This presentation takes one through the differences between Indian GAAP (old) vs IND AS (based on IFRS). All major differences have been covered in addition to IFRS carve outs.
AS vs IND AS (Old vs New Indian Accounting Standards)
1. Indian Accounting Std (old)
vs
IND AS (New)
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3. Consolidation Process
One time
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Currency
Adjustment
Fixed Assets
Schedule
JV Proportion
LBLA
Setup
Master
Minority
Goodwill
Consolidation
Intra Group
Transactions
Equity Impact
Upload
Trial
Balances
Balance
Sheet
Accounting Policies
Adjustment
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Profit and
Loss Account
5. TOPICS COVERED
Differences with respect to:
• Conceptual Accounting Framework
• Accounting Differences
• Carve Outs
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6. ACCOUNTING FRAMEWORK
Historical cost
IFRS:
Historical cost, but intangible assets, property plant and equipment (PPE) and
investment property may be revalued. Derivatives, biological assets and most
securities must be revalued.
Indian GAAP:
Historical cost, but fixed assets, other than intangibles, may be revalued.
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7. ACCOUNTING FRAMEWORK
First-time adoption of accounting frameworks
IFRS:
Full retrospective application with some optional exemptions.
Indian GAAP:
particular standards specify the transitional treatment upon the first-time
application of those standards
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8. LIST OF IND AS, IFRS AND AS
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9. Ind AS
IFRS
AS
Ind AS 1 Presentation
of Financial
Statements
IAS 1 Presentation of
Financial Statements
AS 1 Disclosures of
Accounting Principles
and Policies
Ind AS 2 Inventories
IAS 2 Inventories
AS 2 Valuation of
Inventories
Ind AS 7 Statement of
Cash Flows
IAS 7 Statement of Cash
Flows
AS 3 Cash Flow
Statements
Ind AS 8 Accounting
Policies, Changes in
Accounting Estimates
and Errors
IAS 8 Accounting
AS 4 Contingencies and
Policies, Changes in
Events occurring after
Accounting Estimates and Balance Sheet Date
Errors
Ind AS 10 Events after
the Reporting Period
Ind AS 10 Appendix A
IAS 10 Events after the
Reporting Period
IFRIC 17 Distribution of
Non-cash Assets to
owners
AS 5 Net Profit or Loss for
the period, Prior Items
and Changes in
Accounting Policies
10. Ind AS 11 Construction
Contracts
Ind AS 11 Appendix A
(deferred)
Ind AS 11 Appendix B
(deferred)
IAS 11 Construction
AS 7 Construction
Contracts
Contracts
IFRIC 12 Service
Concession Arngmt
SIC 29 Disclosure – Service
Concession Arrangements
Ind AS 12 Income Taxes
Ind AS 12 Appendix A
IAS 12 Income Taxes
AS 22 Accounting for Taxes
on Income
SIC 21 Income Taxes –
Recovery of Revalued NonDepreciable Assets
SIC 25 Income Taxes –
Changes in the Tax Status
of an Enterprise or its
Shareholders
Ind AS 12 Appendix B
Ind AS 16 Property, Plant
and Equipment
IAS 16 Property, Plant and
Equipment
AS 10 Accounting for Fixed
Assets
AS 6 Depreciation
Accounting
11. Ind AS 16 Appendix A
IFRIC 1 Changes in Existing
Decommissioning, Restoration
and Similar Liabilities
Ind AS 17 Leases
Ind AS 17 Appendix A
IAS 17 Leases
AS 19 Leases
SIC 15 Operating Leases –
Incentives
SIC 27 Evaluating the Substance of
Transaction involving the Legal
Form of a Lease
IFRIC 4 Determining Whether an
Arrangement contains a Lease
Ind AS 17 Appendix B
Ind AS 17 Appendix C
(Deferred)
Ind AS 18 Revenue
Ind AS 18 Appendix A
Ind AS 18 Appendix B
Ind AS 18 Appendix C
IAS 18 Revenue
AS 9 Revenue
Recognition
SIC 31 Revenue – Barter
Transactions Involving Advertising
IFRIC 13 Customer Loyalty
Programmes
IFRIC 18 Transfer of Assets from
Customers
12. Ind AS 19 Employee
Benefits
Ind AS 19 Appendix A
Ind AS 19 Employee
Benefits
Ind AS 19 Appendix A
AS 15 Employee Benefits
Ind AS 20 Accounting For
Government Grants and
Disclosure of Government
Assistance
Appendix A Government
Assistance – No Specific
Relation in Operating
Activities
Ind AS 20 Accounting For
Government Grants and
Disclosure of Government
Assistance
Appendix A Government
Assistance – No Specific
Relation in Operating
Activities
AS 12 Accounting for
Government Grants
Ind AS 21 The Effects of
Changes in Foreign
Exchange Rates
Ind AS 21 The Effects of
Changes in Foreign
Exchange Rates
