The Institute of Chartered Accountants of India (ICAI) is the premier body responsible for formulation of Accounting Standards for all business oriented entities. While formulating Accounting Standards, the ICAI exposes the draft of the standard and invites comments from its members and the public at large. The comments received are invaluable as they help to a great extent in finalizing the standard. The Accounting Standards Board of ICAI considers each and every comment received and examines whether any change is required to the draft of the standard so exposed.
CA. K. Raghu, President ICAI, said “The comments of the members & public would be uploaded on the website of ICAI for public viewing. This marks the beginning of a new era of transparency and governance to which ICAI is committed. Comments to the various documents issued by ICAI which were hitherto sent by e-mail or snail mail can now be submitted online also by uploading the comment file on the website of ICAI.”
The Hon’ble Finance Minister in his Budget Speech proposed that the new Indian Accounting Standards (Ind AS) converged with IFRS shall be adopted by the Indian Companies from the financial year 2015-16 voluntarily and from the financial year 2016-17 on mandatory basis. In this regard, the roadmap submitted to the Ministry of Corporate Affairs (MCA) by the ICAI suggests that the latest IFRS should be used for the purpose of formulation of Ind AS.
Post-February 2011 when 35 Ind AS were placed on the MCA’s website, to continue to remain at par with the IFRS, the Council of the ICAI has finalised the following seven new/revised Ind ASs (to replace the exiting Ind AS) alongwith certain amendments to other Ind ASs corresponding to the new/revised IFRSs issued by the International Accounting Standards Board (IASB):
- Ind AS 110, Consolidated Financial Statements corresponding to IFRS 10, Consolidated Financial Statements
- Ind AS 111, Joint Arrangements corresponding to IFRS 11, Joint Arrangements
- Ind AS 112, Disclosure of Interests in Other Entities corresponding to IFRS 12, Disclosure of Interests in Other Entities
- Ind AS 113, Fair Value Measurement, corresponding to IFRS 13.
- Ind AS 27, Separate Financial Statements corresponding to IAS 27, Separate Financial Statements
- Ind AS 28, Investments in Associates and Joint Ventures corresponding to IAS 28, Investments in Associates and Joint Ventures and
- Ind AS 19, Employee Benefits corresponding to IAS 19 Employee Benefits.
CA. K. Raghu, added, “These new/revised Ind ASs are being submitted to the recently constituted National Advisory Committee on Accounting Standards (NACAS) for its consideration.”
Recently, the Accounting Standards Board of the ICAI has issued, inter alia, the Exposure Drafts of the following three new Ind ASs corresponding to the new /revised IFRSs issued by the IASB:
- Ind AS 41, Agriculture corresponding to IAS 41, Agriculture, (Last date for comments October 15, 2014)
- Ind AS 109, Financial Instruments, corresponding to IFRS 9, Financial Instruments (Last date for comments October 25, 2014)
- Ind AS 115, Revenue from Contracts with Customers, corresponding to IFRS 15, Revenue from Contracts with Customers (Last date for comments October 25, 2014)
Ind AS 41, Agriculture, was earlier not notified as there were concerns with regard to the then IAS 41, Agriculture, particularly with regard to measurement of biological assets (plants and animals) at fair value. These concerns were taken up by the ICAI and some other countries such as Malaysia with IASB. IASB has now addressed these concerns by amending IAS 41, scoping out bearer plants out of this standard and scoping in the same in IAS 16, Property, Plant and Equipment, thereby requiring such plants to be measured at cost unless revaluation model is adopted under that standard. The Exposure Draft of Ind AS 41 is based on the amended IAS 41. Ind AS 109 will replace Ind AS 39, Financial Instruments: Recognition and Measurement and Ind AS 115 will replace Ind AS 11, Construction Contracts and Ind AS 18, Revenue.
IASB issued IFRS 9 and IFRS 15 with an effective date 1 January, 2018 and 1 January 2017 respectively, permitting early application. So as to provide a stable platform to the corporates, the ICAI has decided to formulate Ind AS 109 corresponding to IFRS 9 and Ind AS 115 corresponding to IFRS 15 and make these applicable from the financial year 2015-16 voluntarily and from the financial year 2016-17 on mandatory basis. These standards would provide higher quality transparency resulting in more robust accounting.