Accounting standards

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

31 July 2015 with reference to the Accounting standards in India , Understand that in India,we may use two set of standards
1. Ind ASs ( 39 standards)for listed companies and networth of rs.500 crores
2.Standards issued by ICAI for those not following Ind ASs ( 31 standards)

Can you please clarify that the above information is correct .?
Whether the company can use mix of both the standards wherever applicable?

Querist : Anonymous

Querist : Anonymous (Querist)

04 August 2015 can anybody clarify this query

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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14 July 2024 Your understanding regarding the application of accounting standards in India is almost correct, but there are a few clarifications needed:

### 1. Ind AS (Indian Accounting Standards):

- **Applicability:** Ind AS are applicable to certain classes of companies based on their size and listing status.
- Listed companies and their subsidiaries with a net worth of Rs. 500 crores or more are required to follow Ind AS for their financial statements.
- Unlisted companies may voluntarily adopt Ind AS if they meet certain criteria (such as net worth thresholds).

- **Number of Standards:** There are currently 39 Ind AS notified by the Ministry of Corporate Affairs (MCA).

### 2. Standards issued by ICAI (Institute of Chartered Accountants of India):

- **Applicability:** Companies that are not required to follow Ind AS or have chosen not to adopt Ind AS can follow the accounting standards issued by the ICAI.
- **Number of Standards:** There are 32 accounting standards issued by the ICAI (ICAI-AS), which are based on the old Indian GAAP (Generally Accepted Accounting Principles) framework.

### Mix of Standards:

- **Consistency Principle:** Once a company chooses to adopt Ind AS, it should apply Ind AS consistently to all financial statements.
- **Transitional Provisions:** If a company transitions to Ind AS, it must follow the specified transitional provisions and make necessary adjustments.

### Clarification Points:

- **Mixed Application:** Generally, companies cannot mix Ind AS and ICAI-AS standards within the same set of financial statements. They must choose to apply either Ind AS or ICAI-AS for all applicable accounting standards.
- **Voluntary Adoption:** Unlisted companies below the net worth threshold and not required to follow Ind AS can voluntarily adopt Ind AS, but they must do so for all applicable standards.

### Conclusion:

- Your understanding that Ind AS applies to listed companies meeting the net worth threshold and certain other entities is correct.
- Companies can choose to adopt Ind AS voluntarily if they meet the criteria, but they must apply it consistently across all applicable standards.
- Once a company adopts Ind AS, it must continue to apply Ind AS for subsequent financial statements unless there is a specific change in regulatory requirements or voluntary de-recognition.

For precise guidance on the applicability and adoption of accounting standards in India, including any recent updates or changes, it is advisable to consult with a qualified chartered accountant or professional advisor familiar with Indian accounting regulations.

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