AS 11 The Effects of
Changes in Foreign
Exchange Rates
Ind AS 23 Borrowing Costs
Ind AS 23 Borrowing Costs
AS 16 Borrowing Costs
13. Ind AS 24 Related
Party Disclosure
IAS 24 Related Party Disclosure
AS 18 Related Party
Disclosures
No Near Final Draft
IAS 26 Accounting and
Reporting by Reporting by
Retirement Benefits Plans
No standard
Ind AS 27 / IFRS 10
Consolidated and
Separated Financial
Statements
Ind AS 27 Appendix
A
IAS 27 Consolidated Separated
and Financial Statements
AS 21 Consolidated Financial
Statements
SIC 12 Consolidation – Special
Purpose Entities
Ind AS 28 Investment IAS 28 Investment in Associates
in Associates
AS 23 Accounting for
Investments in Associates in
Consolidated Financial
Statements
Ind AS 29 Financial
Reporting in
Hyperinflationary
Economies
Ind AS 29 Appendix
A
No standard
IAS 29 Financial Reporting in
Hyperinflationary Economies
IFRIC 7 Applying the
Restatement Approach under
IAS 29 Financial Reporting in
Hyperinflationary Economies
14. Ind AS 31 Interest in Joint
Ventures / IFRS 11
Ind AS 31 Appendix A
IAS 31 Interest in Joint Ventures
Ind AS 32 Financial
Instruments: Presentation
Ind AS 32 Appendix B
IAS 32 Financial Instruments:
Presentation
AS 31 Financial
Instruments :
Presentation
Ind AS 33 Earning Per
Share
IAS 33 Earning Per Share
AS 20 Earnings per Share
Ind AS 34 Interim
Financial Reporting
Ind AS 34 Appendix A
IAS 34 Interim Financial
Reporting
AS 25 Interim Financial
Reporting
SIC 13 Jointly Controlled Entities
– Non-Monetary Contributions
by Venturers
AS 27 Financial
Reporting of Interests in
Joint Ventures
IFRIC 10 Interim Financial
Reporting and Impairment.
Ind AS 36 Impairment Of
Assets
IAS 36 Impairment Of Assets
AS 28 Impairment of
Assets
Ind AS 38 Intangible
Assets
Ind As 38 Appendix A
IAS 38 Intangible Assets
AS 26 Intangible Assets
SIC 32 Intangible Assets –
Website Costs
15. Ind AS 37 Provisions,
Contingent Liabilities
and Contingent Assets
Ind AS 37 Appendix A
Ind AS 37 Appendix B
Ind AS 39 Financial
Instruments :
Recognition and
Measurement
Ind AsS39 Appendix C
Ind AS 39 Appendix D
Ind AS 39 Appendix E
IAS 37 Provisions, Contingent
Liabilities and Contingent Assets
AS 29 Provisions, Contingent
Liabilities and Contingent
Assets
IFRIC 5 Rights to Interest Arising
from Decommissioning,
Restoration and Environmental
Rehabilitation Funds
IFRIC 6 Liabilities Arising from
Participating in a Specific Market
– Waste Electrical and Electronic
Equipment
IAS 39 Financial Instruments :
Recognition and Measurement
IFRIC 9 Reassessment of
Embedded Derivatives
IFRIC 16 Hedges of a net
Investment in Foreign Operation
IFRIC 19 Extinguishing Financial
liabilities with Equity
instruments
AS 30 Financial Instruments
: Recognition and
Measurement
16. Ind AS 40 Investment
Property
IAS 40 Investment Property
No standard
No near Final Draft
IAS 41 Agriculture
No standard
Ind AS 101 First Time
Adoption of Indian
Accounting Standards
IFRS 1 First Time Adoption
of International Financial
Reporting Standards
No standard
Ind AS 102 Share Based
Payment
IFRS 2 Share Based Payment
No standard
Ind AS 103 Business
Combination
IFRS 3 Business
Combination
No standard
Ind AS 39 Insurance
Contracts
IFRS 4 Insurance Contracts
No standard
Ind AS 105 Non-Current
Assets Held for Sale and
Discontinuing operations
IFRS 5 Non-Current Assets
Held for Sale and
Discontinuing operations
No standard
Ind AS 106 Exploration for
and Evaluation of Mineral
Resources
IFRS 6 Exploration for and
Evaluation of Mineral
Resources
No standard
17. Ind AS 107 Financial
Instruments : Disclosures
IFRS 7 Financial
Instruments : Disclosures
No standard
Ind AS 108 Operating
Segments
IFRS 8 Operating Segments
No standard
Not covered in Ind AS
It was earlier covered in
Exposure Draft
IFRIC 2 Members’ Share in
Co-operative Entities and
Similar Instruments
No standard
Not covered in Ind AS
Not Relevant in India
SIC 7 Introduction of Euro
No standard
18. Major Carve Outs
• Revenue Recognition (IND AS 18)
– IFRIC 15 – Agreement for construction of real estate has
not been adopted
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19. Major Carve Outs
• Effects of changes in Foreign Exchange Rates
(IND AS 21)
– Option to recognise exchange differences on translation of
long term monetary items in equity
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20. Major Carve Outs
