the year 1977. ASB is a committee under Institute of Chartered Accountants of India(ICAI). ASB is an independent committee which consists of representatives from government department, academicians, space agencies, representatives from ASSOCHAM, CII, FICCI, etc., Now India will have two sets of (very confusing) accounting standards viz. existing accounting standards under Companies (Accounting Standard) Rules, 2006 and IFRS converged Indian Accounting Standards(Ind AS). The Ind AS are named and numbered in the same way as the corresponding IFRS. NACAS recommend these standards to the Ministry of Corporate Affairs. The Ministry of Corporate Affairs has to spell out the accounting standards applicable for companies in India. As on date the Ministry of Corporate Affairs notified 39 Indian Accounting Standards(Ind AS).This shall be applied to the companies of financial year 2015-16 voluntarily and from 2016-17 on a mandatory basis.

Phase 1 Companies 2016-17

• All listed and unlisted companies having net worth of Rs. 500 cr. or more
• Holding, subsidiary, joint venture or associate companies of companies covered above

 Phase 2 Companies 2017-18

 • All other listed companies
• Unlisted companies having a net worth of Rs. 250 crores or more and less than Rs. 500 cr
 • Holding, subsidiary, joint venture or associate companies of companies covered above

• Applicable on both standalone and consolidated financial statements

Net worth
• Net worth to be computed on March 31,2014 on the basis of standalone financial statements

Challenges ahead - Accounting and beyond

Measuring Fair Values

• A number of Ind AS requires that certain assets and liabilities have to be measured at their initial recognition and also at their subsequent measurement at their fair value and not at their cost (specially financial instruments).

• Presently, Accounting Standards on Financial Instruments are not mandatory

• Computing the fair value is going to be a significant challenges.

Introduction of ‘time value of money’ concept

• This concept requires that where the expected date of recovery of an asset or payment of a liability is deferred, it is recorded at its discounted value using an effective rate of interest and not at its face value. Some of the assets and liabilities where this concept is used are deep discount bonds, deferred receivables and payables and long term provisions.

• A part of the expense will be treated as operating expense and the other part will go below EBIDTA

Education and training

• Education & training required at following levels:

•​ Preparers: Significant training required at the level of preparers, i.e., the Companies

•​ Users or public at large: Banks, financial institutions and Board is used to look at the financial numbers according to particular principles. For many years, they will keep seeking a comparison between old numbers and new numbers.

•​ Trainers: There is lack of trainers who can train the people in Ind AS. Although ICAI has done significant work in training its members but the question is whether it is enough. Simply training is not going to address the issues in attestation. Today, apart from Big 4, very few firms have that capacity. Even Big 4 are able to do this since they have at their disposal international resource pool.

Published by

Shubham Gupta
(Business Consultants)
Category Audit   Report

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