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“Unlock the complexity of Indian Accounting Standards (Ind AS) with our simplified overview. Learn the applicability, principles, and key standards, including Presentation of Financial Statements, Inventories, Statement of Cash Flows, and more. Stay compliant and elevate financial reporting in India.”
Indian accounting standards (Ind AS)
Indian accounting standards (Ind AS) are a set of accounting principles that govern the accounting and reporting of financial transactions and statements of companies in India. They are based on the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), with some modifications to suit the Indian context. The Ind AS are issued by the Accounting Standards Board (ASB) of the Institute of Chartered Accountants of India (ICAI), under the authority of the Ministry of Corporate Affairs (MCA).
The Ind AS are applicable to certain classes of companies as prescribed by the MCA, such as listed companies, unlisted companies with a net worth of more than 250 crore rupees, and holding, subsidiary, joint venture or associate companies of such companies. The Ind AS are mandatory for these companies from 1 April 2016, with a transition period of one year. The Ind AS are also voluntary for other companies that meet certain criteria.
The Ind AS cover various aspects of accounting, such as recognition, measurement, presentation and disclosure of financial items and transactions. There are currently 40 Ind AS that deal with different topics, such as financial instruments, revenue recognition, business combinations, leases, income taxes, etc. The list of Ind AS and their brief summaries can be found here. The Ind AS also provide guidance on how to deal with the differences between the previous Indian GAAP and the Ind AS, and how to prepare the first-time adoption of Ind AS.
The main objective of the Ind AS is to enhance the quality and comparability of financial reporting in India, and to bring it closer to the global standards. The Ind AS also aim to improve the transparency and reliability of financial information, and to facilitate the access to global capital markets for Indian companies.
Here is the list of Indian accounting standards (Ind AS) and their overview:
| IND AS | Name of IND AS | Details of IND AS | Applicability of IND AS |
| 1 | Presentation of Financial Statements | This standard sets out the overall framework and responsibilities for the presentation of general purpose financial statements, including the structure and content of the statement of financial position, statement of profit and loss, statement of changes in equity and statement of cash flows. | This standard is applicable to all entities that prepare financial statements under Ind AS, unless another Ind AS requires or permits a different presentation. This standard requires an entity to present a complete set of financial statements at least annually, comprising a statement of financial position, a statement of profit and loss and other comprehensive income, a statement of changes in equity, a statement of cash flows, notes comprising significant accounting policies and other explanatory information, and comparative information for the preceding period. |
| 2 | Inventories | This standard prescribes the accounting treatment for inventories, such as the measurement at cost or net realisable value, the cost formulas for different types of inventories, and the recognition of expenses in the period of sale or consumption. | This standard is applicable to all inventories, except work in progress arising under construction contracts (covered by Ind AS 11), financial instruments (covered by Ind AS 109) and biological assets related to agricultural activity and agricultural produce at the point of harvest (covered by Ind AS 41). This standard requires an entity to measure inventories at the lower of cost and net realisable value, using either the first-in first-out (FIFO) method or the weighted average cost method for cost determination, and to recognise inventory costs as an expense in the period of sale or consumption |
| 7 | Statement of Cash Flows | This standard requires an entity to present a statement of cash flows as part of its financial statements, showing the changes in cash and cash equivalents during a period classified by operating, investing and financing activities | This standard is applicable to all entities that prepare financial statements under Ind AS. This standard requires an entity to present a statement of cash flows as part of its financial statements, showing the changes in cash and cash equivalents during a period classified by operating, investing and financing activities. Operating activities are the principal revenue-producing activities of the entity and other activities that are not investing or financing activities. Investing activities are the acquisition and disposal of long-term assets and other investments not included in cash equivalents. Financing activities are activities that result in changes in the size and composition of the equity capital and borrowings of the entity |
| 8 | Accounting Policies, Changes in Accounting Estimates and Errors | This standard deals with the selection, application and disclosure of accounting policies, as well as the accounting treatment and disclosure of changes in accounting policies, changes in accounting estimates and corrections of prior period errors | This standard is applicable to all entities that prepare financial statements under Ind AS and have accounting policies, changes in accounting estimates or errors. Accounting policies are the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements. A change in accounting estimate is an adjustment of the carrying amount of an asset or a liability, or the amount of the periodic consumption of an asset, that results from the assessment of the present status of, and expected future benefits and obligations associated with, assets and liabilities. An error is an omission from, or misstatement in, the entity’s financial statements for one or more prior periods arising from a failure to use, or misuse of, reliable information that was available when financial statements for those periods were authorised for issue; and could reasonably be expected to have been obtained and taken into account in the preparation and presentation of those financial statements. This standard requires an entity to select and apply its accounting policies consistently for similar transactions, other events and conditions, unless an Ind AS specifically requires or permits categorisation of items for which different policies may be appropriate. An entity should change its accounting policy only if the change is required by an Ind AS or results in providing reliable and more relevant information about the effects of transactions, other events or conditions on the entity’s financial position, financial performance or cash flows. An entity should account for a change in accounting policy retrospectively by adjusting the opening balance of each affected component of equity for the earliest prior period presented and the other comparative amounts disclosed for each prior period presented as if the new accounting policy had always been applied. An entity should recognise the effect of a change in an accounting estimate prospectively by including it in profit or loss in the period of the change, if the change affects that period only; or in the period of the change and future periods, if the change affects both. An entity should correct material prior period errors retrospectively by adjusting the opening balance of each affected component of equity for the earliest prior period presented and the other comparative amounts disclosed for each prior period presented as if the error had never occurred |
| 10 | Events after the Reporting Period | This standard defines events after the reporting period as those that occur between the end of the reporting period and the date when the financial statements are authorised for issue, and prescribes whether they should be adjusted or disclosed in the financial statements. | Events after the Reporting Period. This standard is applicable to all entities that prepare financial statements under Ind AS. This standard defines events after the reporting period as those that occur between the end of the reporting period and the date when the financial statements are authorised for issue, and prescribes whether they should be adjusted or disclosed in the financial statements. Adjusting events are those that provide evidence of conditions that existed at the end of the reporting period, such as the settlement of a court case or the receipt of information about impairment of an asset. Non-adjusting events are those that indicate conditions that arose after the end of the reporting period, such as a major business combination or a natural disaster. An entity should adjust its financial statements for adjusting events and disclose the nature and estimate of their financial effect for non-adjusting events |
