Summary of IND AS (Indian Accounting Standard)

Table of Contents
Contents
IND AS
 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 after the Reporting Period
 IND AS 12, Income Taxes
 IND AS 16, Property, Plant and Equipment
 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 24, Related Party Disclosures
 IND AS 28, Investments in Associates and Joint Ventures IND AS 32,
Financial Instruments
 IND AS 33, Earnings per Share
 IND AS 34, Interim Financial Reporting

Table of Contents
Contents
IND AS
 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 105, Non-current Assets Held for Sale and
Discontinued Operations
 IND AS 107, Financial Instruments: Disclosures
 IND AS 108, Operating Segments
 IND AS 109, Financial Instruments
 IND AS 110, Consolidated Financial Statements
 IND AS 112, Disclosure of Interest in Other Entities
 IND AS 113, Fair Value Measurement
 IND AS 115, Revenue from Contracts with Customers
 IND AS 116, Leases

Applicability of IND AS
Applicable to All listed
Companies(Other than
the companies listed in
SME)
Unlisted
Companies
if net worth
is more than
250 Cr.
Banks- No limit or criteria
Insurance
Companies-
No limit or
criteria

IND AS-1Presentation of Financial Statements
This standard prescribes the basis of Presentation of General Purpose Financial statements.
This will ensure comparability both with-
• Entity’s Financial statements of previous periods
• Financial statements of other entities
A complete set of financial statements, which should be presented, including comparatives, at least annually consists of:
balance sheet as at
the end of the
period
statement of profit
and loss for the
period
statement of
changes in equity
for the period
statement of cash
flows for the
period
Notes, comprising
significant accounting
policies and other
explanatory information
comparative
information the
preceding period.

Fundamental Assumptions
 Present true and fair presentation and compliance with Ind AS.
 Prepare financial statements on a going concern basis unless management either intends to liquidate the entity or to
cease trading, or has no realistic alternative but to do so.
 prepare using the accrual basis of accounting, except for cash flow information present separately items of a
dissimilar nature or function unless they are immaterial except when required by law.
 Shall not offset assets and liabilities or income and expenses, unless required or permitted by an Ind AS.
 Present comparative information in respect of the preceding period for all amounts reported in the current period’s
financial statements.
Ind AS 1 does not provide a format for presenting financial statements; however it provides line items to be presented
The balance sheet shall include line items related to
• In respect of equity
• In respect of assets
• In respect of liabilities
• In respect of assets and liabilities held for sale
The statement of profit and loss should present
• profit or loss;
• (b) total other comprehensive income;

IND AS-2 Valuation of Inventories
Ind AS 2 prescribes the accounting treatment for inventories, such as, determination of cost and its subsequent recognition
as expense, including any write-downs of inventories to net realizable value and reversal of write-downs
The cost of inventories shall be assigned by using
First-in, first-out (FIFO) or
Weighted average cost formula.

Carve-out from AS-2
• Subsequent recognition of cost/carrying amount of inventories as an expense.
• Provides detailed guidance in case of subsequent assessment of NRV. It also deals with the reversal of the write-
down of inventories to NRV
 Suppose inventory is reduced below cost but the situation changes later and the product can be sold now. Written
down value can be reversed to the maximum of earlier written down amount i.e.cost
• Ind AS 2 allows free choice between FIFO and weighted average methods (clarified in education material issued
by ICAI).
• Ind AS 2 defines FV and provides an explanation in respect of distinction between ‘NRV’ and ‘FV’.
• Example: An entity holds inventories of 1000 units and its market selling price @ Rs.10/- each after selling
expenses. The entity has an order in hand to sell the inventories @ Rs. 11/-. In this situation, FV is Rs 10/- each,
but NRV is Rs. 11/- each.

IND AS-7 Statement of Cash Flows
Cash Flows can be Classified as follows The Cash flows from the three activities can be elaborated as
Cash Flow can be prepared by two methods
 Direct Method
 Indirect Method
An investment normally qualifies as a cash equivalent only when it has a short maturity of, say, 3 months or less
from the date of acquisition.

