Introduction to Accounting Standards

1. Introduction
2. Standards setting process
3. How many accounting standards?
4. Status of accounting standard
5. Need for convergenece towards global standards
6. International Accounting Standard Board (IASB)
7. International Financial Reporting Standards (IFRS) as global standards
8. Becomig IFRS compliant
9. What are carve outs/ins in IND AS?
10. Convergence to IFRS in India
11. What are Indian Accounting Standards (IND AS)?
12. History of IFRS-Converged Indian Accounting Standards (IND AS)
13. List of IND AS
14. Roadmap for implementation of Indian Accounting Standards (IND AS): A Snapshot
    
    

Generally accepted accounting principles (GAAP) refer to a common set of accepted accounting principles, standards, and procedures that business reporting entity must follow when it prepares and presents its financial statements.

GAAP is a combination of authoritative standards (set by policy boards) and the commonly accepted ways of recording and reporting accounting information. At international level, such authoritative standards are known as International Financial Reporting Standards (IFRS) at many places and in India we have authoritative standards named as Accounting Standards (ASs) and Indian Accounting Standard (Ind AS).

 

Accounting Standards (ASs) are written policy documents issued by the Government with the support of other regulatory bodies e.g., Ministry of Corporate Affairs (MCA) issuing Accounting Standards for corporates in consultation with National Financial Reporting Authority (NFRA) covering the following aspects of accounting transaction or events in the financial statements:

• recognition;
• measurement;
• presentation; and
• disclosure.

The ostensible purpose of the standard setting bodies is to promote the dissemination of timely and useful financial information to investors and certain other stakeholders, having an interest in the company's economic performance.

Accounting Standards reduce the accounting alternatives in the preparation of financial statements within the bounds of rationality, thereby, ensuring comparability of financial statements of different enterprises.

1. recognition of events and transactions in the financial statements;
2. measurement of these transactions and events;
3. presentation of these transactions and events in the financial statements in a manner that is meaningful and understandable to the reader; and
4. the disclosures relating to these transactions and events to enable the public at large and the stakeholders and the potential investors in particular, to get an insight into what these financial statements are trying to reflect and thereby facilitating them to take prudent and informed business decisions.

(i) Standardisation of alternative accounting treatments: Accounting Standards reduce or eliminate, to a reasonable extent, any confusing variations in the accounting treatment and presentation of economic events while preparing financial statements.

The standard policies are intended to reflect a consensus on accounting policies to be used in different identified areas, e.g. inventory valuation, capitalisation of costs, depreciation and amortisation, etc.

Since it is not possible to prescribe a single set of policies for any specific accounting area that would be appropriate for all enterprises, it is not enough to comply with the standards and state that they have been followed.

In other words, one must also disclose the accounting policies used in preparation of financial statements. (Refer AS 1, Disclosure of Accounting Policies given in Accounting Pronouncements).

For example, an enterprise should disclose which of the permitted cost formula (FIFO, Weighted Average, etc.) has actually been used for ascertaining inventory costs.

(ii) Requirements for additional disclosures: There are certain areas where information is not statutorily required to be disclosed. However, accounting standards may call for appropriate disclosures of accounting policies followed and other required information in the financial statements which would be helpful for readers to understand the accounting treatment done for various items in those financial statements.

(iii) Comparability of financial statements: In addition to improving credibility of accounting data, standardisation of accounting procedures improves comparability of financial statements, both intra-enterprise and inter-enterprise. Such comparisons are very effective and most widely used tools for assessment of enterprise’s financial health and performance by users of financial statements for taking economic decisions, e.g., whether or not to invest, whether or not to lend and so on.

The intra-enterprise comparison involves comparison of financial statements of same enterprise over a number of years. The intra-enterprise comparison is possible if the enterprise uses same accounting policies every year in drawing up its financial statements.

 

The inter-enterprise comparison involves comparison  of  financial statements of different enterprises for same accounting period. This is possible only when comparable enterprises use similar accounting policies in preparation of respective financial statements (or in case the policies are slightly different, the same are disclosed in the financial statements). The disclosure of accounting policies allows a user to make appropriate adjustments while comparing the financial statements of comparable enterprises.