• Related Party Disclosures (IND AS 24)
– Overriding nature of statue
– Definition of relative as per Co.s Act
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21. Major Carve Outs
• Business Combinations (IND AS 103)
– Recognition of gain on day one accounting for a business
combination in capital reserve as opposed to income
statement under IFRS 3
– Guidance on Common Control Transactions
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22. Major Carve Outs
• Employee Benefits (IND AS 19)
– Government bond rate as discount rate
– Recognition of acturial gains and losses – Other long term
employee benefits – only in OCI and not P&L or P&L
amort
– Frequency of Acturial Valuation
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23. Major Carve Outs
• Financial Instruments – Rec and Msrmt (IND
AS 39)
– Change in fair value of a financial liability due to entitiy’s
own credit risk.
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24. Major Carve Outs
• Investment in Associates (IND AS 28)
– Different accounting periods and policies of associates
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25. Major Carve Outs
• Investment Property (IND AS 40)
– Only Cost Model
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26. Major Carve Outs
• EPS (IND AS 33)
– Both Standalone and CFS
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27. Major Carve Outs
• Govt Grants (IND AS 20)
– Non-monetary government grants only at fair value and not at nominal
value
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29. IND-AS 2 - Inventories
Fair value of purchases
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30. IND-AS 2 - Inventories
Timing of recognition of purchases
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31. IND-AS 2 - Inventories
Cost of inventories of a service
provider
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32. Changes in Accounting Policies, Estimates, Prior Period Itesm
IND AS 8 VS AS 5
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33. IND AS 8 - Acc pol., changes in acc est., errors
Changes in accounting policies
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34. IND AS 8 - Acc pol., changes in acc est., errors
Changes in method of depreciation
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35. IND AS 8 - Acc pol., changes in acc est., errors
Prior period items
- errors or omissions arising from a failure to use or
misuse of reliable information
- Retro
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36. IND AS 8 - Acc pol., changes in acc est., errors
extraordinary items
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37. Events after Balance Sheet Date
IND AS 10 VS AS 4
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38. IND AS 10 - Events after reporting date
• Proposed dividend
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40. IND AS 11 - Construction Contracts
Service Concession Arrangements (Ex)
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41. Ex – Service Concession Agrmt.
• A incurs cost of INR 1,000,000 for construction
of a road.
• In consideration, A receives a right to charge
toll of INR 30 on each vehicle plying on that
road for 30 years
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44. IND AS 18 – Revenue Recognition
Multiple element arrangements (Ex)
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45. IND AS 18 – Revenue Recognition
Example
• A sells a machine with a two year
maintenance service for INR 1,000,000 to a
customer.
• A two year maintenance service is provided to
other customers at a consideration of INR
200,000.
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46. IND AS 18 – Revenue Recognition
Linked transactions
Examples –
Loan origination fees charged by banks
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47. IND AS 18 – Revenue Recognition
Customer loyalty programmes
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48. IND AS 18 – Revenue Recognition
Extended credit
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49. IND AS 18 – Revenue Recognition
Barter transactions
• Recognition of transactions that were
previously not recognised (for example,
certain advertising barter transactions);
• Non-recognition of transactions that are
currently being recognised (for example,
certain oil barter transactions).