Treatment in Specific Situations & Disclosures
The aggregate cash flows arising from obtaining or losing control
of subsidiaries or other businesses shall be presented separately
and classified as investing activities.
This Activities shall be Financing Activities:
Cash payments to owners to acquire/redeem equity shares
Cash proceeds from Mortgages
Cash payment by lessee for reduction of o/s liability relating to
finance lease.
Cash flows from change in ownership interest in subsidiary
unless it results in losing control.
IND AS 7 does not have cash flow from Extraordinary items as it
is not allowed by IND AS 1
• An entity shall disclose the components of cash and cash equivalents and shall present a reconciliation of the
amounts in its statement of cash flows with the equivalent items reported in the balance sheet
• An entity shall disclose, together with a commentary by management, the amount of significant cash and cash
equivalent balances held by the entity that are not available for use by the group in its consolidated as well as
separate financial statements
This IND AS uses the term Functional currency
instead of Reporting currency.
Disclosures:

IND AS-8 Accounting Policies,Changes in accounting estimates and errors
Ind AS 8 specifies the criteria for selecting and changing accounting policies, together with the accounting treatment and
disclosure of changes in accounting policies, changes in accounting estimates and corrections of errors.
Accounting Policies are the specific principles, bases, conventions, rules and practices applied by an entity in preparing
and presenting financial statements.
An entity shall change an accounting policy only if the change:
(a) is required by an Ind AS; or
(b) results in the financial statements providing reliable and more relevant
information about the effects of transactions, other events or conditions
on the entity’s financial position, financial performance or cash flows.
A change in accounting policy shall be applied
retrospectively except to the extent that it is
impracticable to determine either the period-
specific effects or the cumulative effect of the
change.
Accordingly, it may be noted that an entity is required to
disclose the impact of Ind AS which has been issued but
is not yet effective.

Accounting estimates and Errors
A change in accounting estimate is an adjustment of the carrying amount of an asset or a liability, or the
amount of the periodic consumption of an asset, that results from the assessment of the present status of, and
expected future benefits and obligations associated with, assets and liabilities.
Prior period errors are omissions from, and misstatements in, the entity’s financial statements for one or more prior periods
arising from a failure to use, or misuse of, reliable information that:
was available when financial statements for those periods were approved for issue; and
could reasonably be expected to have been obtained and taken into account in the preparation and presentation of those
A prior period error shall be corrected by retrospective restatement except to the extent that it is impracticable to
determine either the period-specific effects or the cumulative effect of the error.

Ind AS 10, Events after the Reporting Period
Events after the
reporting period
are those events,
favorable and
unfavorable, that
occur between
the end of the
reporting period
and the date
when the financial
statements are
approved by the
Board of Directors
in
case of a
company, and, by
the corresponding
approving
authority in case
of any other entity
for issue. Two
types of events
can be identified:
Adjusting events
after the reporting
period - those that
provide evidence
of conditions that
existed at the end
of the reporting
period.
Non-adjusting
events after the
reporting - those
that are indicative
of conditions that
arose after the
reporting
The approval
here refers to
Board’s approval
and not the
shareholders
approval
If an entity
declares
dividends to
holders of equity
instruments after
the reporting
period, the entity
shall not
recognize those
dividends as a
liability at the end
of the reporting
period.
It may be noted that the entity shall make disclosures as specified in Ind AS
1, Presentation of Financial Statements, if:
the financial statements are not prepared on a going concern basis; or
the management is aware of material uncertainties related to events or conditions that may cast significant doubt upon the
entity’s ability to continue as a going concern. These events or conditions requiring disclosure may arise after the reporting
period.
If non-adjusting events after the reporting period are material it should be disclosed in financial statement-
unlike AS which requires disclosure in Boards report only

Ind AS 12, Income Taxes
IND AS 12
Deals
with
To prescribe Accounting
treatment for Income Taxes
To Prescribe the accounting
for current and future tax
consequence
Recognition of deferred tax
assets arising from
unused tax losses or unused
tax credits,
Disclosure of information
relating to income taxes.

Difference in Current & Deferred tax
Ind AS 12 is based on balance sheet approach. It
requires recognition of tax consequences of
difference between the carrying amounts of
assets and liabilities and their tax base.
 A deferred tax asset should be recognized for the carry forward of unused tax losses and unused tax credits to the
extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax
credits can be utilized.
 An entity recognises deferred tax assets only when it is probable that taxable profits will be available against which the
deductible temporary differences can be utilized.
 If the Transaction on which DTA/DTL is arosed we should examine whether the transaction is a part of P&L/OCI or
Equity and Recognise the tax effect of that transaction accordingly in P&L,OCI and Equity

Ind AS 16, Property, Plant and Equipment
PPE Can be Defined as: Recognition Criteria
If Spare Parts meets the recognition criteria it will be
recognized otherwise it will be treated as inventory

Subsequent Cost and Measurement After Recognition
Subsequent Cost
Measurement after recognition
If an asset’s carrying amount is increased as a result of a revaluation, the increase shall be recognized in other
comprehensive income and accumulated in equity under the heading of revaluation surplus. However, the increase
shall be recognized in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously
recognized in profit or loss this rule will apply vice versa for loss after recognition