 

 

Since Accounting Standards are principle based, application of Accounting Standards becomes judgemental in case of complex business transactions. Accounting Standards have to be read in line with the legal requirements, i.e., in case of any conflict, Statute would prevail over Accounting Standards.

 

Another advantage of standardisation is reduction of scope for creative accounting. The creative accounting refers to twisting of accounting policies to produce financial statements favourable to a particular interest group. For example, it is possible to overstate profits and assets by capitalising revenue expenditure or to understate them by writing off a capital expenditure against revenue of current accounting period. Such practices can be curbed only by framing policies for capitalisation, particularly for the borderline cases where it is possible to have divergent views. The accounting standards provide adequate guidance in this regard.

 

The Institute of Chartered Accountants of India (ICAI), being a premier accounting body in the country, took upon itself the leadership role by constituting the Accounting Standards Board (ASB) in 1977. The ICAI has taken significant initiatives for the issuance of Accounting Standards to ensure that the standard-setting process is fully consultative and transparent. The ASB considered the International Accounting Standards (IASs) / International Financial Reporting Standards (IFRSs) while framing Accounting Standards (ASs) in India and tried to integrate them, in the light of the applicable laws, customs, usages and business environment in the country. The composition of ASB includes representatives of industries, associations of industries (namely, ASSOCHAM, CII, FICCI), regulators, academicians, government departments, etc. Although ASB is a body constituted by the Council of the ICAI, it (ASB) is independent in the formulation of accounting standards. NFRA recommend these standards to the MCA. MCA has to spell out the accounting standards applicable for companies in India.

The standard-setting procedure of ASB can be briefly outlined as follows:

• Identification of broad areas by ASB for formulation of AS.
• Constitution of study groups by ASB to consider specific projects and to prepare preliminary drafts of the proposed accounting standards. The draft normally includes objective and scope of the standard, definitions of the terms used in the standard, recognition and measurement principles wherever applicable and presentation and disclosure requirements.
• Consideration of the preliminary draft prepared by the study group of ASB and revision, if any, of the draft on the basis of deliberations.
• Circulation of draft of accounting standard (after revision by ASB) to the Council members of the ICAI and specified outside bodies such as MCA, Securities and Exchange Board of India (SEBI), Comptroller and Auditor General of India (C&AG), Central Board of Direct Taxes (CBDT), Standing Conference of Public Enterprises (SCOPE), etc. for comments.
• Meeting with the representatives of the specified outside bodies to ascertain their views on the draft of the proposed accounting standard.
• Finalisation of the exposure draft of the proposed accounting standard and its issuance inviting public comments.
• Consideration of comments received on the exposure draft and finalisation of the draft accounting standard by the ASB for submission to the Council of the ICAI for its consideration and approval for issuance.
• Consideration of the final draft of the proposed standard by the Council of the ICAI and if found necessary, modification of the draft in consultation with the ASB is done.
• The accounting standard on the relevant subject (for non-corporate entities) is then issued by the ICAI. For corporate entities the accounting standards are issued by the Ministry of Corporate Affairs in consultation with the NFRA.

 

Earlier, ASB used to issue Accounting Standard Interpretations (ASIs) which address questions that arise in course of application of standard. These were, therefore, issued after issuance of the relevant standard. Authority of the ASIs was same as that of the AS to which it relates.

However, after notification of Accounting Standards by the Central Government for

the companies, where the consensus portion of ASI was merged as ‘Explanation’ to the relevant paragraph of the Accounting Standard, the Council of ICAI also decided to merge the consensus portion of ASI as ‘Explanation’ to the relevant paragraph of the AS issued by them. This initiative was taken by the Council of the ICAI to harmonise both the set of standards, i.e., ASs issued by the ICAI for non- corporates and ASs notified by the MCA for corporates.

It may be noted that as per Section 133 of the Companies Act, 2013, the Central Government may prescribe the standards of accounting or any addendum thereto, as recommended by the ICAI, constituted under section 3 of the Chartered Accountants Act, 1949, in consultation with and after examination of the recommendations made by NFRA.