| 11 | Construction Contracts | This standard applies to the accounting for construction contracts in the financial statements of contractors, and specifies how contract revenue and contract costs should be recognised based on the stage of completion method or the completed contract method. | This standard is applicable to all entities that prepare financial statements under Ind AS and have construction contracts (contracts specifically negotiated for the construction of an asset or a combination of assets that are closely interrelated or interdependent in terms of their design, technology and function or their ultimate purpose or use). This standard requires an entity to account for contract revenue and contract costs associated with a construction contract based on the stage of completion method or the completed contract method. The stage of completion method recognises revenue and costs in profit or loss in proportion to the stage of completion of the contract activity at the end of the reporting period. The completed contract method recognises revenue and costs in profit or loss only when the contract is completed or substantially completed |
| 12 | Income Taxes | This standard covers the accounting for current and deferred tax consequences of transactions and other events that are recognised in an entity’s financial statements or tax returns, based on the balance sheet approach. | This standard is applicable to all entities that prepare financial statements under Ind AS and have income taxes (domestic and foreign taxes that are based on taxable profits, including withholding taxes that are payable by a subsidiary, associate or joint arrangement on distributions to the reporting entity). This standard requires an entity to account for current and deferred tax consequences of transactions and other events that are recognised in an entity’s financial statements or tax returns, based on the balance sheet approach. Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (tax loss) for a period. Deferred tax is the amount of income taxes payable (recoverable) in future periods in respect of temporary differences (differences between the carrying amount of an asset or liability in the balance sheet and its tax base), unused tax losses and unused tax credits1 |
| 16 | Property, Plant and Equipment | This standard prescribes the accounting treatment for property, plant and equipment (PPE), such as the recognition of assets, determination of their carrying amounts, depreciation charges and impairment losses. | This standard is applicable to all entities that prepare financial statements under Ind AS and have property, plant and equipment (tangible items that are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and are expected to be used during more than one period). This standard requires an entity to recognise an item of property, plant and equipment as an asset when it is probable that future economic benefits associated with the item will flow to the entity and the cost of the item can be measured reliably. An entity should measure an item of property, plant and equipment initially at its cost, which includes its purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. After initial recognition, an entity should choose either the cost model (carrying amount is cost less any accumulated depreciation and any accumulated impairment losses) or the revaluation model (carrying amount is fair value at the date of revaluation less any subsequent accumulated depreciation and any subsequent accumulated impairment losses) as its accounting policy for each class of property, plant and equipment and apply it consistently. An entity should depreciate each part of an item of property, plant and equipment over its useful life (the period over which an asset is expected to be available for use by an entity) on a systematic basis that reflects the pattern in which the asset’s future economic benefits are expected to be consumed by the entity. An entity should disclose information that enables users of its financial statements to evaluate the nature and extent of its property, plant and equipment and the related risks |
| 17 | Leases | This standard classifies leases into finance leases and operating leases based on the extent to which risks and rewards incidental to ownership are transferred from lessors to lessees, and prescribes different accounting treatments for each type of lease by both parties. | This standard is applicable to all entities that prepare financial statements under Ind AS and have leases, except when another Ind AS requires or permits a different accounting treatment. A lease is an agreement whereby the lessor conveys to the lessee in return for a payment or series of payments the right to use an asset for an agreed period of time. This standard classifies leases into finance leases and operating leases based on the extent to which risks and rewards incidental to ownership are transferred from lessors to lessees. A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of an asset. An operating lease is a lease other than a finance lease. This standard requires a lessee to recognise assets held under finance leases as assets and liabilities in its balance sheet at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments, and depreciate them over the shorter of the lease term or their useful life. A lessee should recognise lease payments under operating leases as an expense in profit or loss on a straight-line basis over the lease term. A lessor should recognise assets held under finance leases in its balance sheet and present them as a receivable at an amount equal to the net investment in the lease, and recognise finance income over the lease term based on a pattern reflecting a constant periodic rate of return on the lessor’s net investment. A lessor should recognise assets held under operating leases in its balance sheet according to the nature of the asset, and depreciate them over their useful life. A lessor should recognise lease income from operating leases in profit or loss on a straight-line basis over the lease term |
| 18 | Revenue | This standard provides guidance on the recognition, measurement and disclosure of revenue arising from transactions involving the sale of goods, rendering of services and use by others of an entity’s assets yielding interest, royalties or dividends. | This standard is applicable to all entities that prepare financial statements under Ind AS and have revenue arising from transactions and events other than those covered by other Ind AS (such as leases, construction contracts, financial instruments, insurance contracts and extractive industries). Revenue is the gross inflow of economic benefits during the period arising in the course of the ordinary activities of an entity when those inflows result in increases in equity, other than increases relating to contributions from equity participants. This standard requires an entity to measure revenue at the fair value of the consideration received or receivable, taking into account the amount of any trade discounts and volume rebates allowed by the entity. An entity should recognise revenue when it is probable that future economic benefits will flow to the entity and these benefits can be measured reliably. The standard also provides guidance on how to recognise revenue for different types of transactions, such as sale of goods, rendering of services, interest, royalties and dividends |