Depreciation, Impairment and Derecognition
To determine whether an item of property, plant and equipment is impaired,
an entity should apply Ind AS 36, Impairment of Assets.
Impairment
Derecognition
on disposal
when no future
economic benefits
are expected from
its use or disposal

Disclosures under IND AS-16
Depreciation methods
used
Useful lives or
depreciation rates
Total depreciation
allocated for the
period
Measurement bases
used for determining
Gross carrying amount
Gross carrying amount
of depreciable assets
and the related
accumulated
depreciation
Reconciliation of
carrying amounts in
the beginning and
end of the period
Additions during the
year

Ind AS 19, Employee Benefits
The Standard requires an entity to recognize:
(a) a liability when an employee has provided service in exchange for employee benefits to be paid in the future; and
(b) an expense when the entity consumes the economic benefit arising from service provided by an employee in
exchange for employee benefits.
Short-term employee benefits are employee benefits (other than termination benefits) that are expected to be settled
wholly before twelve months after the end of the annual reporting period in which the employees render the related
service. Ex-wages, salaries and social security contributions; paid annual leave and paid sick leave, profit-sharing and
bonuses, non-monetary benefits (such as medical care, housing, cars and free or subsidized goods or services) for
current employees
Short-term employee benefits should be recognized as an expense as an when incurred

Post Employment Benefits
Post-employment benefits are employee benefits (other than termination benefits and short-term employee
benefits) that are payable after the completion of employment.
Defined contribution plans are post-employment benefit plans under
which an entity pays fixed contributions into a separate entity (a fund) and
will have no legal or constructive obligation to pay further contributions if
the fund does not hold sufficient assets to pay all employee benefits
relating to employee service in the current and prior periods. Example-
Provident fund,ESIC
Defined benefit plans are post-employment benefit plans other than
defined contribution plans.Example-Gratuity
Actual and investment risk in defined benefit plan is with the
company whereas in defined contribution plan Company is not under
that risk

Recognition of Cost
Defined Benefit Plan-
Determining amounts to be recognized in profit or loss:
i. current service cost.
ii. any past service cost and gain or loss on settlement.
iii. net interest on the net defined benefit liability (asset).
Determining the Re-measurements of the net defined benefit liability
(asset), to be recognized in other comprehensive income, comprising:
i. actuarial gains and losses;
ii. return on plan assets, excluding amounts included in net interest
on the net defined benefit liability (asset); and
iii. any change in the effect of the asset ceiling, excluding amounts
included in net interest on the net defined benefit liability (asset).
Termination benefits are employee benefits provided in
exchange for
the termination of an employee’s employment as a
result of either:
(a) an entity’s decision to terminate an employee’s
employment
before the normal retirement date; or
(b) an employee’s decision to accept an offer of benefits
in
exchange for the termination of employment.
Termination Benefits
If the termination benefits are expected to be settled wholly before twelve months after the end of the annual reporting
period in which the termination benefit is recognised, the entity should apply the requirements for short-term employee
benefits.
If the termination benefits are not expected to be settled wholly before twelve months after the end of the annual reporting
period, the entity should apply the requirements for other long-term employee benefits

Disclosures
Characteristics of defined benefit plans and
the risk associated with it. Identifies and
explains the amount arising from defined
benefit plan in its financial statement
Disclosures may be disaggregated in
geographical location, regulatory
enviroments,reporting segments
Significant actuarial assumptions used in
determining present value of defined
benefit obligation along with the fair value
of the plan asset
For plans other than defined benefit
plan Disclosure is required under INDAS
1 is the amount is material and IND AS 24
for the benefits given to KMPs
Sensitivity analysis for each significant
actuarial assumptions, methods used for
Sensitivity Analysis
Describes how Defined benefit plans may
affect amount, timing and uncertainty of future
cash flows

IND AS 20, Accounting for Government Grants and Disclosure of Government Assistance
Government grants are assistance by government in the form of transfers of resources to an entity in return for past
or future compliance with certain conditions relating to the operating activities of the entity
Government grants, including non-monetary grants at fair value, shall not be recognized until there is reasonable
assurance that:
a) the entity will comply with the conditions attaching to them; and
b) the grants will be received.
Recognition of Government Grant:

Recognition of Government Grant
Grants related to asset:
a) Recognized in profit or loss over the periods matching with depreciation expense on those assets. Alternatively, deduct the value
of grant from the Amount of the asset and charge depreciation on the reduced value.
b) Non monetary government grants recognized at fair value. Alternatively, an entity may measure these grants at nominal value.
Grants Related to Income:
a) Recognized in profit or loss in which the specific expenses are incurred
b) Grants relating to past expenses or losses or for giving immediate financial support with no further cost
should be recognized in profit and loss in the period in which it becomes receivable
Monetary Grants related to Non-Depreciable asset
Should be accounted directly in P&L A/c this IND AS Specifically prohibits recognition of grants to shareholder’s fund. In AS -12 it can be
credited to Capital reserve A/c
Non-Monetary Government grant at Concessional rate
Accounted for fair value or at nominal value.
Practical Example-Import duty waived by the government with the condition to export of 6 years under EPCG scheme is a government grant
that needs to be recognized as income over the period of 6 years