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50. IND AS 18 – Revenue Recognition
• Percentage Completion
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51. Business Combination and Consolidations
IND AS 27/28/31/103 VS
AS 14/21/23/27
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52. Business Combination / Consolidation
Definition of Control
– Substance over form
– Temporary
– SPE
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53. Business Combination / Consolidation
Contingent Consideration / Acq Date
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54. Business Combination / Consolidation
• Goodwill
– Fair Value of assets & liabilities acquired
– Amortisation
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55. Business Combination / Consolidation
• Minority
– Fair Value
– Negative
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56. Business Combination / Consolidation
Uniform Accounting Policy & Time Gaap
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57. Business Combination / Consolidation
Proportionate Consolidation
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58. Business Combination / Consolidation
Step up and Step down
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59. Property, Plant & Equipment
IND AS 16 VS AS 10
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60. IND AS 16 –Property, Plant & Eqpmt
• Overhead allocation
• Component approach
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61. IND AS 16 –Property, Plant & Eqpmt
Site Restoration
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62. IND AS 16 –Property, Plant & Eqpmt
• Revaluation of assets
• Depreciation on the same
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63. IND AS 16 –Property, Plant & Eqpmt
• Cash Price Equivalent
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64. IND AS 16 –Property, Plant & Eqpmt
• Residual Value and Useful life
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66. IND AS 23 - Borrowing Costs (BC)
No period as 12 months
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67. IND AS 23 - Borrowing Costs (BC)
Consolidation :– Special case of capitalisation of BC
– Group Average borrowing rate
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69. IND AS 7 - Cash Flow
• Undistributed profits of associates and noncontrolling interests’ under operating
activities.
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70. IND AS 7 - Cash Flow
• Ind AS 7 requires to report the aggregate
amount of the cash paid or received as
consideration for obtaining or losing control
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71. Deferred Tax
IND AS 12 VS AS 22
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72. IND AS 12
Balance sheet approach (Ex)
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73. IND AS 12
Examples
– on revaluation of PPE;
– indexation benefits for freehold land and
investments;
– fair value changes for available for sale securities;
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74. IND AS 12
Deferred Taxes arising in consolidation
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75. IND AS 12
Reconciliation of current tax as per actual
basis and as per applicable statutory rate
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76. Leases
IND AS 17 VS AS 19
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77. IND AS 17 - Lease
Embedded leases (Ex)
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78. Ex of an Embedded Lease
• A enters in a purchase contract with B to
purchase 1,000 units of product every month at
INR 25 per unit.
• Product can only be manufactured on a specific
machine owned by B.
• In case of any shortfall in procurement, A will
compensate B at the rate of INR 25 per unit of
shortfall.
• The entire output from machine is availed by A.
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79. IND AS 17 - Lease
Leases of land
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80. IND AS 17 - Lease
• Lease incentives
– Initial rent free period ?
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81. IND AS 17 - Lease
• Lease deposits
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83. IND AS 19 - Employee Benefits
• Actuarial gains and losses in OCI
– defined benefit plans and other long term
employment benefit plans.
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85. IND AS 21 – Foreign Exchange
• Functional Currency vs Domicile Currency
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86. IND AS 21 – Foreign Exchange
• Permits FE diff on long term monetary items
to be posted to equity. The accumulated diff
can be transferred to P/L over the term of
such item
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87. IND AS 21 – Foreign Exchange
• Existing AS 11 permits capitalisation / deferral
of Fe Gain/Loss arising from long term
monetary items
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89. IND AS 20 – Govt Grants
•
•
•
•
No credit to Reserves
No credit to PPE
Concessional Loans
Non-Monetary Grants
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90. Related Party
IND AS 24 VS AS 18
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91. IND AS 18 – Related Party
•
•
•
•
Defines close members of family
KMP of parents
Non-executive directors
Group companies
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92. Earning Per Share
IND AS 33 VS AS 20
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93. IND AS 33 – EPS
• Amounts debited to Share Premium
• Compulsory convertible instruments
• Shares held by Trust
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94. Share Based Payments
• Fair Value Model
• Grants to employees of Parent
• Shares Held in Trust
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95. •
•
•
•
•
•
Intangibles – Life – Finite or Indefinite
Investment Property – Classification
Financial Instruments
Segments
Provisions
Impairments
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