Accounting standards

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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)

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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