Quick Summary
The Council, at its 433rd meeting, held on August 13-15, 2024, considered the revised criteria for classification of Non-company entities for applicability of Accounting Standards issued by The Institute of Chartered Accountants of India (ICAI) to Non-company entities (Enterprises) and recommended to revise the same. The revised scheme for applicability of Accounting Standards to Non-company entities shall come into effect in respect of accounting periods commencing on or after April 1, 2024, wh
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FAQ :
The revised scheme for the applicability of Accounting Standards to Non-company entities comes into effect for accounting periods commencing on or after April 1, 2024.
Non-company entities are now classified into two categories: Micro, Small and Medium Sized Entities (MSMEs) and Large entities.
An entity is considered an MSME if its securities are not listed, it's not a bank, financial institution, or insurance company, its turnover does not exceed ₹250 crore, borrowings do not exceed ₹50 crore, and it's not a holding or subsidiary of a non-MSME entity, all based on the immediately preceding accounting year.
No, MSMEs are provided with certain exemptions and relaxations from complying with specific requirements of various Accounting Standards.
Accounting Standards AS 3 (Cash Flow Statements), AS 17 (Segment Reporting), and AS 24 (Discontinuing Operations) are not applicable to all MSMEs in their entirety.
If an MSME previously qualified for an exemption but no longer does in the current period, the relevant standards become applicable from the current period. The figures for the previous corresponding period do not need to be revised solely due to this change, but this fact must be disclosed.
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