Ind AS 21, The Effects of Changes in Foreign Exchange Rates
The principal issues are which exchange rate(s) to use and how to report the effects of changes in exchange rates in the
Foreign currency monetary
items shall be translated using
the closing rate;
Non-monetary items that are
measured in terms of
historical cost in a foreign
currency shall be translated
using the exchange rate at the
date of the transaction
Non-monetary items that are
measured at fair value in a
foreign currency shall be
translated using the exchange
rates at the date when the fair
value was measured.
At the end of each reporting period:

Foreign Currency transactions
An entity may present its financial statements in any currency (or currencies). If the presentation currency differs from the
entity’s functional currency, it translates its results and financial position into the presentation currency The results and
financial position of an entity whose functional currency is not the currency of a hyperinflationary economy shall be translated
into a different presentation currency using the following procedures:
a) assets and liabilities for each balance sheet presented (i.e. including comparatives) shall be translated at the closing rate
at the date of that balance sheet;
b) income and expenses for each statement of profit and loss presented (i.e. including comparatives) shall be translated at
exchange rates at the dates of the transactions; and
c) all resulting exchange differences shall be recognized in other comprehensive income.
An intragroup monetary asset (or liability), whether short-term or long-term, cannot be eliminated against the corresponding
intragroup liability (or asset) without showing the results of currency fluctuations in the consolidated financial statements.
Amount of Exchange differences recognized in Profit & loss A/c
Net Exchange differences recognized in OCI along with the reconciliation at the beginning and at the end of the
reporting period
Disclosures:

IND AS-23 Borrowing Cost
Borrowing costs are interest and other costs that an entity incurs in connection with the borrowing of funds.
A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or
sale.
Exclusion:
This standard excludes application to the borrowing cost
directly attributable to the inventories that are produced in
large quantities on repetitive basis-Ex wine

Calculation of Borrowing Cost
When substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.
• An asset is normally ready for its intended use or sale when the physical construction of the asset is complete even though
routine administrative work might still continue.

IND AS 24, Related Party Disclosures
This Standard Applies to:
 Intragroup related party transactions and outstanding balances are eliminated, except for those between an investment entity
and its subsidiaries measured at fair value through profit or loss, in the preparation of consolidated financial statements of the
group.
 Related party disclosure requirements as laid down in this Standard do not apply in circumstances where providing such
disclosures would conflict with the reporting entity’s duties of confidentiality as specifically required in terms of a statute or by
any regulator or similar competent authority.-Ex-Banks

Not an Related Party & Disclosures
Disclosures
Disclosures of relationship even though
there were no related party transactions Ex-
Parent-Subsidiary relation.
Disclosures of total compensation to KMPs
like Short term and long term employment
benefits
the amount of the transactions
the amount of outstanding balances,
including commitments their terms and
conditions, including whether they are
secured and the nature of the consideration
to be provided in settlement; and details of
any guarantees given or received.
Provision for doubtful debts .
The Disclosure of amount payable to
/receivable from related party.
Disclosures whether the transaction are at
Arms length price

IND AS 28, Investments in Associates and Joint Ventures
The Standard sets out the requirements for the application of the equity method when accounting for investments in
associates and joint ventures.
An associate is an entity over which the investor has significant influence.(20% or more voting power)
Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not
control or joint control of those policies.
The equity method is a method of accounting whereby the investment is initially recognized at cost and adjusted
thereafter for the post-acquisition change in the investor’s share of the investee’s net assets. The investor’s profit or
loss includes its share of the investee’s profit or loss and the investor’s other comprehensive income includes its
share of the investee’s other comprehensive income.
Distributions received from an investee reduce the carrying amount of the investment.
Ind AS 109, Financial Instruments, does not apply to interests in associates and joint ventures that are accounted for
using the equity method
When an investment in an associate or a joint venture is held by, or is held indirectly through, an entity that is a
venture capital organisation, or a mutual fund, unit trust and similar entities including investment-linked insurance
funds, the entity may elect to measure that investment at fair value through profit or loss in accordance with Ind AS
109.