| 19 | Employee Benefits | This standard covers all forms of employee benefits, such as short-term benefits, post-employment benefits (including pensions), other long-term benefits and termination benefits, and prescribes how they should be accounted for by employers. | This standard is applicable to all entities that prepare financial statements under Ind AS and have employee benefits (all forms of consideration given by an entity in exchange for service rendered by employees or for the termination of employment). Employee benefits include short-term benefits (such as wages, salaries, social security contributions, paid annual leave and paid sick leave), post-employment benefits (such as pensions, other retirement benefits, post-employment life insurance and post-employment medical care), other long-term benefits (such as long-service leave or sabbatical leave, jubilee or other long-service benefits, long-term disability benefits and deferred compensation) and termination benefits (such as severance pay, outplacement services and retirement gratuities). This standard requires an entity to recognise a liability when an employee has provided service in exchange for employee benefits to be paid in the future and an expense when the entity consumes the economic benefit arising from service provided by an employee in exchange for employee benefits. The standard also prescribes how to measure different types of employee benefits, such as defined contribution plans (plans under which an entity pays fixed contributions into a separate entity and has no legal or constructive obligation to pay further contributions), defined benefit plans (plans other than defined contribution plans) and other employee benefits |
| 20 | Accounting for Government Grants and Disclosure of Government Assistance | This standard deals with the accounting treatment and disclosure of government grants (non-reciprocal transfers from government to an entity) and other forms of government assistance (actions by government to provide economic benefits to an entity) that do not constitute grants. | Accounting for Government Grants and Disclosure of Government Assistance. This standard is applicable to all entities that prepare financial statements under Ind AS and have government grants (assistance by government in the form of transfers of resources to an entity in return for past or future compliance with certain conditions relating to the operating activities of the entity) or other forms of government assistance (actions by government designed to provide an economic benefit specific to an entity or range of entities qualifying under certain criteria that do not constitute government grants). Government refers to government, government agencies and similar bodies whether local, national or international. This standard requires an entity to recognise government grants as income over the periods necessary to match them with the related costs that they are intended to compensate, on a systematic basis. Government grants related to assets are presented in the balance sheet either by setting up the grant as deferred income or by deducting the grant in arriving at the carrying amount of the asset. Government grants related to income are presented in profit or loss either separately or under a general heading such as ‘other income’, or deducted in reporting the related expense. An entity should disclose the nature and extent of government grants recognised in the financial statements and unfulfilled conditions and other contingencies attaching to government assistance that has been received |
| 21 | The Effects of Changes in Foreign Exchange Rates | This standard prescribes how to account for foreign currency transactions and foreign operations in the financial statements of an entity, including how to translate foreign currency items into the functional currency (the currency of the primary economic environment in which an entity operates) and how to report exchange differences | This standard is applicable to all entities that prepare financial statements under Ind AS and have foreign currency transactions (transactions that are denominated in or require settlement in a foreign currency) or foreign operations (subsidiaries, associates, joint arrangements or branches of a reporting entity whose activities are based in a country or currency other than that of the reporting entity). A foreign currency is a currency other than the functional currency (the currency of the primary economic environment in which an entity operates) of an entity. This standard requires an entity to record foreign currency transactions on initial recognition in its functional currency by applying the spot exchange rate (the exchange rate for immediate delivery) between the functional currency and the foreign currency at the date of the transaction. At each subsequent balance sheet date, foreign currency monetary items (items that are receivable or payable in fixed or determinable amounts of money) should be translated using the closing rate (the spot exchange rate at the balance sheet date), and foreign currency non-monetary items (items that are not monetary items) that are measured at historical cost should be translated using the exchange rate at the date of the transaction. Foreign exchange differences arising on translation or settlement of monetary items should be recognised in profit or loss, except for those arising from borrowings in foreign currencies that provide a hedge against a net investment in a foreign operation, which should be recognised in other comprehensive income until the disposal of the net investment. An entity should translate the results and financial position of its foreign operations into its presentation currency (the currency in which financial statements are presented) using the following procedures: assets and liabilities should be translated at the closing rate at the date of that balance sheet; income and expenses should be translated at exchange rates at the dates of the transactions; and all resulting exchange differences should be recognised in other comprehensive income |
| 23 | Borrowing Costs | This standard specifies that borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset (an asset that necessarily takes a substantial period of time to get ready for its intended use or sale) should be capitalised as part of the cost of that asset, and other borrowing costs should be recognised as an expense in the period in which they are incurred. | This standard is applicable to all entities that prepare financial statements under Ind AS and have borrowing costs (interest and other costs that an entity incurs in connection with the borrowing of funds). This standard requires an entity to capitalise borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset (an asset that necessarily takes a substantial period of time to get ready for its intended use or sale) as part of the cost of that asset. Other borrowing costs should be recognised as an expense in profit or loss in the period in which they are incurred. An entity should suspend capitalisation of borrowing costs during extended periods in which it suspends active development of a qualifying asset. An entity should cease capitalising borrowing costs when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete1 |
| 24 | Related Party Disclosures | This standard defines related parties as those that have control, joint control or significant influence over an entity, or are members of the same group as the entity, and requires an entity to disclose the nature and extent of its transactions and outstanding balances with related parties, as well as the compensation of key management personnel | This standard is applicable to all entities that prepare financial statements under Ind AS and have related parties (parties that are related to an entity if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions, or if they are members of the same group or have a common key management personnel). Related parties include parent entities, subsidiaries, associates, joint arrangements, key management personnel and their close family members, and entities that are under common control or significant influence of any of the above parties. This standard requires an entity to disclose information that enables users of its financial statements to evaluate the nature and extent of its relationships with related parties and the effects of those relationships on its financial position and performance. Such information includes the identity of related parties, the nature and amount of transactions with related parties, outstanding balances with related parties, provisions for doubtful debts related to related party balances, and any guarantees given or received from related parties |
