Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Monday, May 29, 2017

Applicability of Indian Accounting Standards (Ind-AS)

Four phases for convergence to IND AS from current accounting standards have been notified by the Ministy of Corporate Affairs.

Phase I: Applicability w.e.f. 1st April 2016
A company, listed or unlisted, shall be mandatorily required to apply IND AS from 1st April 2016 provided :
I. Its Net Worth is greater than or equal to Rs. 500 Crores.

Note
a) Net worth shall be checked for previous 3 Financial Years i.e. as on 31.03.2014, 31.03.2015 & 31.03.2016
b) IND AS shall be applicable if Net Worth of company is more than equal to INR 500 Crores on any of the above dates.
c) Net Worth means: [Paid up share Capital + all reserves created from out of profit* & securities premium account - accumulated losses, deferred expenditure and miscellaneous expenditure not written off]

* Capital Reserve shall not be included in calculation of Net Worth, except when arising out of Promoters Contribution and Govt. Grant Recieved.

Phase II: Applicability w.e.f. 1st April 2017

A company shall be mandatorily required to apply IND AS from 1st April 2016 provided :
I. It is a listed company or is in the process of being listed; or
II. Its Net Worth is greater than or equal to Rs. 250 Crores but less than Rs. 500 Crores.

Note
a) Listing status shall be checked as on 31.03.16.
b) Net worth shall be checked for previous 4 Financial Years i.e. as on 31.03.2014, 31.03.2015 & 31.03.2016 & as on 31.03.2017. 
c) IND AS shall be applicable if Net worth of company is more than equal to INR 250 Crores but less than INR 500 crores on any of the above dates.

Phase III: Applicability w.e.f. 1st April 2018

Banks, NBFC, Insurance companies shall adopt IND AS from 1st April 2018.

I. NBFC: NBFC whose Net Worth is more than or equal to INR 500 crores shall apply IND AS w.e.f. 1st April 2018.
II. Banks & Insurance Companies shall adopt a separate set of IND AS w.e.f. 1st April 2018 as notified by IRDA.

Note
a) NBFC includes core investment companies, stock brokers, venture capitalists, etc.
b) Net Worth to be checked for 3 years i.e. 31.03.2016, 31.03.2017 & 31.03.2018

Phase IV: Applicability w.e.f. 1st April 2019

I. NBFC: NBFC whose Net Worth is more than or equal to INR 250 crores but less than 500 crores shall apply IND AS w.e.f. 1st April 2019.

General Note

If IND AS becomes applicable to a company then, IND AS shall be automatically applicable to all subsidiaries, holding companies, associate companies and joint ventures irrespective of individual qualification of such companies.

14 comments:

  1. I’ve been searching for some decent stuff on the subject and haven't had any luck up until this point, You just got a new biggest fan!.. Accountants near me

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  2. Dear Sandeep Sir,
    Thanks for the article........in phase I you mentioned that we have to check Net worth for previous three financial years i.e. 31.03.2014, 31.03.2015 and 31.03.2016 if my net worth is more than 500 crore on 31.03.2016 than how can i apply IndAS from 01.04.2016. Please clarify....similar case in Phase II

    ReplyDelete
    Replies
    1. sir please clarify.......also suggest how to learn IndAS

      Delete
    2. If your networth is greater than 500 crore for the respective preceeding 3 financial years, you have to prepapre your financial statements as per IND-AS for the next financial year 2016-17.
      2013-14 - NA ( Base year to calculate net worth)
      2014-15 - NA ( Base year to calculate net worth)
      2015-16 - NA ( Base year to calculate net worth)
      2016-17 - Applicable

      Delete
  3. Sir,

    Is revaluation Reserve can be considered for calculation of Net Worth for applicability of Ind-AS? As per companies Act,2013 Revaluation reserve is not considered for computation of Net Worth.

    ReplyDelete
  4. NO Revaluation Reserve is not created out of profits so you cannot consider it for net worth calculations

    ReplyDelete
  5. We have net woth of Less than 250 cr. and Unlisted Company .
    Plz confirm when IndAS will be applicable

    ReplyDelete
  6. In case of banking company and insurance company ind as applicable when rbi and irda notify the date

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  10. Dear Mr Ahuja,

    If a private limited company has listed its debentures in Mar 2018, will IND AS apply to such Company. As the same was not in the process of listing as on March 31, 2016, mentioned in the applicability provision in your blog

    ReplyDelete
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