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In exercise of the powers conferred by section 133 read with section 469 of the Companies Act, 2013 and sub-section (1) of section 210A of the Companies Act, 1956, the Central Government, in consultation with the National Advisory Committee on Accounting Standards, has made the Companies (Indian Accounting Standards) Rules, 2015.

These Rules have come into force on the 1st day of April, 2015.

APPLICABILITY OF IND AS

Voluntary Applicability

W.e.f. 01.04.2015

Any company may comply with the Indian Accounting Standards (Ind AS) for financial statements for accounting periods beginning on or after 1st April, 2015, with the comparatives for the periods ending on 31st March, 2015, or thereafter.

Mandatory Applicability

W.e.f. 01.04.2016

The following companies shall comply with the Indian Accounting Standards (Ind AS) for the accounting periods beginning on or after 1st April, 2016, with the comparatives for the periods ending on 31st March, 2016, or thereafter, namely:-

·  Companies whose equity or debt securities are listed or are in the process of being listed on any stock exchange in India or outside India and having net worth of Rs. 500 Crores or more

·  Companies other than those covered above and having net worth of Rs. 500 Crores or more

·  Holding, subsidiary, joint venture or associate companies of companies covered above.

W.e.f. 01.04.2017

The following companies shall comply with the Indian Accounting Standards (Ind AS) for the accounting periods beginning on or after 1st April, 2017, with the comparatives for the periods ending on 31st March, 2017, or thereafter, namely:-

· Companies whose equity or debt securities are listed or are in the process of being listed on any stock exchange in India or outside India and having net worth of less than Rs. 500 Crores

· Unlisted Companies having net worth of Rs. 250 Crores or more but Rs. 500 Crores.

· Holding, subsidiary, joint venture or associate companies of companies covered above.

The mandatory applicability will not be applicable to companies whose securities are listed or are in the process of being listed on SME exchange as referred to in Chapter XB or on the Institutional Trading Platform without initial public offering in accordance with the provisions of Chapter XC of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

Exemptions:

Insurance companies, banking companies and non-banking finance companies shall not be required to apply Indian Accounting Standards (Ind AS) for preparation of their financial statements either voluntarily or mandatorily.

Other Important Points:

·  A company which follows the Indian Accounting Standards (Ind AS) shall follow such standards only. In other words, any company opting to apply the Indian Accounting Standards (Ind AS) voluntarily for its financial statements shall prepare its financial statements as per the Indian Accounting Standards (Ind AS) consistently. Once the Indian Accounting Standards (Ind AS) are applied voluntarily, it shall be irrevocable and such companies shall not be required to prepare another set of financial statements in accordance with Companies (Accounting Standards) Rules, 2006.

·  Companies which do not follow the Indian Accounting Standards shall continue to follow the Companies (Accounting Standards) Rules, 2006 and shall comply with such standards only and not the Indian Accounting Standards.

Once a company starts following the Indian Accounting Standards (Ind AS) either voluntarily or mandatorily on the basis of criteria specified above, it shall be required to follow the Indian Accounting Standards (Ind AS) for all the subsequent financial statements even if any of the criteria specified does not subsequently apply to it.

· Once the applicability of Ind AS arises, the Ind AS shall apply to both stand-alone financial statements and consolidated financial statements.

· Overseas subsidiary, associate, joint venture and other similar entities of an Indian company may prepare its standalone financial statements in accordance with the requirements of the specific jurisdiction. However, such Indian company shall prepare its consolidated financial statements in accordance with the Indian Accounting Standards (Ind AS) either voluntarily or mandatorily if it meets the criteria as specified above.

· Indian company which is a subsidiary, associate, joint venture and other similar entities of a foreign company shall prepare its financial statements in accordance with the Indian Accounting Standards (Ind AS) either voluntarily or mandatorily if it meets the criteria as specified above.

Calculation of Net Worth

· The net worth shall be calculated in accordance with the stand-alone financial statements of the company as on 31st March, 2014 or the first audited financial statements for accounting period which ends after that date.

· For companies which are not in existence on 31st March, 2014 or an existing company falling under any of thresholds specified for mandatory applicability 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 specified for mandatory applicability. For example: (i) The companies meeting threshold for the first time as on 31st March, 2017 shall apply Ind AS for the financial year 2017-18 onwards. (ii) The companies meeting threshold for the first time as on 31st March, 2018 shall apply Ind AS for the financial year 2018-19 onwards and so on.

List of Indian Accounting Standards

Indian Accounting Standard (Ind AS) 101

First-time Adoption of Indian Accounting Standards

Indian Accounting Standard (Ind AS) 102

Share-based Payment

Indian Accounting Standard (Ind AS) 103

Business Combinations

Indian Accounting Standard (Ind AS) 104

Insurance Contracts

Indian Accounting Standard (Ind AS) 105

Non-current Assets Held for Sale and Discontinued Operations

Indian Accounting Standard (Ind AS) 106

Exploration for and Evaluation of Mineral Resources

Indian Accounting Standard (Ind AS) 107

Financial Instruments: Disclosures

Indian Accounting Standard (Ind AS) 108

Operating Segments

Indian Accounting Standard (Ind AS) 109

Financial Instruments

Indian Accounting Standard (Ind AS) 110

 Consolidated Financial Statements

Indian Accounting Standard (Ind AS) 111

Joint Arrangements

Indian Accounting Standard (Ind AS) 112

Disclosure of Interests in Other Entities

Indian Accounting Standard (Ind AS) 113

Fair Value Measurement

Indian Accounting Standard (Ind AS) 114

Regulatory Deferral Accounts

Indian Accounting Standard (Ind AS) 115

Revenue from Contracts with Customers

Indian Accounting Standard (Ind AS) 1

Presentation of Financial Statements

Indian Accounting Standard (Ind AS) 2

Inventories

Indian Accounting Standard (Ind AS) 7

Statement of Cash Flows

Indian Accounting Standard (Ind AS) 8

Accounting Policies, Changes in Accounting Estimates and Errors

Indian Accounting Standard (Ind AS) 10

Events after the Reporting Period

Indian Accounting Standard (Ind AS) 12

Income Taxes

Indian Accounting Standard (Ind AS) 16

Property, Plant and Equipment

Indian Accounting Standard (Ind AS) 17

Leases

Indian Accounting Standard (Ind AS) 19

Employee Benefits

Indian Accounting Standard (Ind AS) 20

Accounting for Government Grants and Disclosure of Government Assistance

Indian Accounting Standard (Ind AS) 21

The Effects of Changes in Foreign Exchange Rates

Indian Accounting Standard (Ind AS) 23

Borrowing Costs

Indian Accounting Standard (Ind AS) 24

Related Party Disclosures

Indian Accounting Standard (Ind AS) 27

Separate Financial Statements

Indian Accounting Standard (Ind AS) 28

Investments in Associates and Joint Ventures

Indian Accounting Standard (Ind AS) 29

Financial Reporting in Hyperinflationary Economies

Indian Accounting Standard (Ind AS) 32

Financial Instruments: Presentation

Indian Accounting Standard (Ind AS) 33

Earnings per Share

Indian Accounting Standard (Ind AS) 34

Interim Financial Reporting

Indian Accounting Standard (Ind AS) 36

Impairment of Assets

Indian Accounting Standard (Ind AS) 37

Provisions, Contingent Liabilities and Contingent Assets

Indian Accounting Standard (Ind AS) 38

Intangible Assets

Indian Accounting Standard (Ind AS) 40

Investment Property

Indian Accounting Standard (Ind AS) 41

Agriculture

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Category Corporate Law, Other Articles by - CS DHANAPAL 



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