Indian Accounting Standard

Indian Accounting Standards often referred to as IND-AS is a type of Accounting

Standard that is adopted by companies in India under the vigilance of the Accounting
Standards Board {ASB}, constituted a government regulatory body in the year 1977.
The National Advisory Committee on Accounting Standards {NACAS} specifies these
standards to the Ministry of Corporate Affairs {MCA}. Then the MCA narrates the
applicability of these standards on various companies in India.
The MCA gave its latest guidelines in the 41 IND AS. It specifies that it will be applied to
companies voluntarily in the Financial Year 2015-16, and mandatorily from the Financial
Year 2017-18.
Previously before the adaption of the IND-AS, Indian companies followed the accounting
standards given by the Indian Generally Acceptable Accounting Principle {IGAAP}
Indian Accounting Standard (abbreviated as Ind-AS) is the Accounting standard adopted by
companies in India and issued under the supervision of Accounting Standards Board (ASB)
which was constituted as a body in the year 1977.
Accounting Standards Board (ASB) is a committee under Institute of Chartered Accountants
of India (ICAI) which consists of representatives from government department,
academicians, other professional bodies viz. ICAI, representatives from the Associated
Chambers of Commerce and Industry of India (ASSOCHAM), Confederation of Indian
Industry (CII), Federation of Indian Chambers of Commerce & Industry (FICCI), etc.
The Indian Accounting Standard (Ind AS) are named and numbered in the same way as
the International Financial Reporting Standards (IFRS). National Advisory Committee
on Accounting Standards (NACAS) recommend these standards to the Ministry of Corporate
Affairs (MCA). Ministry of Corporate Affairs (MCA) has to spell out the Accounting
Standards applicable for companies in India. As on date MCA has notified Indian Accounting
Standard. This shall be applied to the companies of financial year 2015-16 voluntarily and
from 2016-17 on a mandatory basis. Based on the international consensus, the regulators will
separately notify the date of implementation of Ind-AS for the banks, insurance companies
etc. Standards for the computation of Tax has been notified as ICDS in February 2015

 Objectives of Accounting Standards

(1)To provide information: The main objectives of accounting standards is to provide
information to the users.it sets the standards on which accounts have to be prepared.
(2)To harmonise different Accounting process: accounting standards are evolved to bridge
the gap between various accounting procedure to harmonise the different accounting process.
 (3)To enhance the contents: Accounting standards enhance the credibility and comparability
of the financial statements.

Applicability of IND AS – Indian Accounting Standards:

The Ministry of Corporate Affairs (MCA), in 2015, had notified the Companies (Indian
Accounting Standards (IND AS)) Rules 2015, which stipulated the adoption and applicability
of IND AS in a phased manner beginning from the Accounting period 2016-17. The MCA
has since issued three Amendment Rules, one each in year 2016, 2017, and 2018 to amend
the 2015 rules.
The IND AS are basically standards that have been harmonised with the IFRS to make
reporting by Indian companies more globally accessible. Since Indian companies have a far
wider global reach now as compared to earlier, the need to converge reporting standards with
international standards was felt, which has led to the introduction of IND AS.

Benefits of Accounting Standards

1] Attains Uniformity in Accounting

2] Improves Reliability of Financial Statements

3] Prevents Frauds and Accounting Manipulations

4] Assists Auditors

5] Determining Managerial Accountability

Limitations of Accounting Standards

1] Difficulty between Choosing Alternatives

2] Restricted Scope

Ind As No. Name of Indian Accounting Standard

Ind AS 101 First-time adoption of Ind AS

Ind As No. Name of Indian Accounting Standard

Ind AS 102 Share Based Payment

Ind AS 103 Business Combination

Ind AS 104 Insurance Contract

Ind AS 105 Non-Current Assets Held for Sale and Discontinued Operations

Ind AS 106 Exploration for and Evaluation of Mineral Resources

Ind AS 107 Financial Instruments: Disclosures

Ind AS 108 Operating Segments

Ind AS 109 Financial Instruments

Ind AS 110 Consolidated Financial Statements

Ind AS 111 Joint Arrangements

Ind AS 112 Disclosure of Interests in Other Entities

Ind AS 113 Fair Value Measurement

Ind AS 114 Regulatory Deferral Accounts

Ind AS 115 Revenue from Contracts with Customers(Applicable from April 2018)
Ind As No. Name of Indian Accounting Standard