| 27 | Consolidated and Separate Financial Statements | This standard requires an entity that controls one or more other entities (subsidiaries) to present consolidated financial statements that include the financial information of the parent and its subsidiaries as a single economic entity, and also prescribes how to account for investments in subsidiaries, jointly controlled entities and associates in separate financial statements. | This standard is applicable to all entities that prepare financial statements under Ind AS and have investments in subsidiaries, associates or joint ventures. A subsidiary is an entity that is controlled by another entity (the parent). An associate is an entity over which an investor has significant influence. A joint venture is an arrangement whereby two or more parties have joint control. This standard requires an entity to present separate financial statements in addition to consolidated financial statements (if any), unless it is exempted by law or regulation from presenting consolidated financial statements or meets certain criteria for not presenting consolidated financial statements. Separate financial statements are those presented by a parent, an investor in an associate or a joint venturer in a joint venture, in which the investments are accounted for at cost or in accordance with Ind AS 109 (Financial Instruments). An entity should disclose in its separate financial statements the fact that it has investments in subsidiaries, associates or joint ventures and the nature of those investments |
| 28 | Investments in Associates and Joint Ventures | This standard defines an associate as an entity over which an investor has significant influence, and a joint venture as an arrangement in which two or more parties have joint control, and requires an investor to account for its investments in associates and joint ventures using the equity method, unless they are held by a venture capital organisation or a mutual fund, unit trust or similar entity, in which case they are measured at fair value through profit or loss | This standard is applicable to all entities that prepare financial statements under Ind AS and have investments in associates or joint ventures. An associate is an entity over which an investor has significant influence (the power to participate in the financial and operating policy decisions of the investee but not control or joint control over those policies). A joint venture is an arrangement whereby two or more parties have joint control (the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control). This standard requires an entity to account for its investments in associates or joint ventures using the equity method (a method of accounting whereby the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the investor’s share of the investee’s net assets). The investor’s profit or loss includes its share of the investee’s profit or loss and the investor’s other comprehensive income includes its share of the investee’s other comprehensive income |
| 29 | Financial Reporting in Hyperinflationary Economies | This standard applies to the financial statements of an entity whose functional currency is the currency of a hyperinflationary economy (an economy that experiences cumulative inflation of approximately 100% or more over three years), and requires such an entity to restate its financial statements in terms of the measuring unit current at the end of the reporting period, using a general price index that reflects changes in general purchasing power. | This standard is applicable to all entities that prepare financial statements under Ind AS and have a functional currency that is the currency of a hyperinflationary economy (an economy that has cumulative inflation of approximately 100% or more over three years). This standard requires an entity to restate its financial statements in terms of the measuring unit current at the end of the reporting period by applying a general price index that reflects changes in general purchasing power. The gain or loss on the net monetary position (the excess of monetary assets over monetary liabilities) should be included in profit or loss and separately disclosed. The restated amount of a non-monetary item (an item that is not a monetary item) is not reduced below its recoverable amount |
| 32 | Financial Instruments Presentation | This standard establishes principles for presenting financial instruments as liabilities or equity and for offsetting financial assets and financial liabilities, based on their substance rather than their legal form. | This standard is applicable to all entities that prepare financial statements under Ind AS and have financial instruments (contracts that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity). This standard prescribes how to classify, present and disclose financial instruments as either financial assets, financial liabilities or equity instruments according to their substance and contractual terms. The classification determines how a financial instrument is measured, whether interest, dividends, losses and gains are recognised in profit or loss or other comprehensive income, and what disclosures are required. The standard also establishes principles for offsetting financial assets and financial liabilities when an entity has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously |
| 33 | Earnings per Share | This standard prescribes how to calculate and present basic earnings per share (EPS) and diluted EPS for entities whose ordinary shares or potential ordinary shares are publicly traded or are required to disclose EPS by law or regulation. | This standard is applicable to all entities that prepare financial statements under Ind AS and whose ordinary shares or potential ordinary shares are publicly traded or that are in the process of issuing such shares to the public. Ordinary shares are equity instruments that are subordinate to all other classes of equity instruments. Potential ordinary shares are financial instruments or other contracts that may entitle their holders to ordinary shares. This standard requires an entity to present basic and diluted earnings per share (EPS) for profit or loss from continuing operations attributable to the ordinary equity holders of the parent entity and for profit or loss attributable to the ordinary equity holders of the parent entity for the period for each class of ordinary shares that has a different right to share in profit for the period. Basic EPS is calculated by dividing profit or loss attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is calculated by adjusting profit or loss attributable to ordinary equity holders of the parent entity and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares |
| 34 | Interim Financial Reporting | This standard applies to an entity that is required or elects to publish interim financial reports in accordance with Ind AS, and prescribes the minimum content of such reports, the recognition and measurement principles for interim periods, and the disclosure requirements. | This standard is applicable to all entities that prepare financial statements under Ind AS and are required or elect to publish interim financial reports in accordance with Ind AS. An interim financial report is a financial report that contains either a complete set or a condensed set of financial statements for an interim period (a financial reporting period shorter than a full financial year). This standard requires an entity to apply the same accounting policies in its interim financial statements as in its annual financial statements, except for accounting policy changes made after the date of the most recent annual financial statements that are to be reflected in the next annual financial statements. An entity should also update the information presented in its most recent annual financial statements and disclose any events or transactions that are material to understanding the changes in its financial position and performance since then |
| 36 | Impairment of Assets | This standard prescribes how to assess whether an asset is impaired (its carrying amount exceeds its recoverable amount), how to measure and recognise an impairment loss, when to reverse an impairment loss, and what disclosures to make about impaired assets. | This standard is applicable to all entities that prepare financial statements under Ind AS and have assets other than inventories, assets arising from construction contracts, deferred tax assets, assets arising from employee benefits, financial assets, investment property measured at fair value, biological assets measured at fair value less costs to sell, and contractual rights under insurance contracts. An asset is impaired when its carrying amount exceeds its recoverable amount (the higher of its fair value less costs of disposal and its value in use). This standard requires an entity to assess at each reporting date whether there is any indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required (such as goodwill or intangible assets with indefinite useful lives), the entity should estimate the recoverable amount of the asset. If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset should be reduced to its recoverable amount and an impairment loss should be recognised in profit or loss, unless the asset is carried at revalued amount in accordance with another Ind AS (such as property, plant and equipment), in which case the impairment loss should be treated as a revaluation decrease |