Ind AS 33, Earnings per share
The objective of this Standard is to prescribe principles for the determination and presentation of earnings per share, so as to improve
performance comparisons between different entities in the same reporting period and between different reporting periods for the same entity.
Due to capitalization, bonus issue or share split if the number of ordinary or potential ordinary shares outstanding increases, or decreases as a
result of a reverse share split, calculation of basic and diluted earnings per share for all periods presented shall be adjusted retrospectively
Ordinary Shares-Known as common stock of the company
Potential Ordinary Shares-Convertible debt/Preference shares, Share Warrants/Options, ESOPs etc.
Dilution-A reduction in EPS due to convertible Shares.
Disclosures:
The amounts used as the numerators in calculating
basic and diluted earnings per share, and a
reconciliation of those amounts to profit or Loss
attributable to the parent entity for the period.
the weighted average number of ordinary shares used
as the denominator in calculating basic and diluted
earnings per share, and a reconciliation of these
denominators to each other
Instruments (including contingently issuable shares)
that could potentially dilute basic earnings per share in
the future, but were not included in the calculation of
diluted earnings per share because they are antidilutive
for the period(s) presented.

IND AS 34, Interim Financial Reporting
Interim financial report means a financial report containing either a complete set of financial statements (as described in Ind
AS 1, Presentation of Financial Statements) or a set of condensed financial statements (as
described in this Standard) for an interim period

Disclosures
List of events and transactions for which disclosures would be required if they are significant:
 The write-down of inventories to net realizable value and the reversal of such a write-down;
 Recognition of a loss from the impairment of financial assets, property, plant and equipment, intangible assets, or other assets,
and the reversal of such an impairment loss;
 Acquisitions and disposals of items of property, plant and equipment;
 Commitments for the purchase of property, plant and equipment;
 Litigation settlements;
 Corrections of prior period errors;
 Any loan default or breach of a loan agreement that has not been remedied on or before the end of the reporting period;
 Related party transactions;
 Changes in contingent liabilities or contingent assets.
Note: The list is not exhaustive
Restating the financial statements of prior interim periods of the current financial year and the comparable interim periods of any prior
financial years that will be restated in the annual financial statements in accordance with Ind AS 8;
The objective of the preceding principle is to ensure that a single accounting policy is applied to a particular class of transactions
throughout an entire financial year

Ind AS 36, Impairment of Assets
The objective of this Standard is to prescribe the procedures that an entity applies to ensure that its assets are carried
at no more than their recoverable amount. It does not applies on Inventories, Non current assets under INDAS
105,DTA, Defined benefit plan for employee benefit, Financial asset as per IND AS 109.
Assessment shall also be done for:
Circumstances in which it is not necessary to calculate both an asset’s fair
value less costs of disposal and its value in use
1. If either of these amounts exceeds the asset’s carrying amount, the asset is not
impaired and it is not necessary to estimate the other amount.
2. When fair value less costs of disposal would not be possible to be measured
due to various reasons, the entity may use the asset’s value in use as its
recoverable amount.
3. In case of an asset held for disposal, the asset’s fair value less costs of disposal
may be used as its recoverable amount.

Reversal of Revaluation & Disclosures
Relevant Disclosure of the amount of impairment in the year or reversal of impairment during the year should be given in the
financial statement.
Reversal of Revaluation:

IND AS 37, Provisions, Contingent Liabilities and Contingent Assets
The objective of this Standard is to ensure that appropriate recognition criteria and measurement bases are applied to
provisions, contingent liabilities and contingent assets and that sufficient information is disclosed in the notes to enable
users to understand their nature, timing and amount.
A provision is a liability of uncertain timing or amount.
Contingent Liability:
A possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of
one or more uncertain future events not wholly within the control of the entity;
Contingent Assets:
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events not wholly within the control of the entity.

Measurements and disclosures
Criteria For measurement
An entity shall not recognize contingent assets or liabilities
Contingent assets-Not recognized but disclosed in Financial
statements when inflow of economic benefits are probable. While
in AS it is only reported in boards report
Considering the time value of money discounting is
permissible in IND AS however not allowed in AS unless it is
Decommissioning, Restoration,Etc

IND AS 38, Intangible Assets
An intangible asset is an identifiable (either being separable or arising from contractual or other legal rights), non-
monetary asset without physical substance.
Intangible Assets Identification

Recognition Criteria
An entity shall choose either the cost model or the revaluation model as its accounting policy. If an intangible asset is
accounted for using the revaluation model, all the other assets in its class shall also be accounted for using the same model,
unless there is no active market for those assets

