The document discusses India's roadmap for adoption of Ind-AS (Indian Accounting Standards), which are converged with IFRS. It provides details on the phased implementation of Ind-AS based on factors like net worth and listing status of companies. Large or listed companies have to adopt Ind-AS earlier. It also discusses some key challenges for India in implementing Ind-AS like changes to taxation laws, training of professionals, and adapting reporting systems. Overall, the document provides a comprehensive overview of India's transition to Ind-AS standards for financial reporting.

1. IND-AS ROADMAP
BACKGROUND
Before IND AS , AS were applied by the companies but now IND AS come into role .For some companies
it has been mandatory, for some it has choice ,for some companies deadline is issued for transition. The
Companies not covered under the Ind AS notification, would continue to apply with existing accounting
standards under Companies (Accounting Standard) Rules, 2006.The volume and breadth of differences
between Indian GAAP and Ind AS is enormous. Further, its impact will vary by industry and for each
company. Ind AS will cover every area comprising reported revenues, expenses, assets, liabilities and
equity. In our view, companies will have to devote substantial amount of their time especially in the
following areas while preparing for Ind AS adoption. Like Revenue recognition,Financial
Instruments,Consolidation ,Business Combination,Taxes.
INTRODUCTION
Ind AS the new set of accounting standards was notified by the Ministry of Corporate Affairs (MCA) on
February 19, 2015. As of date, there are 39 Ind AS notified by the MCA. IND AS is outcome of IFRS and
IAS. IFRS is global accounting standard. It includes (a) IAS { issued upto year 2000 } & 23 IAS in effect. (b)
IFRS { issued after 2000 } & 16 IFRS in effect. The application of Ind AS is based on the listing status and
net worth of a company.
Interpretation is issued by IFRIC { International Financial Reporting Interpretation Committee} and SIC
( Standing Interpretation Committee.)
Note- Opinion of implementation committee(Group) is relevant.
IND AS = IAS + IFRS + INTERPRETATION + CARVES

2. FORMATION OF IND-AS
The IND AS are named and numbered in the same way as the corresponding IFRS & IAS.
(a) IAS – IND AS with same number i.e. IAS 1 = IND AS 1
(b) IFRS – IND AS with code of 100 i.e. IFRS1 = IND AS 101
CARVES
• Economic Reason
• Legal carve
• Misleading treatment in IFRS
• Reduction in accounting attention
• Change in terminology
FORMATION OF AS
• AS are based on IFRS but not updated.
• Existing AS which is withdrawn from 1-4-2010 and new AS will be introduced from 1-4-
2020 for small entity.
• Accounting Standard are applicable for those entity on which IND AS are not applicable.
IND AS RULE 2015 UPDATED UPTO 2019
IND AS NEW AS
=Reduction in
disclosures
=Reduction in use of PV
=Reduction in FV

3. Applicablity (force)
= Auditor and Management both are equally responsible for compliance of all IND AS.
= Auditor must made an explicit and un- reserved statement for compliance of all IND AS
Voluntary application
(PHASE – I
• Any company including its holding,
subsdiary,associate and joint venture may
apply IND AS on or after 1-4-2015.
Mandatory ( PHASE -I) • All companies having net worth 500 cr. Or
more shall apply IND AS from 1-4-2016 on
mandatory basis and present first IND AS
financial statement as at 31-3-2017.
Mandatory ( PHASE-II) • All companies which is listed or proposed to be
listed in india or outside India , shall comply
(having net worth less than 500 cr.) shall apply
IND AS from 1-4-2017 and prepare first
financial statement on 31-3-2018 based on IND
AS
• Unlisted companies having networth 250 cr. Or
more but less than 500 cr. shall apply IND AS
from 1-4-2017 and prepare first financial
voluntary
application
mandatory
(phase-II)
mandatory
(phase-I)

4. statement based on IND AS on 31-3-2018.
• Holding, subsdiary , Associate and Joint
venture of above.
Summary of application of companies (CO. registered under Co. Act
1956 or 2013)
RULES FOR NBFC
DATE APPLICATION
1-4-2018 All NBFC having networth 500cr. Or more ( including holding , subsdiary,
associates and joint venture ) shall comply IND AS from 1-4-2018.
1-4-2019 NBFC which is listed or in process of listing in india or outside india having
networth less than 500 crore.
• Unlisted NBFC having networth less than 500cr. But having
APPLICATION OF IND-AS IS MANDATORY
listed or in process of
listing, holding ,
subsidairy, associate
and joint venture.
unlisted having networth 250
cr. or more and its holding ,
subsdiary, associates and
joint venture
Co. followed IND AS
volantiry including holding,
subsdiary, associates &
Joint venture

5. networth 250 cr. Or more shall apply IND AS from 1-4-2019
• Holding, subsdiary ,associate and joint venture above.
*for others NBFC , AS are mandatory.
PROVISION FOR BANKING COMPANIES
All the banks except regional rural banks
and urban co- operative banks shall apply
IND AS from 1-4-2019
PROVISION FOR INSURANCE COMPANIES
All insurance companies shall
apply IND AS from 1-4-2020
NOTES:=
1. SME (Small Medium Exchange)

6. Companies listed under SME (Small Medium Exchange) are not required to comply IND
AS on listing basis.
2. Net worth
Particulars Amount
Paid up ESC ***
Paid up PSC ***
P&L A/C (credit bal.) ***
All reserve created out of profit ***
Secuirity Premium Account ***
Realised capital reserve ***
Fictitious assets (***)
P&L A/c (debit bal.) (***)
total ***
3.There is no exit rule.
There is no exit rule. It means once IND AS applied to any entity then all subsequent FS must be
prebarred as per IND AS.
4. Parent company is Indian and subsdiary company is foreign co.
When Parent company is Indian and subsdiary company is foreign co. then treatment is as
follows:
* Net worth does not include revaluation reserve.
*Net worth must be audited.
*Net worth of 31st march shall be considered.
Consolidation financial
statement as per IND AS
Separate F.S. of subsidiary as
per local GAAP.

