Roadmap for implementing Ind AS
The roadmap for implementing Ind AS in a phased manner is given below.
All non-financial companies
For companies other than banks, NBFC and Insurance companies:
1st April 2015 or thereafter: Voluntary Basis for all companies (with comparatives)
1st April 2016: Mandatory Basis
- All listed on Stock Exchange in India or outside having net worth equal to or more than Rs 500 crore
- Unlisted companies having net worth equal to more than Rs 500 crore
- Parent, Subsidiary, Associate and Joint Venture of above
Companies can voluntarily apply Ind AS for accounting periods beginning on or after 1st April 2015. If an entity applies Ind AS voluntarily for any year, it shall be irrevocable, which means it should continue to apply Ind AS for all the subsequent years mandatorily.
1st April 2017 – Mandatory Basis
- All companies which are listed/or in the process of listing inside or outside India on Stock Exchanges, not covered in Phase 1 (other than companies listed on SME Exchanges)
- Unlisted companies having net worth equal to or more than Rs 250 crore up to Rs 500 crore
- Parent, Subsidiary, Associate and Joint Venture of above
Note: Companies listed on SME Exchanges not required to apply IND AS. Once IND AS are applicable, an entity should be required to follow IND AS for all the subsequent financial statements. Companies not covered by the above shall continue to apply existing Accounting standards notified in Companies (Accounting Standards) Rules, 2006.
Scheduled commercial banks (excluding RRB)
As per the Notification dated 22nd March 2019 from Reserve Bank of India, the legislative amendments recommended by the Reserve Bank are under consideration of the Government of India. Accordingly, it has been decided to defer the implementation of Ind AS till further notice.
Non-Banking Financial Companies (NBFCs)
From 1st April 2018 (with Comparatives)
- NBFC (whether listed or unlisted) having net worth of Rs. 500 crores or more
- Holding, Subsidiary, Joint Venture or Associate companies of the above NBFC other than those already covered under the corporate roadmap shall also apply from the said date
From 1st April 2019 (with Comparatives)
- NBFCs whose equity or debt securities are listed or are in the process of listing on any stock exchange in India or outside India and having net worth of less than Rs. 500 crores
- NBFCs that are unlisted and having net worth Rs. 250 crores or more but less than Rs. 500 crores
- Holding, Subsidiary, Associate and Joint Venture companies of the above NBFC other than those already covered under the corporate roadmap shall also apply from the said date
- Applicable for the preparation of both individual and consolidated financial statements
- Adoption of Ind AS is allowed only when required as per roadmap. Voluntary adoption of Ind AS is not allowed
- NBFC having net worth below Rs. 250 crores need not apply Ind AS
From 1st April 2020 onwards with comparatives
- Holding, Subsidiary, Joint venture and Associate companies of the above Insurers/Insurance companies other than those already covered under the corporate roadmap shall also apply from the said date
- Applicable for both consolidated and individual financial statements
- Urban Co-operative Banks (UCB) and Rural Regional Banks (RRB) are not required to apply IND AS
Notification by RBI
Deferment of Indian Accounting Standards (Ind AS) implementation issued on 5th April 2018
Scheduled Commercial Banks (SCBs), excluding Regional Rural Banks (RRBs), were required to implement Indian Accounting Standards (Ind AS) from 1st April 2018 vide Circular dated 11th February 2016. However, necessary legislative amendments – to make the format of financial statements, prescribed in the Third Schedule to Banking Regulation Act 1949, compatible with accounts under Ind AS – are under consideration of the Government. In view of this, as also the level of preparedness of many banks, it has been decided to defer implementation of Ind AS by one year when the necessary legislative changes are expected.
However, pursuant to another Notification by RBI dated 22nd March 2019, the legislative amendments recommended by the Reserve Bank are under consideration of the Government of India. Accordingly, it has been decided to defer the implementation of Ind AS till further notice.
Ind AS 37 – Provisions, contingent liabilities and contingent assets
What is SPPI Test? SPPI test means Solely Payment of Principal and Interest. The SPPI test is performed at the instrument level. So, if the test passes for one, it means the test passes for everyone in respect of that instrument. SPPI test should be passed for an instrument to…
Ind AS for financial instruments replica of IFRS? Are the Ind AS relating to financial instruments an exact replica of its counterpart, viz, IFRS? Ind AS 32 is the converged standard of IAS 32. Ind AS 109 is the converged Ind AS of IFRS 9. Ind AS 107 is the…
Scopes of the three standards for financial instruments Are the scopes of all the three standards viz., Ind AS 32, Ind AS 109 and Ind AS 107 similar? Ind AS 32 is the converged standard of IAS 32. Ind AS 109 is the converged Ind AS of IFRS 9. Ind…
Contract to deal in non-financial item Is a contract to buy or sell a non-financial item, a financial instrument? A contract to deal with a non-financial item is not a financial instrument. However, there are certain contracts to buy or sell a non-financial item that may be required to be…
Contract meant for own use Can a written option that results in the delivery of a non-financial item be treated as a financial instrument, as the non-financial item is meant for own use? If the derivative contract is a purchased call option or a future contract to buy a non-financial…
Difference between forward contract & futures contract What is the difference between a forward contract and a futures contract? A forward contract is a derivative instrument between two parties to buy or to sell an asset at a specified future time at a price agreed upon today. A forward contract…
Difference between futures contract & options contract What is the basic difference between a futures contract and an options contract? Both futures contract and options contract are known as derivative contracts. In a futures contract, there is an underlying, the notional amount and an expiry date. In the case of…
Definition of derivative instruments Are derivative instruments specifically defined in the standards and if so, where? A derivative instrument is a subset of financial instrument with mainly three characteristics, viz, its value changes in response to a change in the underlying variable, it requires no or low initial net investment…
What are Ind AS accounting standards? The Ministry of Corporate Affairs (MCA) on 16th February 2015 notified the Companies (Indian Accounting Standards) Rules, 2015 containing 39 Indian Accounting Standards (Ind ASs). Ind ASs are based on International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB). The…
Ind ASs relating to financial instruments What are the Ind ASs relating to financial instruments? Financial instruments are primarily governed by three standards as per Ind AS, viz, Ind AS 32, Ind AS 109 and Ind AS 107. Ind AS 32 defines financial instruments, financial assets, financial liabilities and equity…
What is the significance of Ind AS 32 Ind AS 32 is the converged Accounting Standard of IAS 32 Ind AS 32 deals with financial instruments from the perspective of an issuer and provides guidance as to how an entity should present a financial instrument either as a financial asset…