The Institute of Chartered Accountants of India has, so far, issued 29 Accounting Standards. However, AS 6 on ‘Depreciation Accounting’ has been withdrawn on revision of AS 10 ‘Property, Plant and Equipment’ and AS 8 on ‘Accounting for Research and Development’ has been withdrawn consequent to the issuance of AS 26 on ‘Intangible Assets’.

Thus effectively, there are 27 Accounting Standards at present. The ‘Accounting Standards’ issued by the Accounting Standards Board establish standards which have to be complied by the business entities so that the financial statements are prepared in accordance with GAAP.

In recent times there are various improvements/developments in the global accounting standards which have taken place. In India, Ind AS have become mandatory for certain class of companies as per the MCA roadmap. AS being the guidelines to prepare financial statements, have to keep pace with these changes in global accounting scenarios. Number of fundamental changes have been made in these AS so as to be globally aligned as far as possible.

MCA vide notification date 30th March 2016 announced Companies (Accounting Standards) Amendment Rules, 2016. Various ASs i.e. AS 2, AS 4, AS 10, AS 13, AS 14, AS 21, AS 29 were revised vide this notification to make them in line with corresponding Ind AS to the extent possible.

 

AS no.	AS Title	Date of applicability
1	Disclosure of Accounting Policies	01/04/1993
2	Valuation of Inventories (Revised)	01/04/1999
3	Cash Flow Statement	01/04/2001
4	Contingencies and Events Occuring after the Balance Sheet Date (Revised)	01/04/1998
5	Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies	01/04/1996
7	Construction Contracts	01/04/2002
9	Revenue Recognition	01/04/1993
10	Property, Plant and Equipment (Revised)	01/04/2016
11	The Effects of Changes in Foreign Exchange Rates (Revised)	01/04/2004
12	Accounting for Government Grants	01/04/1994
13	Accounting for Investments (Revised)	01/04/1995
14	Accounting for Amalgamations (Revised)	01/04/1995
15	Employee Benefits	01/04/2006
16	Borrowing Costs	01/04/2000
17	Segment Reporting	01/04/2001
18	Related Party Disclosures	01/04/2001
19	Leases	01/04/2001
20	Earnings Per Share	01/04/2001
21	Consolidated Financial Statements (Revised)	01/04/2001
22	Accounting fro Taxes on Income	01/04/2006
23	Accounting for Investments in Associates in Consolidated Financial Statements	01/04/2002
24	Discontinuing Operations	01/04/2004
25	Interim Financial Reporting	01/04/2002
26	Intangible Assets	01/04/2003
27	Financial Reporting of Interests in Joint Ventures	01/04/2002
28	Impairment of Assets	01/04/2008
29	Provisions, Contigent Liabilities and Contingent Assets (Revised)	01/04/2004

NOTE: AS 1; AS 2 (Revised); AS 3; AS 10 (Revised); AS 11(Revised); AS 12; AS 13 (Revised); AS 16 are covered in the syllabus of this paper at Intermediate Level.

It has already been mentioned that the ASs are developed by the ASB of the ICAI. The Institute not being a legislative body can enforce compliance with its standards only by its members. Also, the standards cannot override laws and local regulations. The ASs are nevertheless made mandatory from the dates specified in respective standards and are generally applicable to all enterprises, subject to certain exceptions. The implication of mandatory status of an AS depends on whether the statute governing the enterprise concerned requires compliance with the ASs. The Companies Act had earlier notified 28 ASs and mandated the corporate entities to comply with the provisions stated therein. However, in 2016 the MCA withdrew AS 6. Hence there are now only 27 notified ASs as per the Companies (Accounting Standards) Rules, 2006 (as amended in 2016).

The last decade has witnessed a sea change in the global economic scenario. The emergence of trans-national corporations in search of money, not only for fuelling growth, but to sustain on-going activities has necessitated raising of capital from all parts of the world, cutting across frontiers.

 

Each country has its own set of rules and regulations for accounting and financial reporting. Therefore, when an enterprise decides to raise capital from the markets other than the country in which it is located, the rules and regulations of that other country will apply and this in turn will require that the enterprise is in a position to understand the differences between the rules governing financial reporting in the foreign country as compared to its own country of origin. Therefore, translation and reinstatements are of utmost importance in a world that is rapidly globalising in all ways. Further, the ASs and principles need to be robust so that the larger society develops degree of confidence in the financial statements, which are put forward by organisations.