7. 5. Parents company is Foreign company and subsdiary company is
Indian co.
When Parents company is Foreign company and subsdiary company is Indian co. then
treatment is as follows:
6. Process of transition
At the time of first time adoption of IND AS as follows:
1. Prepare main balance at the end of the year of first time adoption.
2. Prepare comparative balance sheet at the end of the preceeding year.
3. Prepare transitional balance sheet at the beginning of preceeding year.
EXAMPLE
X ltd. Is require to follow IND AS from 1-4-2017 on mandatory basis. Evaluated process of
transition.
Answer:
= Prepare a converted Balance sheet as on 1-4-2016 (from AS to IND AS )
=Prepare first balance sheet as on 31-3-2017 with comparative of 31-3-2017.
= Present Balance Sheet at first time under IND AS as follows:
Particulars 31-3-2018 31-3-2017 1-4-2016
Main B/S Comparative Transition
How Indian Companies Will Benefit From IND-AS
Individual F.S. of subsdiary
as per IND AS
Consolidated F.S. as per local
GAAP

8. • After the implementation of new Indian Accounting Standard (Ind-AS), TATA Steel, Maruti
Suzuki, UltraTech, BPCL, and Coal India may report 3-12% increase in earnings.
• However, on the contrary, earnings of ITC, Lupin, Bharti Infratel, and Arvind may fall by 4-10%.
Whereas the new standards will be adopted by the companies each with the net worth of Rs
500 crore or more in FY17.
• The considerable impact of the transition would be observed in the computation of revenue, net
profit, operating profit and net worth of the listed companies.
• The sectors that are likely to be impacted most include telecoms, metals, oil & gas and real
estate. As per the estimates are drawn by the analyst, it is most likely that the overall EBITDA
may drop by 2-3% while the revenues will increase by 4-5% by the introduction of new norms.
• In order to comply with new norms, the publicly-listed companies have been given additional
one month by Sebi to declare the results for the June and September quarters. How Indian
Companies Will Benefit From New Accounting Standards
Challenges involved in IFRS implementation in India
There are number of challenges that India is likely to face with regard to convergence with IFRS. In
face convergence with IFRS is not only just technical exercise but also involves overall changes in not
only the perspective but also the very objective of accounting in the country. Challenges may be
with regard to significant business and regulatory matters like structuring of ESOP schemes, training
of employees, tax planning, modification of IT system, compliance with debt and investors
understanding level of shift from Indian GAAP to IFRS. Lets discussion some the challenges in the
convergence with IFRS:
Fair Value Accounting: The use of fair value accounting can bring volatility and subjectively
to the financial statements. It is very difficult to arrive at the fair value and valuation experts also
feel difficulty to shift from historical method to fair value method. Moreover, adjustments to fair
value results in gains or losses which are reflected in the income statements. Whether this can be
included in computing distributable profit is also debatable issue.

9. Amendments to the existing law: Another biggest challenge is with the existing laws•
which are observed in the Companies Act 1956, SEBI regulations, banking laws and regulations and
the Insurance laws and regulations. Currently, the reporting requirements are governed by these
regulators in India. Hence, it seems very difficult to amend these laws to meet the requirement of
IFRS convergence.
Taxation: Convergence of IFRS demand changes in existing changes in Tax laws.• Currently,
Indian Tax Laws doesn’t recognize the Accounting Standards. A complete renovation in Tax Laws is
the major challenge faced by the Indian Law Makers. It National Seminar on “IND-AS : A Road Map
for IFRS in India” VVPGC March 18 & 19, 2016 ISBN : 978-93-5254-333-5 7 involves great changes in
the Tax Laws in order to make tax authorities to recognize IFRS-Compliant financial statements.
Ministry of Corporate Affairs of India had formed committee to identify various legal and regulatory
changes required for convergence.
Lack of trained professionals: IFRS implementation requires a professionally trained
human force, but India doesn’t have sufficient number of fully trained professionals to carry out the
process. So, successful implementation of IFRS need to have adequate number of properly trained
Chartered Accountants, Account Preparers, Government officials, Academicians and professionals
for a smooth and effective adoption process.
Training: One of the biggest hurdles in implementing IFRS is that lack of training facilities and
academic courses on IFRS in India. IFRS foundation already offering Online IFRS programme, diploma
and certificate courses and also The Institute of Chartered Accountants of India (ICAI) has started
IFRS Training programmes for its members, Chartered Accountants and other interested parties.
Still, there exists a large gap between Trained Professionals required and trained professionals
available
Awareness about International Practices: Adoption of IFRS will definitely bring
drastic changes. The users of financial in formations have to look from different perspective as there
is number of difference between IFRS and Indian AS. So, it is very much necessary to bring
awareness about IFRS and their impact on financial statements among different stakeholders.
Management reporting system: The disclosure and reporting requirements under IFRS are
completely different from Indian reporting requirement. So, every company has to amend their
existing business reporting model to suit the requirement of IFRS. Proper internal control is
requirement while modifying the information system. It may be relating to fixed assets, segment
reporting, related party transactions etc.
Management compensation plan: The rules, terms and conditions relating to
management compensation plans also demands changes because the financial results arrived under
IFRS are very different from those under Indian GAAP. Hence, existing contracts and agreements
have to be re-negotiated which is a biggest challenge for a company.

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