| 37 | Provisions, Contingent Liabilities and Contingent Assets | This standard defines a provision as a liability of uncertain timing or amount, a contingent liability as a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity, or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability, and a contingent asset as a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. The standard prescribes how to recognise, measure and disclose provisions, contingent liabilities and contingent assets. | This standard is applicable to all entities that prepare financial statements under Ind AS and have provisions, contingent liabilities or contingent assets. A provision is a liability of uncertain timing or amount. A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or the amount of the obligation cannot be measured with sufficient reliability. A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. This standard requires an entity to recognise a provision when it has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. An entity should measure a provision at the best estimate of the expenditure required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. An entity should not recognise a contingent liability but should disclose its existence unless the possibility of an outflow of resources embodying economic benefits is remote. An entity should not recognise a contingent asset but should disclose its existence where an inflow of economic benefits is probable |
| 38 | Intangible Assets | This standard defines an intangible asset as an identifiable non-monetary asset without physical substance, such as patents, trademarks, goodwill, customer lists, etc., and prescribes how to recognise, measure, amortise and disclose such assets. | This standard is applicable to all entities that prepare financial statements under Ind AS and have intangible assets (identifiable non-monetary assets without physical substance). An intangible asset is identifiable when it is separable (capable of being separated or divided from the entity and sold, transferred, licensed, rented or exchanged) or arises from contractual or other legal rights. This standard requires an entity to recognise an intangible asset if it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset can be measured reliably. An entity should measure an intangible asset initially at cost, which includes its purchase price and any costs directly attributable to preparing the asset for its intended use. After initial recognition, an entity should choose either the cost model (carrying amount is cost less any accumulated amortisation and any accumulated impairment losses) or the revaluation model (carrying amount is fair value at the date of revaluation less any subsequent accumulated amortisation and any subsequent accumulated impairment losses) as its accounting policy for each class of intangible assets and apply it consistently. An entity should amortise an intangible asset over its useful life (the period over which the asset is expected to be available for use by an entity) unless that life is indefinite. An entity should assess at each reporting date whether there is any indication that an intangible asset may be impaired and, if any such indication exists, estimate the recoverable amount of the asset. |
| 40 | Investment Property | This standard defines investment property as property (land or building or part of a building or both) held by the owner or by the lessee under a finance lease to earn rentals or for capital appreciation or both, rather than for use in the production or supply of goods or services or for administrative purposes or sale in the ordinary course of business. The standard prescribes how to account for investment property using either the cost model (carried at cost less accumulated depreciation and impairment. | This standard is applicable to all entities that prepare financial statements under Ind AS and have investment property (property that is held by the owner or by the lessee under a finance lease to earn rentals or for capital appreciation or both, rather than for use in the production or supply of goods or services or for administrative purposes; or sale in the ordinary course of business). This standard requires an entity to recognise an investment property as an asset when it is probable that the future economic benefits that are associated with the investment property will flow to the entity and the cost of the investment property can be measured reliably. An entity should measure an investment property initially at its cost, which includes its purchase price and any directly attributable expenditure. After initial recognition, an entity should choose either the cost model (carrying amount is cost less any accumulated depreciation and any accumulated impairment losses) or the fair value model (carrying amount is fair value at the end of each reporting period) as its accounting policy for all of its investment property and apply it consistently. An entity should disclose information that enables users of its financial statements to evaluate the nature and extent of its investment property and the related risks. |
| 41 | Agriculture | This standard applies to biological assets (living animals or plants) and agricultural produce (the harvested product of biological assets) related to agricultural activity (the management of the biological transformation of biological assets for sale, into agricultural produce, or into additional biological assets), and prescribes how to recognise, measure and disclose such assets and produce at fair value less costs to sell. | This standard is applicable to all entities that prepare financial statements under Ind AS and have agricultural activity (the management by an entity of the biological transformation and harvest of biological assets for sale or for conversion into agricultural produce or into additional biological assets). Biological assets are living animals or plants. Agricultural produce is the harvested product of the entity’s biological assets. This standard requires an entity to measure its biological assets and agricultural produce at fair value less costs to sell, except for cases where fair value cannot be measured reliably. An entity should recognise a gain or loss arising on initial recognition of biological assets or agricultural produce or from a change in fair value less costs to sell of biological assets or agricultural produce in profit or loss for the period in which it arises |
| 101 | First-time Adoption of Indian Accounting Standards | This standard applies to an entity that adopts Ind AS for the first time in its financial statements, and prescribes how to prepare and present its opening Ind AS balance sheet, how to account for the transition from previous GAAP to Ind AS, and what disclosures to make about the transition process. | This standard is applicable to all entities that prepare financial statements under Ind AS for the first time. This standard provides guidance on how an entity should transition from its previous GAAP (generally accepted accounting principles) to Ind AS and how it should prepare and present its first Ind AS financial statements. This standard requires an entity to apply Ind AS retrospectively to all periods presented in its first Ind AS financial statements, except for certain optional exemptions and mandatory exceptions specified in the standard. An entity should also explain how the transition from previous GAAP to Ind AS affected its reported financial position, financial performance and cash flows |