Subsequent Recognition
Subsequent measurement
It may be either
i. At Cost Model.
Or
ii. At Revaluation Model.
Cost Model
At cost less accumulated amortization less accumulated impairment
loss .
Revaluation Model.
At Fair value
Less accumulated amortization less accumulated impairment loss.
Fair value is determined by referring to active market.
AS-26 Assumes the life of intangible asset as 10 years whereas
IND AS Considers that life could be infinite & in such case no
amortization required
Disclosures:
Useful life is indefinite or finite , If finite mention
the useful life used for amortization
Gross Carrying amount and accumulated
depreciation
Amortization expense as a line item in P&L
Impairment Profit/Loss on the asset
Addition and the amount increase/decrease
due to revaluation
Asset held for sale

Ind AS 40, Investment Property
Investment property is property (land or a building, or part of a building, or both) held (by the owner or by the lessee as a right of use asset)
to earn rentals or for capital appreciation or both, rather than for:
(a) use in the production or supply of goods or services or for administrative purposes; or
(b) sale in the ordinary course of business.(If the property is used for the purpose mentioned in (a) & (b) It will be Owner occupied Property.

Investment Property
An Investment property generates Cash flows independently of the other assets held by the entity and that distinguishes Investment Property from
Owner Occupied Property. IND AS 16 Applies to Owner-occupied Property and IND AS 116 applies to Owner Occupied Property held by the lessee
as a right of use asset. Certain Examples are given in the below table.
Cost of an investment property is its cash price equivalent.
• The difference between this amount and the total payments is recognized as
interest expense over the period of credit

Disclosures
• Its accounting policy for measurement of investment property.
• when classification is difficult, the criteria it uses to distinguish investment property from owner-occupied property and
from property held for sale in the ordinary course of business
• The extent to which the fair value of investment property (as measured or disclosed in the financial statements) is
based on a valuation by an independent valuer the amounts recognized in profit or loss for rental income from
investment Property and direct operating expenses arising from investment property that generated rental income
during the period as well as that did not generate rental income during the period.
• The existence and amounts of restrictions on the realisability of investment property or the remittance of income and
proceeds of disposal.
• contractual obligations to purchase, construct or develop investment property or for repairs, maintenance or
enhancements.
• An entity shall also disclose the depreciation methods used; the useful lives or the depreciation rates used, the gross
carrying amount and the accumulated depreciation (aggregated with accumulated impairment losses) at the beginning
and end of the period and a reconciliation of the carrying amount of investment property at the beginning and end of
the period and the fair value of investment property

Ind as 116-Leases
Lease is a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a
period of time in exchange for consideration.
At inception of a contract, an entity shall assess whether the contract is, or contains, a lease. A contract is,
or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of
time in exchange for consideration
Exemptions from IND AS -116
If the lessee elects to apply the exemption,
lease payments should be recognized as
expense either on SLM basis or any other
systematic basis
In IND AS 116-There is no bifurcation required
fro Operating and financing lease for Lessee

Recognition
A Lessee is required to recognize a Right of Use(ROU) asset representing its right to use the underlying leased
asset and a Lease Liability representing its obligations to make lease payments.
Lease Liability = PV of Lease Rentals + PV of GRV ROU Asset = Lease Liability + Lease Payments (advance) –
Lease incentives (if any) + PV of DROL + PV of IDC
In the statement of profit and loss lessee will have to present interest expense on the lease liability and
depreciation on the right-of-use asset. In the cash flow statement, cash payments for the principal portion of the
lease liability and its related interest are classified within financing activities. Payments for short-term leases,
leases of low-value assets and variable lease payments not included in the measurement of the lease liability
are presented within operating activities.
On transition, lessees can choose between full retrospective application or a simplified approach that
includes certain reliefs and does not require a restatement of comparatives. In addition, as a practical
expedient entities are not required to reassess whether a contract is, or contains, a lease at the date of initial
application (that is, such contracts are ‘grandfathered’).
Transitional Provision

Sub-Lease
SUB LEASE • A ‘Sub-lease’ is defined as a transaction for which an underlying asset is re-leased by a lessee
(‘intermediate lessor’) to a third party, and the lease (‘head lease’) between the head lessor and lessee
remains in effect.