International analysts and investors would like to compare financial statements based on similar ASs, and this has led to the growing need for an internationally accepted set of ASs for cross-border filings. The harmonization of financial reporting around the world will help to raise confidence of investors, generally, in the information they are using to make their decisions and assess their risks.

Also, a strong need was felt by legislation to bring about uniformity, rationalisation, comparability, transparency and adaptability in financial statements. Having a multiplicity of types of ASs around the world is against the public interest. If accounting for the same events and information produces different reported numbers, depending on the system of standards that are being used, then it is self-evident that accounting will be increasingly discredited in the eyes of those using the numbers. It creates confusion, encourages error and may facilitate fraud. The cure for these ills is to have a single set of global standards, of the highest quality, set in the interest of public. Global Standards facilitate cross border flow of money, global listing in different stock markets and comparability of financial statements.

The convergence of financial reporting and ASs is a valuable process that contributes to the free flow of global investment and achieves substantial benefits for all capital market stakeholders. It improves the ability of investors to compare investments on a global basis and, thus, lower their risk of errors of judgment. It facilitates accounting and reporting for companies with global operations and eliminates some costly requirements like reinstatement of financial statements. It has the potential to create a new standard of accountability and greater transparency provides value to all market participants including regulators. It reduces operational challenges for accounting firms and focuses their values and expertise around an increasingly unified set of standards. It creates an unprecedented opportunity for standard setters and other stakeholders to improve the reporting model. For the companies with joint listings in both domestic and foreign country, the convergence is very much significant.

With a view of achieving the objective of setting global standards, the London based group namely the International Accounting Standards Committee (IASC), responsible for developing International Accounting Standards (IAS), was established in June, 1973. It is presently known as International Accounting Standards Board (IASB), The IASC comprises the professional accountancy bodies of over 75 countries (including the ICAI). Primarily, the IASC was established, in the public interest, to formulate and publish, IASs to be followed in the preparation and presentation of financial statements. IASs were issued to promote acceptance and observance of IASs worldwide. The members of IASC undertook a responsibility to support the standards developed by IASC and to propagate those standards in their respective countries.

Between 1973 and 2001, the IASC released IASs. Between 1997 and 1999, the IASC restructured their organisation, which resulted in formation of IASB. These changes came into effect on 1st April, 2001. Subsequently, IASB issued statements about current and future standards. IASB publishes its Standards in a series of pronouncements called International Financial Reporting Standards (IFRS). However, IASB has not rejected the standards issued by the IASC. Those pronouncements continue to be designated as “International Accounting Standards” (IAS).

The standards issued by IASC till 31.03.2001 are known as IASs and the standards issued by IASB since 01.04.2001 are known as IFRSs.

 

 

The term International Financial Reporting Standards (IFRS) comprises IFRS issued by IASB; IAS issued by IASC; Interpretations issued by the Standard Interpretations Committee (SIC) and the IFRS Interpretations Committee of the IASB.

IFRSs are considered as a "principles-based" set of standards. In fact, they establish broad rules rather than dictating specific treatments. Every major nation is moving toward adopting them to some extent. Large number of authorities permits public companies to use IFRS for stock-exchange listing purposes, and in addition, banks, insurance companies and stock exchanges may use them for their statutorily required reports. So, over the next few years, number of companies will adopt the international standards. This requirement will affect thousands of enterprises, including their subsidiaries, equity investors and joint venture partners. The increased use of IFRS is not limited to public-companies listing requirements or statutory reporting. Many lenders and regulatory and government bodies are looking to IFRS to fulfil local financial reporting obligations related to financing or licensing.

 

Any country can become IFRS compliant either by adoption process or by convergence process. Adoption would mean that the country sets a specific timetable when specific entities would be required to use IFRS as issued by the IASB. Convergence means that the country will develop high quality, compatible accounting standards and there would be alignment of the standards of different standard setters with a certain rate of compromise, by adopting the requirements of the standards either fully or partially. Ind AS are almost similar to IFRS but with few carve outs so as to make them suitable for Indian Environment.

