CA Mayank Gaur
With the G.S.R dated 16/Feb/2015 notified on 22/Feb/2015, Central Government in consultation with NACAS (National Advisory Committee on Accounting Standards have introduced the Companies (Indian Accounting Standard) Rules, 2015. This set of rules do hereby notifies Thirty Nine(39) Ind(AS) as of now.
The Ind(AS) is nothing but the converged IFRS modified in sync, so as to suit the Indian Economic Environment.
With the notification, govt. has cleared the path for this long awaited reform. As per the notification, the roadmap for the convergence is clear & the implementation will be made as follows:
Commencement:
The rules will be applicable from 01st Day of April, 2015.
Obligation to comply with Indian Accounting Standards (Ind(AS)):
As per the notification, the companies & their auditors shall comply with these Ind(AS) in the following manner –
1. Any Company, may comply with Ind(AS) for financial statements beginning from 01st April, 2015 voluntarily. The comparatives# for the periods ending on 31st March, 2015 will be taken for this compliance.
Kindly note that, once adopted then there is no turning back, the company can’t prepare the financial statements in accordance with Accounting Standards specified in Annexure to Companies (Accounting Standards) Rules, 2006 again. It will have to comply with Ind(AS) only.
#Comparatives
“Comparatives” shall mean comparative figures for the preceding accounting period.
(For further clarity of Comparatives, refer SA 710(Revised) “Comparative Information—Corresponding Figures and Comparative Financial Statements” visit the following link :- http://220.227.161.86/18793annex1SA710.pdf
2. For the following companies, it will be mandatory to adopt the notified Ind(AS) for the financial Statements beginning on 31st March, 2016:
a. Companies whose Equity or Debt securities are:
i. Either Listed, or
ii. Are in the process of listing
on ANY Stock exchange in India or Abroad.
Further, the company shall have a NET WORTH* of Rs. 500 Crores or More.
*Net Worth
Paid Up Share Capital + All reserves created out of Profits + Security Premium – Accumulated Losses – Deferred Expenditure – Misc. Expenses Not written off.
(However, It doesn’t include Reserves created out of
- Revaluation of Assets,
- Write Back of Depreciation, and
- Amalgamation)
b. Unlisted Companies having a Net worth of Rs. 500 Crores or More.
c. The Holding, Subsidiary, Joint Venture or Associate Companies of the above.
3. For the following companies, it will be mandatory to adopt the notified Ind(AS) for the financial Statements beginning on 31st March, 2017:
a. Companies whose Equity or Debt securities are:
i. Either Listed, or
ii. Are in the process of listing
on ANY Stock exchange in India or Abroad.
Further, the company shall have a NET WORTH* less than Rs. 500 Crores.
*Net Worth– (Same as above)
b. Unlisted Companies having a Net worth of Rs. 250 Crores or more but less than Rs. 500 Crores.
c. The Holding, Subsidiary, Joint Venture or Associate Companies of the above.
Non-applicability:
The following rules are not applicable on the following companies:
- Insurance Companies.
- Banking Companies.
- NBFC’s
For the rest of companies, no official announcement has been made so far, however, Any company can voluntarily adopt the Ind(AS) as a good corporate practice.
SOME QUESTIONS WHICH ARE NOT CLEAR.
1.WHICH ACCOUNTING STANDARDS TO FOLLOW-STANDARDS BY NACAS OR STANDARDS BY ICAI.
2.IS NACAS THE NEW REGULATOR FOR ACCOUNTING STANDARDS
3.WITH NACAS IN -IS ICAI OUT OF PREPARATION AND REGULATING ACCOUNTING STANDARDS AND WHAT WILL HAPPEN TO ACCOUNTING STANDARDS OF ICAI
4.IFRS – ICAI IFRS AND NACAS IFRS – WHICH IFRS TO FOLLOW
5.IS NACAS ACCOUNTING STANDARDS AND ICAI STANDARDS SAME OR DIFFERENT
UNLESS THE ABOVE ARE MADE CLEAR BY THE GOVERNMENT CORPORATES WILL SUFFER AT THE HANDS OF STATUTORY AUDITORS AND CONSULTANTS WHO WILL GIVE DIFFERENT DIFFERENT VARIATIONS OF WHICH ACCOUNTING STANDARDS TO FOLLOW-NACAS OR ICAI.