| 102 | Share-based Payment | This standard applies to transactions in which an entity receives goods or services from another party (including employees) in exchange for equity instruments of the entity or amounts that are based on the price of the entity’s equity instruments, such as share options or share appreciation rights. The standard prescribes how to recognise, measure and disclose such transactions. | This standard is applicable to all entities that prepare financial statements under Ind AS and have share-based payment transactions (transactions in which the entity receives goods or services as consideration for equity instruments of the entity or by incurring liabilities for amounts based on the price of the entity’s shares or other equity instruments of the entity). This standard requires an entity to recognise the goods or services received or acquired in a share-based payment transaction when it obtains the goods or as the services are received. The entity should also recognise an increase in equity if the goods or services were received in an equity-settled share-based payment transaction (a share-based payment transaction in which the entity receives goods or services as consideration for equity instruments of the entity) or a liability if the goods or services were acquired in a cash-settled share-based payment transaction (a share-based payment transaction in which the entity acquires goods or services by incurring liabilities to the supplier of those goods or services for amounts that are based on the price of the entity’s shares or other equity instruments of the entity). The entity should measure the goods or services received, and the corresponding increase in equity or liability, at the fair value of the goods or services received, unless that fair value cannot be estimated reliably. If the fair value of the goods or services received cannot be estimated reliably, the entity should measure their value, and the corresponding increase in equity or liability, indirectly, by reference to the fair value of the equity instruments granted |
| 103 | Business Combinations | This standard applies to transactions or other events in which an acquirer obtains control of one or more businesses (an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return), such as mergers, acquisitions or consolidations. The standard prescribes how to identify the acquirer and the acquisition date, how to measure the consideration transferred and the assets acquired and liabilities assumed, how to account for goodwill or gain from a bargain purchase, and what disclosures to make about business combinations. | This standard is applicable to all entities that prepare financial statements under Ind AS and have business combinations (transactions or other events in which an acquirer obtains control of one or more businesses). A business is an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs or other economic benefits directly to investors or other owners, members or participants. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. This standard requires an entity to account for each business combination by applying the acquisition method (a method of accounting that involves identifying the acquirer; determining the acquisition date; recognising and measuring the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree; recognising and measuring goodwill or a gain from a bargain purchase; and disclosing information that enables users of the financial statements to evaluate the nature and financial effects of the business combination). The standard also provides guidance on how to measure goodwill or a gain from a bargain purchase, how to account for contingent consideration, how to account for changes in ownership interests after control is obtained, how to account for business combinations achieved in stages, how to account for business combinations involving entities under common control, and how to disclose information about business combinations |
| 104 | Insurance Contracts | This standard applies to insurance contracts (contracts under which one party accepts significant insurance risk from another party by agreeing to compensate the policyholder if a specified uncertain future event adversely affects the policyholder) issued by any entity, and also applies to reinsurance contracts held by any entity. The standard prescribes how to recognise, measure and disclose such contracts. | This standard is applicable to all entities that prepare financial statements under Ind AS and have insurance contracts (contracts under which one party accepts significant insurance risk from another party by agreeing to compensate the policyholder if a specified uncertain future event adversely affects the policyholder). This standard requires an entity to identify insurance contracts and distinguish them from other contracts such as investment contracts (contracts that do not transfer significant insurance risk) or service contracts (contracts that do not transfer any insurance risk). An entity should apply other applicable Ind AS to those contracts. An entity should also unbundle (account separately for) any deposit component (an amount that is not at risk) from an insurance contract if both of the following conditions are met: the entity can measure the deposit component separately; and the entity’s accounting policies do not otherwise require it to recognise all obligations and rights arising from the deposit component. An entity should measure its insurance liabilities using principles that are consistent with Ind AS 37 (Provisions, Contingent Liabilities and Contingent Assets) and disclose information that enables users of its financial statements to evaluate the amount, timing and uncertainty of future cash flows from insurance contracts. |
| 105 | Non-current Assets Held for Sale and Discontinued Operations | This standard applies to non-current assets (or disposal groups comprising assets and liabilities) that are expected to be recovered primarily through sale rather than through continuing use, and also applies to a component of an entity that either has been disposed of or is classified as held for sale and represents a separate major line of business or geographical area of operations, is part of a single coordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The standard prescribes how to classify, measure and present such assets (or disposal groups) and discontinued operations. | This standard is applicable to all entities that prepare financial statements under Ind AS and have non-current assets (assets that are not classified as current assets) held for sale or discontinued operations (a component of an entity that either has been disposed of or is classified as held for sale and represents a separate major line of business or geographical area of operations; is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or is a subsidiary acquired exclusively with a view to resale). This standard requires an entity to classify a non-current asset or disposal group (a group of assets to be disposed of, by sale or otherwise, together as a group in a single transaction, and liabilities directly associated with those assets that will be transferred in the transaction) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. An entity should measure a non-current asset or disposal group classified as held for sale at the lower of its carrying amount and fair value less costs to sell. An entity should not depreciate or amortise a non-current asset while it is classified as held for sale or while it is part of a disposal group classified as held for sale. An entity should present separately on the face of the balance sheet non-current assets classified as held for sale and liabilities directly associated with non-current assets classified as held for sale. An entity should also present separately in profit or loss income and expenses from discontinued operations. |
| 106 | Exploration for and Evaluation of Mineral Resources | This standard applies to exploration and evaluation expenditures incurred by an entity in connection with the exploration for and evaluation of mineral resources (minerals, oil, natural gas and similar non-regenerative resources), such as obtaining exploration rights, conducting geological studies, drilling exploratory wells etc. The standard prescribes how to recognise, measure and disclose such expenditures. | This standard is applicable to all entities that prepare financial statements under Ind AS and have exploration for and evaluation of mineral resources (the search for mineral resources, including minerals, oil, natural gas and similar non-regenerative resources after the entity has obtained legal rights to explore in a specific area, as well as the determination of the technical feasibility and commercial viability of extracting the mineral resource). This standard specifies the financial reporting for the exploration for and evaluation of mineral resources. It permits an entity to develop an accounting policy for exploration and evaluation assets without specifically considering the requirements of paragraphs 11–12 of Ind AS 8 (Accounting Policies, Changes in Accounting Estimates and Errors). Thus, an entity adopting Ind AS 106 may continue to use the accounting policies applied immediately before adopting the Ind AS. The standard also modifies the recognition of impairment from Ind AS 36 (Impairment of Assets) by requiring an impairment test for exploration and evaluation assets when facts and circumstances suggest that the carrying amount of the assets may exceed their recoverable amount. |