Convergence with IFRS will result in following benefits:

• Improves investor confidence across the world with transparency and comparability
• Improves inter-unit/ inter-firm/inter-industry comparison
• Group consolidation will be easy with same standard by all companies in group irrespective of their global location.
• Acceptability of financial statements by stock exchanges across the globe, which will facilitate listing of Indian companies to international stock exchanges.

The Government of India in consultation with the ICAI decided to converge and not to adopt IFRS issued by the IASB. The decision of convergence rather than adoption was taken after the detailed analysis of IFRS requirements and extensive discussion with various stakeholders.

Accordingly, while formulating Ind AS, efforts have been made to keep these Standards, as far as possible, in line with the corresponding IAS/IFRS and departures have been made where considered absolutely essential. These changes have been made considering various factors, such as

• Various terminology related changes have been made to make it consistent with the terminology used in law, e.g., ‘statement of profit and loss’ in place of ‘statement of comprehensive income’ and ‘balance sheet’ in place of ‘statement of financial position’.
• Removal of options in accounting principles and practices in Ind AS vis -a-vis IFRS, have been made to maintain consistency and comparability of the financial statements to be prepared by following Ind AS. However, these changes will not result into carve outs.
• Certain changes have been made considering the economic environment of the country, which is different as compared to the economic environment presumed to be in existence by IFRS. These differences are due to differences in economic conditions prevailing in India. These differences which are in deviation to the accounting principles and practices stated in IFRS, are commonly known as ‘Carve-outs’.

Additional guidance given in Ind AS over and above what is given in IFRS, is termed as ‘Carve in’.

 

In the scenario of globalisation, India cannot isolate itself from the accounting developments taking place worldwide. In India, so far as the ICAI, NFRA and various regulators such as SEBI and Reserve Bank of India (RBI) are concerned, the aim is to comply with the IFRS to the extent possible with the objective to formulate sound financial reporting standards for the purpose of preparing globally accepted financial statements. The ICAI, being a member of the International Federation of Accountants (IFAC), considered the IFRS and tried to integrate them, to the extent possible, in the light of the laws, customs, practices and business environment prevailing in India.

Due to the recent stream of overseas acquisitions by Indian companies, there is need for adoption of high quality standards to convince foreign enterprises about the financial standing as also the disclosure and governance standards of Indian acquirers.

In India, the ICAI has worked towards convergence of global accounting standards by considering the application of IFRS in Indian corporate environment. Recognising the growing need of full convergence of Ind AS with IFRS, ICAI constituted a Task Force to examine various issues involved.

Full convergence involves adoption of IFRS in the same form as that issued by the IASB.

 

For convergence of Ind AS with IFRS, the ASB in consultation with the MCA, decided that there will be two separate sets of accounting standards viz. (i) Ind AS converged with the IFRS – standards which are being converged by eliminating the differences of the Ind AS vis-à-vis IFRS and (ii) Existing notified AS.

 

Ind AS are IFRS converged standards issued by the Central Government of India under the supervision and control of ASB of ICAI and in consultation with NFRA.

NFRA recommends these standards to the MCA. MCA has to spell out the accounting standards applicable for companies in India.

Ind AS are named and numbered in the same way as the corresponding IAS. However, for Ind AS corresponding to IFRS, one need to add 100 to the IFRS number e g. for IFRS 1 corresponding Ind AS number is 101.

The ICAI being the accounting standards-setting body in India, way back in 2006, initiated the process of moving towards the IFRS issued by the IASB with a view to enhance acceptability and transparency of the financial information communicated by the Indian corporates through their financial statements. This move towards IFRS was subsequently accepted by the Government of India.

Consistent, comparable and understandable financial reporting is essential to develop a robust economy. With a view to achieve international benchmarks of financial reporting, the ICAI, as a proactive role in accounting, set out to introduce Ind AS converged with the IFRS. This endeavour of the ICAI is supported by the Government of India.

Initially Ind AS were expected to be implemented from the year 2011. However, keeping in view the fact that certain issues including tax issues were still to be addressed, the MCA decided to postpone the date of implementation of Ind AS in India.

