IND AS applicability IN CASE OF AOP (JV)

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This discussion clarifies the accounting and audit requirements for Joint Ventures (JVs) structured as Associations of Persons (AOPs) when the parent company follows Indian Accounting Standards (Ind AS). While tax audits are mandatory for AOPs exceeding specific turnover thresholds under Section 44AB, the parent company must also prepare its financial statements according to Ind AS. This includes appropriately reflecting the JVs' financials, even if the AOPs themselves don't independently prepare full Ind AS compliant statements.

amit saini

amit saini (Querist)

07 September 2024 A company with Ind AS has several JV`s All AOP. Do we need to plan tax audits only or do we need to prepare as per IND AS?

amit saini

amit saini (Querist)

11 September 2024 Dear Expert,
A company with Ind AS has several JV`s All AOP. Do we need to plan tax audits only or do we need to prepare as per IND AS?

Please reply regarding this matter as soon as possible.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

15 December 2024 Tax Audit is required if turnover or gross receipts exceed the limits set under Section 44AB. Each AOP might need a separate audit if they meet the criteria.
Ind AS Preparation is necessary for financial reporting for companies adopting Ind AS. The financial statements of the company should include the JVs in a manner consistent with Ind AS, even if the AOPs themselves might not be preparing Ind AS compliant financials independently.
Therefore, you need to plan for both:
Conducting tax audits for entities (including AOPs) that meet the criteria under tax laws.
Preparing financial statements according to Ind AS, ensuring that the consolidation or reflection of JVs' financials is done appropriately.

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