Ind AS 116 Leases (Applicable from April 2019)

Ind AS 1 Presentation of Financial Statements

Ind AS 2 Inventories

Ind AS 7 Statement of Cash Flows

Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors

Ind AS 10 Events occurring after Reporting Period

Ind AS 11 Construction Contracts (Omitted by the Companies Amendment Rules, 2018)

Ind AS 12 Income Taxes

Ind AS 16 Property, Plant and Equipment

Ind AS 17 Leases (Omitted by the Companies Amendment Rules,2019)

Ind AS 18 Revenue (Omitted by the Companies Amendment Rules, 2018)

Ind AS 19 Employee Benefits

Ind AS 20 Accounting for Government Grants and Disclosure of Government Assistance

Ind AS 21 The Effects of Changes in Foreign Exchange Rates

Ind AS 23 Borrowing Costs

Ind As No. Name of Indian Accounting Standard

Ind AS 24 Related Party Disclosures

Ind AS 27 Separate Financial Statements

Ind AS 28 Investments in Associates and Joint Ventures

Ind AS 29 Financial Reporting in Hyper inflationary Economies

Ind AS 32 Financial Instruments: Presentation

Ind AS 33 Earnings per Share

Ind AS 34 Interim Financial Reporting

Ind AS 36 Impairment of Assets

Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets

Ind AS 38 Intangible Assets

Ind AS 40 Investment Property

Ind AS 41 Agriculture
 International Financial Reporting Standards (IFRS)

International Financial Reporting Standards (IFRS) set common rules so that financial

statements can be consistent, transparent and comparable around the world. IFRS are issued
by the International Accounting Standards Board (IASB). They specify how companies must
maintain and report their accounts, defining types of transactions and other events with
financial impact. IFRS were established to create a common accounting language, so that
businesses and their financial statements can be consistent and reliable from company to
company and country to country.

IFRS are designed to bring consistency to accounting language, practices and statements, and
to help businesses and investors make educated financial analyses and decisions. The IFRS
Foundation sets the standards to “bring transparency, accountability and efficiency to
financial markets around the world… fostering trust, growth and long-term financial stability
in the global economy.” Companies benefit from the IFRS because investors are more likely
to put money into a company if the company's business practices are transparent

History of IFRS

IFRS originated in the European Union, with the intention of making business affairs and
accounts accessible across the continent. The idea quickly spread globally, as a common
language allowed greater communication worldwide. Although the U.S. and some other
countries don't use IFRS, most do, and they are spread all over the world, making IFRS the
most common global set of standards.

The IFRS website has more information on the rules and history of the IFRS.

The goal of IFRS is to make international comparisons as easy as possible. That goal hasn't
fully been achieved because, in addition to the U.S. using GAAP, some countries use other
standards. And U.S. GAAP is different from Canadian GAAP. Synchronizing accounting
standards across the globe is an ongoing process in the international accounting community.

IFRS Standards are required in more than 140 jurisdictions and permitted in many parts of
the world, including South Korea, Brazil, the European Union, India, Hong
Kong, Australia, Malaysia, Pakistan, GCC countries, Russia, Chile, Philippines, South
Africa, Singapore and Turkey.

Due to the difficulty of maintaining up-to-date information in individual jurisdictions, three

sources of information on current worldwide IFRS adoption are recommended:

 IFRS Foundation profiles page

 The World Bank
 International Federation of Accountants

Advantages of Adopting IFRS

1. It would create a single set of accounting standards around the world.

2. It would reduce the time, effort, and expense of preparing multiple reports.

3. It would not be a costly transition in the United States.

4. It would make it easier to monitor and control subsidiaries from foreign countries.

5. It would follow the same process that many American agencies already follow.

6. It would offer more flexibility in the accounting practices.

7. It would make it easier for all companies to do business in foreign countries.

Disadvantages of Adopting IFRS

1. It would increase the cost of implementation for small businesses.

2. It would lead to concerns with standards manipulation.

3. It would require global consistency in auditing and enforcement.

4. It would increase the amount of work placed on accountants.

5. It would create an adjustment period filled with tumult.

6. It would require changes at the educational level as well.