In July 2014, the Finance Minister of India at that time, Late Shri Arun Jaitley Ji, in his Budget Speech, announced an urgency to converge the existing accounting standards with the IFRS through adoption of the Ind AS by the Indian companies.

Pursuant to the above announcement, various steps have been taken to facilitate the implementation of IFRS-converged Ind AS. Moving in this direction, the MCA issued the Companies (Indian Accounting Standards) Rules, 2015 vide Notification dated February 16, 2015 covering the revised roadmap of implementation of Ind AS for companies other than Banking companies, Insurance Companies and NBFCs and Ind AS.

As per the Notification, Ind AS converged with IFRS were required to be implemented on voluntary basis from 1st April, 2015 and mandatorily from 1st April, 2016.

Separate roadmaps were prescribed for implementation of Ind AS to Banking, Insurance companies and NBFCs.

 

The following is the list of Ind AS vis-a-vis IFRS and AS:

Ind AS	IAS / IFRS	Title of Ind AS / IFRS	AS / GN	AS / GN Title
101	IFRS 1	First Time Adoption of Indian Accounting Standards	-	-
102	IFRS 2	Share Based Payment	GN 18	Guidance Note on Accounting for Employee Share-based Payments
103	IFRS 3	Business Combination	AS 14	Accounting for Amalgamations
104	IFRS 4	Insurance Contracts	-	-
105	IFRS 5	Non-current Assets Held for Sale and Discontinued Operations	AS 24	Discontinuing Operations
106	IFRS 6	Exploration for and Evaluation for Mineral Resources	GN 15	Guidance Note on Accounting for Oil and Gas Producing Activities
107	IFRS 7	Financial Instruments Disclosures	-	-
108	IFRS 8	Operating Segments	AS 17	Segment Reporting
109	IFRS 9	Financial Instruments	-	-
110	IFRS 10	Consolidated Financial Statements	AS 21	Consolidated Financial Statements
111	IFRS 11	Joint Arrangements	AS 27	Financial Reporting of Interests in Joint Ventures
112	IFRS 12	Disclosure of Interest in Other Entities	-	-
113	IFRS 13	Fair Value Measuement	-	-
114	IFRS 14	Regulatory Deferral Accounts	GN	Accounting for Rate Regulated Activities
115	IFRS 15	Revenue from contracts with customers	AS 7 AS 9	Construction Contract Revenue Recognition
116	IFRS 16	Leases	AS 19	Leases
1	IAS 1	Presentation of Fianncial Statements	AS 1	Disclosure of Accounting Policies
2	IAS 2	Iventories	AS 2	Valuation of Inventorires
7	IAS 7	Statement of Cash Flows	AS 3	Cash Flow Statements
8	IAS 8	Accounting Policies, Changes in Accounting Estimates and Errors	AS 5	Net Profit or Loss for the period, Prior period Items and Changes in Accounting Policies
10	IAS 10	Events after the Reporting Period	AS 4	Contingencies and Events Occuring After the Balance Sheet date
12	IAS 12	Income Taxes	AS 22	Accounting for Taxes on Income
16	IAS 16	Property, Plant and Equipment	AS 10	Property, Plant and Equipment
19	IAS 19	Employee Benefits	AS 15	Employee Benefits
20	IAS 20	Accounitng for Government Grants and Disclosure of Government Assistance	AS 12	Accounting for Government Grants
21	IAS 21	The Effects of Changes in Foreign Exchange Rates	AS 11	The Effects of Changes in Foreign Exchange Rates
23	IAS 23	Borrowing Costs	AS 16	Borrowing Costs
24	IAS 24	Related Party Disclosures	AS 18	Related Party Disclosures
27	IAS 27	Sepearte Financial Statements	-	-
28	IAS 28	Investment in Associates and Joint Ventures	AS 23	Accounting for Investment in Associates in Consolidated Financial Statements
29	IAS 29	Financial Reporting in Hyperinflationary Economies	-	-
32	IAS 32	Finacial Instruments : Presntation	-	-
33	IAS 33	Earnigs per Share	AS 20	Earning per Share
34	IAS 34	Interim Financial Reporting	AS 25	Interim Financial Reporting
36	IAS 36	Impairment of Assets	AS 28	Impairment of Assets
37	IAS 37	Provisions, Contingent Liabilities and Contingent Assets	AS 29	Provisions, Contingent Liabilities and Contingent Assets
38	IAS 38	Intangible Assets	AS 26	Intangible Assets
40	IAS 40	Investment Property	AS 13	Accounting for investments
41	IAS 41	Agriculture	-	-

Phase I: 1st April 2015 or thereafter (with Comparatives): Voluntary Basis for any company (other than Banks, NBFCs and Insurance companies) and its holding, subsidiary, Joint venture (JV) or Associate Company.

