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Accounting Standards Board
Accounting Standards Board
AS 2 Valuation of Inventories
AS 5 Net profit or Loss for the period, Prior Period Items and Changes in Accounting Policies
AS 7 Construction Contracts
AS 9 Revenue Recognition
AS 12 Government Grants
AS 15 Employee Benefits
AS 16 Borrowing Costs
AS 17 Segment Reporting
AS 19 Leases
AS 24 Discontinuing Operations
AS 26 Intangible Assets
AS 27 Financial Reporting of Interests in Joint Ventures
AS 28 Impairment of Assets
ADVERTISEMENTS:
(3) ASB has to give due consideration to IAS issued by IASC from
time to time to develop own standards in light of conditions and
practices being followed in India.
ADVERTISEMENTS:
Enforcement of Standards:
ADVERTISEMENTS:
They are also required to report the extent of deviations if any from
standards. It may be noted here that the standards are also
applicable to the non-corporate entities like sole traders,
partnership firms, association of persons etc. U/S 210 A inserted by
the companies ordinance 1999, the Central Government may form
and constitute a National Advisory Committee on accounting
standards to advice the Central Government on the formulation of
accounting policies and standards for adoption by companies under
Companies Act.
The creation of NAC indicates that the ICAI will not be the final
authority to issue the accounting standards but the ultimate power
lies with the Central Government to prescribe the accounting
standards for adoption by companies in consultation with NAC. The
only positive change is there that accounting standards prescribed
U/s 210 A and U/s 211 of the companies Act will now have a
statutory force and companies will have to follow them.
The ASB formulates all the accounting standards for the Indian
companies. This process is fully transparent, very thorough and
completely independent of any government involvement. While
framing the standards the ASB will try and incorporate the IFRS and its
principles in the Indian standards. While India does not plan to adopt
the IFRS, this process will help the convergence of the two standards.
So the ASB will modify the IFRS to suit the laws, customs and
common usage in the country.
First, the ASB will identify areas where the formulation of accounting
standards may be needed
Then the ASB will constitute study groups and panels to discuss and
study the topic at hand. Such panels will prepare a draft of the
standards. The draft normally includes the definition of important
terms, the objective of the standard, its scope, measurement
principles and the representation of said data in the financial
statements.
The ASB then carries out deliberations of the said draft of the
standard. If necessary changes and revisions are made.
Then this preliminary draft is circulated to all concerned authorities.
This will generally include the members of the ICAI, and any other
concerned authority like the Department of Company Affairs (DCA),
the SEBI, the CBDT, Standing Conference of Public Enterprises
(SCPE), Comptroller and Auditor General of India etc. These
members and departments are invited to give their comments.
Then the ASB arranges meetings with these representatives to
discuss their views and concerns about the draft and its provisions
The exposure draft is then finalized and presented to the public for
their review and comments
The comments by the public on the exposure draft will be reviewed.
Then a final draft will be prepared for the review and consideration
of the ICAI
The Council of the ICAI will then review and consider the final draft
of the standard. If necessary they may suggest a few modifications.
Finally, the Accounting Standard is issued. In the case of standard for
non-corporate entities, the ICAI will issue the standard. And if the
relevant subject relates to a corporate entity the Central
Government will issue the standard.
Contents
1History
2Applicability[2][3][4][5]
o 2.1Mandatory Applicability from Accounting Period beginning on or after 1st April 2017
3List of Indian Accounting Standards[6]
4Provisions
5See also
6References
History[edit]
India followed accounting standards from Indian Generally Acceptable Accounting Principle (IGAAP)
prior to adoption of the Ind-AS.[2][3]
Applicability[2][3][4][5][edit]
Companies shall follow Ind AS either Voluntarily or Mandatorily. Once a company follows Indian AS,
either mandatorily or voluntarily, it can't revert to old method of Accounting.
=== Mandatory Applicability (1 April 16)
Every Company with Net worth of not less than 500 crores (5 billion).
