Indian Accounting Standards (Ind AS) – “Applicability of Ind AS”

The Ministry of Corporate Affairs (MCA), in 2015, had notified the Companies (Indian Accounting Standards (IND AS)) Rules 2015. This stipulates the manner in which this standard will be applicable to certain classes of the companies and it was introduced in 2 phases by the MCA.

Ind AS is the mixture of International Accounting Standards (IAS) & International Finance Reporting Standards (IFRS). Accounting interpretation is given inform of Appendix to relevant Ind AS.

Phases for the adoption of Ind AS:

1. All the companies can voluntarily switch to the Ind AS from 01st April 2015 other than Banking, NBFCs & Insurance companies. Their Holding, Subsidiary, Associate Enterprise and Joint Venture were also required to follow Ind AS from respective date. Comparative figures for the previous financial year needs to be prepared under Ind AS.

For Listed Companies:

2. From 1st April 2016 it was applicable to the companies other than banking, NBFC’s and Insurance companies:

a. Having net worth is equal to or more than 500 crores; or

b. Whose equity or debt securities were listed or not on the stock exchange.

Comparative figures for FY 15-16 is to be included while preparing financials

3. From 1st April 2017 it was applicable to the companies other than banking, NBFC’s and Insurance companies:

a. Whose equity or debt securities were listed on a recognized stock exchange and Having a net worth of less than 500 crores;

b. Who is unlisted companies and Having a net worth of less than 500 crores but more than 250 crores;

Comparative figures for FY 15-16 is to be included while preparing financials

For NBFCs:

1. From 1st April 2018 it was applicable to the NBFCs:

a. Having net worth is equal to or more than 500 crores; or

b. Whose equity or debt securities were listed or not on the recognized stock exchange.

Comparative figures for FY 15-16 is to be included while preparing financials

2. From 1st April 2019 for NBFCs:

a. Whose equity or debt securities were listed on the recognized stock exchange and Having a net worth of less than 500 crores;

b. Who is unlisted companies and Having a net worth of less than 500 crores but more than 250 crores; Comparative figures for FY 15-16 is to be included while preparing financials For Standalone and Consolidated financials is to be prepared with Ind AS.

Companies having net worth of less than Rs. 250 Crores and companies listed on SME Stock exchange are not required to comply with the Ind AS.

For the purpose of calculating Net Worth: Net worth will be determined based on the stand-alone accounts of the company as on 31st March 2014, or the first audited period ending after that date. Net Worth is the total of Paid-up share Capital and all reserves out of profit & securities premium account, after deducting accumulated losses, deferred expenditure, and miscellaneous expenditure not written off. Only capital Reserve arising out of Promoters Contribution and Government Grants received can be included. Reserves created out of revaluation of assets and written back depreciation cannot be included.

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