1. Companies listed/in process of listing on Stock Exchanges in India or Outside India having net worth of INR 500 crore or more;
2. Unlisted Companies having net worth of INR 500 crore or more;
3. Parent, Subsidiary, Associate and JV of above.

1. All companies which are listed/or in process of listing on Stock Exchanges in India or outside India not covered in Phase I (other than companies listed on SME Exchanges);
2. Unlisted companies having net worth of INR 250 crore or more but less than INR 500 crore;
3. Parent, Subsidiary, Associate and JV of above.

• Companies listed on SME exchange are not required to apply Ind AS. Such companies shall continue to apply existing ASs unless they choose otherwise.
• Once Ind AS are applicable, an entity shall be required to follow the Ind AS for all the subsequent financial statements i.e. there is no looking back once the Ind AS are adopted by companies.
• Companies not covered by the above roadmap shall continue to apply Accounting Standards notified in Companies (Accounting Standards) Rules, 2006.

• NBFCs (whether listed or unlisted) having net worth INR 500 crores or more
• Holding, Subsidiary, JV and Associate companies of above NBFC other than those already covered under corporate roadmap shall also apply from said date

• NBFCs whose equity and/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 less than INR 500 crores
• NBFCs that are unlisted having net worth INR 250 crores or more but less than INR 500 crores
• Holding, Subsidiary, JV and Associate companies of above companies other than those already covered under corporate roadmap shall also apply Ind AS from the said date.

• Scheduled Commercial Banks (SCBs) excluding Regional Rural Banks (RRBs) were initially required to implement Ind AS from 1 April 2018. However, RBI (Reserve Bank of India) vide a press release dated 5 April 2018, deferred the implementation of Ind AS by one year i.e. to be effective from 1 April 2019 instead of 1 April 2018.
• Further, the RBI through a notification dated 22 March 2019, deferred the Ind AS implementation till further notice. This was because the amendments recommended by the RBI are still under consideration of the Government of India, therefore, RBI took a decision to defer the applicability of Ind AS till further notice.
• Urban Cooperative banks (UCBs) and Regional Rural banks (RRBs) are not required to apply Ind AS.

• MCA had outlined the road map for implementation of Ind AS by insurers/insurance companies from 1 April 2018.
• IRDAI (Insurance Regulatory and Development Authority of India) deferred the implementation of Ind AS in the insurance sector in India for a period of two years whereby the effective date was deferred to 1 April 2020. However, insurance companies were required to submit proforma Ind AS financial statements to IRDAI on a quarterly basis effective 31 December 2016 (vide circular dated 28 June 2017).
• Further, IRDAI in its meeting held on 20 December 2019 decided to implement Ind AS 109, Financial Instruments and Ind AS 117 simultaneously, along with other applicable Ind AS. In India, Ind AS 117 (converged with IFRS 17) is still at an exposure draft stage and will be updated based on the amendments made to IFRS 17. Once Ind AS 117 is notified in India by MCA, IRDAI would be in a position to notify the regulation on preparation of Ind AS compliant financial statements and modify other regulations that may be impacted due to the implementation of Ind AS 117.
• Therefore, the effective date of implementation of Ind AS for insurance companies is not yet finalized and it would be finalized after the finalisation of IFRS 17 by IASB.
• IRDAI, vide circular dated 21 January 2020, has deferred implementation of Ind AS in the insurance sector till further notice. The circular dated 28 June 2017 was also withdrawn by IRDAI along with the requirement of proforma Ind AS financial statements being submitted on a quarterly basis as directed in that circular.