| 107 | Financial Instruments: Disclosures | This standard applies to all entities that report under Ind AS and have financial instruments (contracts that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity), and prescribes what information to disclose about the significance of financial instruments for the entity’s financial position and performance, the nature and extent of risks arising from financial instruments, and how the entity manages those risks. | Financial Instruments: Disclosures. This standard is applicable to all entities that prepare financial statements under Ind AS and have financial instruments (contracts that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity). This standard requires an entity to disclose information that enables users of its financial statements to evaluate the significance of financial instruments for its financial position and performance; and the nature and extent of risks arising from financial instruments to which the entity is exposed during the period and at the end of the reporting period, and how the entity manages those risks. The standard also specifies minimum disclosures about credit risk, liquidity risk, market risk, fair value measurement, hedge accounting, offsetting financial assets and financial liabilities, transfers of financial assets, collateral pledged or received, defaults or breaches on loans payable, etc |
| 108 | Operating Segments | This standard applies to entities whose debt or equity instruments are traded in a public market or that file financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market, and prescribes how to identify, measure and disclose information about an entity’s operating segments (components of an entity that engage in business activities from which they may earn revenues and incur expenses, whose operating results are regularly reviewed by the entity’s chief operating decision maker, and for which discrete financial information is available). | This standard is applicable to all entities that prepare financial statements under Ind AS and have reportable segments (operating segments or aggregations of operating segments that meet specified criteria). An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses; whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance; and for which discrete financial information is available. This standard requires an entity to disclose information that enables users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates. The standard also specifies how an entity should report information about its operating segments in annual financial statements and interim financial reports |
| 109 | Financial Instruments | This standard applies to all types of financial instruments except those that are covered by other Ind AS, such as Ind AS 104 (Insurance Contracts), Ind AS 110 (Consolidated Financial Statements), Ind AS 111 (Joint Arrangements), etc., and prescribes how to classify, recognise, measure, derecognise and hedge financial assets and financial liabilities, as well as how to present and disclose information about them. | This standard is applicable to all entities that prepare financial statements under Ind AS and have financial instruments (contracts that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity). This standard establishes principles for the recognition, measurement, presentation and disclosure of financial instruments. The standard also addresses the classification and measurement of financial assets and financial liabilities; the impairment of financial assets; and hedge accounting. The standard requires an entity to classify its financial assets into one of the following categories: amortised cost; fair value through other comprehensive income (FVOCI); or fair value through profit or loss (FVTPL). The classification depends on the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. The standard also requires an entity to classify its financial liabilities into one of the following categories: amortised cost; or FVTPL. The classification depends on whether the entity has designated the financial liability as at FVTPL or whether it is a derivative that is not part of a hedging relationship. The standard requires an entity to measure its financial assets and financial liabilities at fair value on initial recognition, except for trade receivables that do not have a significant financing component, which are measured at their transaction price. Subsequent measurement depends on the classification of the financial assets and financial liabilities. The standard requires an entity to recognise in profit or loss gains or losses arising from changes in the fair value of financial assets and financial liabilities measured at FVTPL, except for gains or losses arising from changes in own credit risk for financial liabilities designated as at FVTPL, which are recognised in other comprehensive income. The standard also requires an entity to recognise in other comprehensive income gains or losses arising from changes in the fair value of equity investments designated as at FVOCI and debt instruments measured at FVOCI, except for interest income, impairment losses and foreign exchange gains or losses, which are recognised in profit or loss. The standard requires an entity to apply an expected credit loss model for assessing the impairment of financial assets measured at amortised cost or FVOCI. The model requires an entity to recognise a loss allowance for expected credit losses at each reporting date based on a forward-looking estimate of the credit risk of the financial asset. The standard also allows an entity to apply hedge accounting if certain criteria are met. Hedge accounting is an accounting technique that modifies the normal basis for recognising gains and losses on hedged items and hedging instruments so that they are recognised in the same period. The standard provides guidance on how to identify hedging relationships, how to measure hedge effectiveness, how to account for qualifying fair value hedges, cash flow hedges and hedges of net investments in foreign operations, and how to disclose information about hedge accounting |
| 110 | Consolidated Financial Statements | This standard applies to an entity that controls one or more other entities (subsidiaries), and prescribes how to prepare and present consolidated financial statements that include the financial information of the parent and its subsidiaries as a single economic entity, how to account for changes in ownership interests in subsidiaries, and how to apply the exception from consolidation for investment entities. | This standard is applicable to all entities that prepare financial statements under Ind AS and have subsidiaries (entities that are controlled by another entity). This standard establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. The standard also addresses the accounting for changes in ownership interests in subsidiaries; the accounting for loss of control over subsidiaries; and the accounting for potential voting rights and non-controlling interests. The standard requires an entity that controls one or more other entities to present consolidated financial statements that include all assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries as if they were a single economic entity. The standard also requires an entity to eliminate intra-group balances, transactions, income and expenses; and recognise any non-controlling interests in its subsidiaries separately from the parent’s equity. The standard defines control as having all of the following elements: power over an investee (the ability to direct the relevant activities that significantly affect the investee’s returns); exposure or rights to variable returns from its involvement with the investee; and the ability to use its power over the investee to affect the amount of its returns. The standard also provides guidance on how to assess whether an entity has control over an investee; how to account for changes in the level of control over an investee; how to account for non-controlling interests; and how to disclose information about its subsidiaries |
