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ind as

RAHUL JAIN (63 Points)

19 May 2018

plz send notification regarding applicability of ind as

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Naga Upendra (161 Points)
Replied 20 May 2018

Applicability of IND AS – Indian Accounting Standards

Updated on Mar 22, 2018 - 03:19:12 PM

The Ministry of Corporate Affairs (MCA) has notified the Companies (Indian Accounting Standards (IND AS)) Rules 2015, which stipulates the adoption and applicability of IND AS in a phased manner beginning from the Accounting period 2016-17 and subsequently, issued Amendment Rules 2016 to amend the 2015 rules.

Phase of adoption

MCA has notified phase-wise convergence to IND AS from current accounting standards. IND AS shall be adopted by specific classes of companies based on their Net worth and listing status. Let’s see the each of the phases in detail below:

Phase I

Mandatorily applicability of IND AS from 1st April 2016 to all companies provided:

It is a listed or unlisted company

Its Net worth is greater than or equal to Rs. 500 crores

Net worth shall be checked for previous three Financial Years (31.03.2014, 31.03.2015 and 31.03.2016).

Phase II

Mandatorily applicability of IND AS from 1st April 2017 provided:

It is a listed company or is in the process of being listed (as on 31.03.2016)

Its Net worth is greater than or equal to Rs. 250 crores but less than Rs. 500 crores (on any of the above dates).

Net worth shall be checked for previous four Financial Years i.e. as on 31.03.2014, 31.03.2015 & 31.03.2016 & as on 31.03.2017.

Phase III

Mandatorily applicability of IND AS to Banks, NBFC, Insurance companies from 1st April 2018 whose:

Net worth is more than or equal to INR 500 crores with effect from 1st April 2018.

IRDA shall notify the separate set of IND AS for Banks & Insurance Companies with effect from 1st April 2018.NBFC includes core investment companies, stock brokers, venture capitalists, etc. Net Worth shall be checked for 3 years i.e. 31.03.2016, 31.03.2017 & 31.03.2018

Phase IV

NBFC whose Net worth is more than or equal to INR 250 crores but less than 500 crores shall have mandatorily applicability of IND AS with effect from 1st April 2019.

Applicable to one, applicable to all other

If IND AS becomes applicable to a company then, IND AS shall be automatically applied to all subsidiaries, holding companies, associated companies and joint ventures irrespective of individual qualification of such companies.

In the case of foreign operations of an Indian Company, the preparation of stand-alone financial statements may continue with its jurisdictional requirements and need not be prepared as per the IND AS.

However, these entities will still have to report their IND AS adjusted numbers for their Indian parent company to prepare consolidated IND AS accounts.

Net Worth Calculation

Net worth will be determined based on the standalone accounts of the company as on 31st March 2014 or the first audited period ending after that date. Net Worth is the total of Paid-up share Capital and all reserves out of profit & securities premium account after deducting accumulated losses, deferred expenditure and miscellaneous expenditure not written off. Only capital Reserve arising out of Promoters Contribution and Govt. Grant Received can be included. Reserves created out of revaluation of assets, write back of depreciation cannot be included.

Voluntary adoption

Companies can voluntarily adopt IND AS for accounting periods beginning on or after April 01, 2015 with comparatives for the period ending 31 March 2015 or thereafter. However, once they have started reporting as per the IND AS, they cannot revert.