Ind AS 105, Non-current Assets Held for Sale and Discontinued Operations
Hence, two core objectives of the standard is as follows:
Accounting for Assets
held for sale
Lower of carrying value
and Fair Value less Cost
to sell; Depreciation on
such assets to cease
Presented separately in
the Balance Sheet
Presentation and
Disclosure of
Discontinued
Operations
Results to be presented
separately in the
Statement of Profit & Loss
In particular, this IND AS requires in respect of assets that meet
the criteria to be classified as held for sale:
(a) to be measured at the lower of carrying amount and fair value
less costs to sell, and depreciation on such assets to cease;
(b) To be presented separately in the balance sheet; and
(c) The results of discontinued operations to be presented
separately in the statement of profit and loss.
The Assets must be available for immediate sale in its present condition subject only to terms that
are usual and customary for sales of such Assets and its sale must be highly probable. Thus, an
Asset cannot be classified as a non-current asset (or disposal group) held for sale, if the entity
intends to sell it in a distant future. For the sale to be highly probable, the appropriate level of
management must be committed to a plan to sell the Asset, and an active program to locate a
buyer and complete the plan must have been initiated. Further, the Asset must be actively
marketed for sale at a price that is reasonable in relation to its current fair value. In addition, the sale
should be expected to qualify for recognition as a completed sale within one year from the date of
classification and actions required to complete the plan should indicate that it is unlikely that
significant changes to the plan will be made or that the plan will be withdrawn.

Ind AS 107, Financial Instruments: Disclosures
The objective of the Ind AS 107 is to require entities to provide disclosures in their financial statements that enable
users to evaluate:
(a) the significance of financial instruments for the entity’s financial position and performance; and
(b) the nature and extent of risks arising from financial instruments to which the entity is exposed during the period and
at the end of the reporting period, and how the entity manages those risks.
The qualitative disclosures describe management’s objectives, policies and processes for managing those risks.
The quantitative disclosures provide information about the extent to which the entity is exposed to risk, based on
information provided internally to the entity’s key management personnel. Together, these disclosures provide an
overview of the entity’s use of financial instruments and the exposures to risks they create.
Disclosure in BS
The carrying amount Financial Asset measured at FVTPL/Amortized Cost/FVTOCI
The carrying amount Financial Liability measured at FVTPL/Amortized Cost/FVTOCI
Disclosure of Re-Classification(if any) with date and its impact.
The Amount of Financial assets held as pledged along with the T&C
Disclosure in P&L
net gains or net losses on:Financial Assets measured at FVTPL/Amortized Cost/FVTOCI
net gains or net losses on:Financial Liabilty measured at FVTPL/Amortized Cost
investments in equity instruments designated at fair value through other comprehensive income.

Types of Risk-Disclosure
Hedge accounting
How the entity’s hedging activities may affect the amount, timing and uncertainty of its future cash flows. Effect in
P&L,BS and equity.
Foreign Currency Risk
Foreign Currency Risk is the risk that the Fair Value or Future Cash Flows of an exposure will fluctuate because of
changes in foreign currency rates also Sensitivity analysis of 1% change in exchange rate at the end of reporting period
net of hedge
Qualitative disclosures
The exposures to risk and how they arise its objectives, policies and processes for managing the risk and the
methods used to measure the risk
Credit risk disclosures:
Information about an entity’s credit risk management practices and how they relate to the recognition of expected credit
losses, including the methods, assumptions and information used to measure expected credit losses
Liquidity risk disclosures:
The maturity analysis of derivative and Non-Derivative Financial Instruments and how company manages its risk
Market risk disclosures
A sensitivity analysis for each type of market risk to which the entity is exposed at the end of the reporting period

IND AS 108, Operating Segments
Identification of Operating Segments Aggregation Criteria for 2 Operating Segments
An Operating Segment is a component of an entity :
That engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating
to transactions with other components of the same entity);

Threshold and Disclosures
Quantitative Threshold of Operating segment
General Disclosures:
• General information like identification and aggregation
criteria applied for reportable segments
• Types of Products & Services from which each reportable
segments derives its revenue
• Information about P&L Assets & Liabilities
Disclosure about measurement:
 Any difference in accounting policies/assets &
liabilities/changes from prior periods of reportable
segments from entity's reporting
Entity Wide Disclosure:
 Revenue from external Customers
 Revenue from geographical area
 Information about major customers >10%

IND AS-109 Financial Instruments
The objective of IND AS 109 is to establish principles for the financial reporting of financial assets and financial liabilities
that will present relevant and useful information to users of financial statements for their assessment of the amounts, timing
and uncertainty of an entity’s future cash flows:
Fair value of assets Models
If the objective is to collect the contractual cash flow and it gives rise to the cash flow that are solely in the nature of principal and interest O/S Amortized
If the objective is to collect the contractual cash flow &Selling of financial assets and it gives rise to the cash flow that are solely in the nature of principal
and interest O/S FVTOCI
If it does not meet the above criteria FVTPL
Financial Liability is measured at Amortized cost Except for financial liabilities at fair value through profit or loss
A gain or loss on a financial asset or financial liability that is measured at fair value shall be recognized in profit or
loss unless it is part of a hedging relationship or it is an investment in an equity instrument for which option to
present gains and losses in other comprehensive income has been opted or it is a financial liability designated as at
fair value through profit or loss or it is a financial asset measured at fair value through other comprehensive income.

