ICAI issues Accounting Standards to guarantee the precision and security of financial statements. For an entity to adopt Indian Accounting standards for the first time, the Board has circulated this standard to assure smooth application. Under this convergence, the presentation of the financial statements will represent all the changes as per the converged standards.

Goals of Indian accounting standards:

Let us understand the goals of applying Indian accounting standards. Here they are:

• These standards ensure that businesses in India adopt these standards to execute globally acknowledged best practices.
•  Also, these standards help in maintaining compliances worldwide.
• Have a unified and intuitive framework for a single accounting system.
• Following IFRS principles, the Board presented the measure to serve as a guide for the standard implementation.
• The best part about this standard is that global companies can analyze and understand accounting systems used in India.
• This standard will make the yearly financial statements and organization account transparent.
• Implementation of these standards ensures that companies comply with global terms.

Let us understand the implementation stages:

Phase I pertains to the following organizations:

• Listed Companies (companies whose securities are listed on a recognized stock exchange).
• A net worth of more than Rs. 500 crores.

Phase II:

All companies have to adopt Ind AS (Indian Accounting Standards) from April 1, 2017.

Phase II pertains to the following companies:

• Listed companies (companies whose securities are listed on a recognized stock exchange – as of March 31, 2016.
• The net worth of more than Rs. 250 crores but less than Rs 500 crore.

Phase III:

Phase III is vital for Ind implementation by banks, NBFIs, SEBI regulated companies, and insurance companies, effective from April 1, 2018.

Phase III applies to the following companies:

• Companies having a net worth of more than Rs. 500 crores. The net worth requirement will only apply to the company until April 1, 2018.

Phase IV:

All NBFCs whose net worth is more than Rs. Two hundred fifty crores but less than Rs 500 crores. This implementation will be taken into account starting April 1, 2019.

The following table provides a list of the major applicable Ind as:

Ind AS 1 Presentation of Financial Statements

Ind AS 2 Inventories Accounting

Ind AS 7 Statement of Cash Flows

Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors

Ind AS 10 Events after Reporting Period

Ind AS 11 Construction Contracts

Ind AS 12 Income Taxes

Ind AS 16 Property, Plant and Equipment

Ind AS 17 Leases

Ind AS 18 Revenue

Ind AS 19 Employee Benefits

Ind AS 20 Accounting for Government Grants and Disclosure of Government Assistance

Ind AS 21 The Effects of Changes in Foreign Exchange Rates

Ind AS 23 Borrowing Costs

Ind AS 24 Related Party Disclosures

Ind AS 27 Separate Financial Statements

Ind AS 28 Investments in Associates and Joint Ventures

Ind AS 29 Financial Reporting in Hyperinflationary Economies

Ind AS 32 Financial Instruments: Presentation

Ind AS 33 Earnings per Share

Ind AS 34 Interim Financial Reporting

Ind AS 36 Impairment of Assets

Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets

Ind AS 38 Intangible Assets

Ind AS 40 Investment Property

Ind AS 41 Agriculture

Ind AS 101 First-time adoption of Ind AS

Ind AS 102 Share Based payments

Ind AS 103 Business Combination

Ind AS 104 Insurance Contracts

Ind AS 105 Non-Current Assets Held for Sale and Discontinued Operations

Ind AS 106 Exploration for and Evaluation of Mineral Resources

Ind AS 107 Financial Instruments: Disclosures

Ind AS 108 Operating Segments

Ind AS 109 Financial Instruments

Ind AS 110 Consolidated Financial Statements

Ind AS 111 Joint Arrangements

Ind AS 112 Disclosure of Interests in Other Entities

Ind AS 113 Fair Value Measurement

Ind AS 114 Regulatory Deferral Accounts

Ind AS 115 Revenue from Contracts with Customers

Ind AS 116 Leases

The adoption of Indian Accounting Standards (Ind SA) has improved the comparability of financial information of Indian companies worldwide. However, Ind AS involves the application of several new and complex concepts. This requires a high level of assessment and evaluation, accompanied by detailed qualitative and quantitative information according to Ind AS.

Should you have any queries on Accounting & Finance, contact us now.

Our Finance & Accounting experts would be happy to help you assist you with the compliance needs.