| 111 | Joint Arrangements | This standard applies to an entity that is a party to a joint arrangement (an arrangement of which two or more parties have joint control), which can be either a joint operation (a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement) or a joint venture (a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement). The standard prescribes how to classify, account for and disclose joint arrangements. | This standard is applicable to all entities that prepare financial statements under Ind AS and have joint arrangements (arrangements of which two or more parties have joint control). Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. This standard classifies joint arrangements into two types: joint operations (arrangements in which the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement) and joint ventures (arrangements in which the parties that have joint control of the arrangement have rights to the net assets of the arrangement). This standard requires an entity that is a party to a joint operation to recognise its share of assets, liabilities, revenues and expenses arising from the joint operation in accordance with its contractual rights and obligations. An entity that is a party to a joint venture should account for its interest in the joint venture using the equity method in accordance with Ind AS 28 (Investments in Associates and Joint Ventures). The standard also provides guidance on how to account for acquisitions and disposals of interests in joint operations and joint ventures; how to account for transactions between an entity and a joint operation or a joint venture; and how to disclose information about its interests in joint arrangements |
| 112 | Disclosure of Interests in Other Entities | This standard applies to an entity that has an interest in another entity, such as a subsidiary, a joint arrangement, an associate or an unconsolidated structured entity (an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity), and prescribes what information to disclose about the nature, extent and financial effects of its interests in other entities. | This standard is applicable to all entities that prepare financial statements under Ind AS and have interests in other entities (investments in subsidiaries, joint arrangements, associates and unconsolidated structured entities). This standard requires an entity to disclose information that enables users of its financial statements to evaluate: the nature of, and risks associated with, its interests in other entities; and the effects of those interests on its financial position, financial performance and cash flows. The standard also specifies minimum disclosures about significant judgements and assumptions made in determining whether it has control, joint control or significant influence over another entity; the nature, extent and financial effects of its interests in subsidiaries, joint arrangements, associates and unconsolidated structured entities; and the consequences of changes in its ownership interest in another entity |
| 113 | Fair Value Measurement | This standard applies to an entity that is required or permitted by other Ind AS to measure or disclose the fair value (the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date) of an asset, a liability or an entity’s own equity instrument, or information about assumptions or inputs used in such measurements. The standard prescribes how to determine fair value, what valuation techniques and inputs to use, and what disclosures to make about fair value measurements. | This standard is applicable to all entities that prepare financial statements under Ind AS and have fair value measurements or disclosures (measurements or disclosures based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date). This standard defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The standard also establishes a framework for measuring fair value and sets out the disclosure requirements for fair value measurements. The standard requires an entity to measure fair value using the following three-level hierarchy: Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date; Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; Level 3 inputs are unobservable inputs for the asset or liability. The standard also provides guidance on how to determine the fair value of different types of assets and liabilities, such as non-financial assets, financial instruments, liabilities and own equity instruments, and how to take into account the characteristics of the asset or liability, such as its condition, location and restrictions on its sale or use |
| 114 | Regulatory Deferral Accounts | This standard applies to an entity that has rate-regulated activities (activities for which the price charged to customers for goods or services is subject to oversight or regulation by an authorised body) and recognises amounts that qualify as regulatory deferral account balances (the amount of expense or income that would not be recognised as an asset or a liability in accordance with other Ind AS but qualifies for deferral because it is included, or is expected to be included, by the rate regulator in establishing the rate(s) that can be charged to customers). The standard prescribes how to recognise, measure, present and disclose such balances. | This standard is applicable to all entities that prepare financial statements under Ind AS and have regulatory deferral account balances (amounts of expense or income that would not be recognised as assets or liabilities in accordance with other Ind AS but are included in the financial statements because their rate regulation permits or requires the entity to defer them). This standard allows an entity that is a first-time adopter of Ind AS and has rate-regulated activities (activities subject to rate regulation that establishes the price that the entity can charge customers for the goods or services it provides) to continue applying its previous GAAP accounting policies for the recognition, measurement, impairment and derecognition of regulatory deferral account balances. The standard also requires an entity to present regulatory deferral account balances as separate line items in the statement of financial position and present movements in those balances as separate line items in the statement of profit and loss and other comprehensive income. The standard also requires an entity to disclose information that enables users of its financial statements to assess: the nature of, and risks associated with, the rate regulation that establishes the price(s) that it can charge customers for goods or services; how those rate regulations affect its financial position, financial performance and cash flows; and how regulatory deferral account balances affect its financial position, financial performance and cash flows. |
| 115 | Revenue from Contracts with Customers | This standard applies to all contracts with customers (an agreement between two or more parties that creates enforceable rights and obligations) except those that are within the scope of other Ind AS, such as Ind AS 104 (Insurance Contracts), Ind AS 109 (Financial Instruments), etc., and prescribes a single comprehensive model for accounting for revenue arising from contracts with customers based on a five-step process: identify the contract(s) with a customer; identify the performance obligations (promises to transfer goods or services) in the contract; determine the transaction price (the amount of consideration to which an entity expects. | This standard is applicable to all entities that prepare financial statements under Ind AS and have contracts with customers (agreements between two or more parties that create enforceable rights and obligations). This standard establishes principles for recognising revenue from contracts with customers that apply to all contracts, except for those that are within the scope of other Ind AS, such as leases, insurance contracts, financial instruments, etc. The standard requires an entity to recognise revenue when it transfers control of a good or service to a customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also provides guidance on how to identify the contract with the customer; how to identify the performance obligations (promises to transfer goods or services) in the contract; how to determine the transaction price (the amount of consideration to which an entity expects to be entitled); how to allocate the transaction price to the performance obligations; and how to recognise revenue when or as the entity satisfies each performance obligation. The standard also requires an entity to disclose information that enables users of its financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers |
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Very well explained