Mandatory Applicability from Accounting Period beginning on or
after 1st April 2017[edit]
Ind AS 105 Non-Current Assets Held for Sale and Discontinued Operations
Ind AS 17 Leases
Ind AS 41 Agriculture
Phases of adoption
Net Worth Calculation
Voluntary adoption
SEBI Clarification
Phases of adoption
MCA has notified a phase-wise convergence to IND AS from current accounting
standards. IND AS shall be adopted by specific classes of companies based on their
Net worth and listing status. Let’s see the each of the phases in detail below:
Phase I
Mandatory applicability of IND AS to all companies from 1st April 2016, provided:
Phase II
Mandatory applicability of IND AS to all companies from 1st April 2017, provided:
Net worth shall be checked for the previous four Financial Years (2014-14, 2014-15,
2015-16, and 2016-17)
Phase III
Mandatory applicability of IND AS to all Banks, NBFCs, and Insurance companies from
1st April 2018, whose:
Net worth is more than or equal to INR 500 crore with effect from 1st April 2018.
IRDA (Insurance Regulatory and Development Authority) of India shall notify the
separate set of IND AS for Banks & Insurance Companies with effect from 1st April
2018. NBFCs include core investment companies, stock brokers, venture capitalists,
etc. Net Worth shall be checked for the past 3 financial years (2015-16, 2016-17, and
2017-18)
Phase IV
All NBFCs whose Net worth is more than or equal to INR 250 crore but less than INR
500 crore shall have IND AS mandatorily applicable to them with effect from 1st April
2019.
Please Note:
If IND AS become applicable to any company, then IND AS shall automatically be
made applicable to all the subsidiaries, holding companies, associated companies, and
joint ventures of that company, irrespective of individual qualification of such
companies.
In case of foreign operations of an Indian Company, the preparation of stand-alone
financial statements may continue with its jurisdictional requirements and need not be
prepared as per the IND AS.
However, these entities will still have to report their IND AS adjusted numbers for their
Indian parent company to prepare consolidated IND AS accounts.
Net Worth Calculation
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.
Voluntary adoption
Companies can voluntarily choose to incorporate IND AS in their reports for accounting
periods beginning on or after April 01, 2015. While reporting, such companies must
include a comparative report for the periods ending 31 March 2015 or thereafter, where
IND AS have been incorporated to present a comparative view. However, once a
company has started reporting as per the IND AS, it cannot change to reporting as per
previous laws.
SEBI Clarification
For all the issuer companies whose offer documents are filed with SEBI on or after 1st
April 2016, SEBI has issued a clarification on the applicability of the Indian Accounting
Standards (IND AS) and disclosures to be made in the offer documents. Typically,
SEBI requires issuer companies to disclose financial information for the previous 5
financial years immediately preceding the year of filing of the offer document, while
following uniform accounting policies for each of the financial years. For those issuer
companies filing an offer document these points can be noted:
1. Up to March 31, 2017, all of the financial statements filed by them can be under Indian
GAAP.
2. Between April 1, 2017 and March 31, 2018, disclosures in the previous three financial
years immediately preceding the relevant financial year will have to be made under the
IND AS principles, while disclosures for the remaining two financial years may be done
under Indian GAAP.
3. Between April 1, 2018, and March 31, 2019, disclosures in the previous three financial
years immediately preceding the relevant financial year will have to be made under the
IND AS principles, while disclosures for the remaining two financial years may be done
under Indian GAAP.
4. Between April 1, 2019 and March 31, 2020, disclosures in the previous four financial
years immediately preceding the relevant financial year will have to be made under the
IND AS principles, while disclosures for the remaining one financial year may be done
under Indian GAAP.
5. On or after April 1, 2020, disclosures in all the previous five financial years will have to
be made as per the IND AS principles.
SEBI has also provided discretion to issuer companies to present financial statements
for all five financial years under IND AS on a voluntary basis. This clarification does not
apply to issuer companies making rights issue.
The major standards are listed here below:
Ind AS 105 Non-Current Assets Held for Sale and Discontinued Operations
Ind AS 17 Leases
Ind AS 18 Revenue