Hedge Accounting
Hedging instruments: A derivative measured at fair value through profit or loss may be designated as a hedging
instrument
A non-derivative financial asset or a non-derivative financial liability measured at fair value through profit or loss may be
designated as a hedging instrument unless it is a financial liability designated as at fair value through profit or loss for which
the amount of its change in fair value that is attributable to changes in the credit risk of that liability is presented in other
comprehensive income
Types of Hedging Relationship-
(a) Fair value hedge: a hedge of the exposure to changes in fair value of a recognized asset or liability or an
unrecognized firm commitment, or a component of any such item, that is attributable to a particular risk and could
affect profit or loss.
(b) Cash flow hedge: a hedge of the exposure to variability in cash flows that is attributable to a particular risk
associated with all, or a component of, a recognized asset or liability or a highly probable forecast transaction, and
could affect profit or loss.
(c) Hedge of a net investment in a foreign operation as defined in IND AS 21

Ind AS 110, Consolidated Financial Statements
Consolidated financial statements are the financial statements of a group in which the assets, liabilities,
equity, income, expenses and cash flows of the parent and its subsidiaries are presented as those of a
single economic entity.
An investor controls an investee if and only if the investor has all the following
Power over an investee –
Exposure, or rights, to variable returns from its involvement with the investee
The ability to use power over the investee to affect the amount of the investor’s returns
Accounting requirements
 combine like items of assets, liabilities, equity, income, expenses and cash flows of the parent with
those of its subsidiaries
 offset (eliminate) the carrying amount of the parent’s investment in each subsidiary and the parent’s
portion of equity of each subsidiary
 eliminate in full intragroup assets and liabilities, equity, income, expenses and cash flows relating to
transactions between entities of the group (profits or losses resulting from intragroup transactions that
are recognised in assets, such as inventory and fixed assets, are eliminated in full).

Treatment in Different cases
Non-controlling interest is the equity in a subsidiary not attributable, directly or indirectly, to a parent
• To the extent NCI relates to present ownership interests that entitle their holders to a proportionate share
of the entity's net assets in liquidation, these are measured at fair value or at their proportionate interest in
the net assets of the acquiree, at the date of acquisition. All other NCI are generally measured at fair value.
A parent shall present non-controlling interests in the consolidated balance sheet within equity, separately
from the equity of the owners of the parent.
Loss of control
If a parent loses control of a subsidiary, the parent should
Derecognize the assets and liabilities of the former subsidiary from the consolidated balance sheet
Recognise the gain or loss associated with the loss of control attributable to the former controlling interest

Ind AS 112, Disclosure of Interests in Other Entities
The objective of this Standard is to require an entity to disclose information that enables users of its financial statements
to evaluate:
(a) the nature of, and risks associated with, its interests in other entities; and
(b) the effects of those interests on its financial position, financial performance and cash flows.
The Standard shall be applied by an entity that has an interest in a subsidiary, a joint arrangement (i.e. joint operation or
joint venture), an associate or an unconsolidated structured entity.
An entity shall disclose:
The significant judgments and assumptions it has made in determining:
(a) the nature of its interest in another entity or arrangement;
(b) the type of joint arrangement in which it has an interest
(c) that it meets the definition of an investment entity, if applicable
Information about its interests in:
(i) Subsidiaries
(ii) Arrangements and associates
(iii) Structured entities that are not controlled by the entity (unconsolidated structured entities)

IND AS113-Fair value Measurements
Ind AS 113 applies when another Ind AS requires or permits fair value measurements or disclosures
about fair value measurements except IND AS 102,116,2,36
Valuation techniques used to measure fair value shall maximize the use of relevant observable inputs
and minimize the use of unobservable inputs.

IND AS 115-Revenue from Contracts with Customers
Identify the contract(s) with a customer

Some Specific Conditions
Incremental costs of obtaining a contract
An entity shall recognize these costs as an asset if the entity expects to recover those costs. Costs to obtain a
contract that would have been incurred regardless of whether the contract was obtained shall be recognised
as an expense when incurred,
Costs to fulfill a contract:
Contract costs recognized as an asset shall be amortized on a systematic basis that is consistent with the
transfer to the customer of the goods or services to which the asset relates

Schedule-III
General instructions for preparation of financial statements of a company required to Comply with IND AS:
Items Required to be presented on the face of BS,P&L
Corresponding Amount of Previous Years
Dues to MSMEs should be disclosed on the face of BS
in addition to the separate table depicting interest liability
Statement of Changes in Equity.
Non Current asset as PPE,Investment Property ,Goodwill,
Other Intangible assets, Investments, Trade Receivables,
Loans, Other Non-Current Assets
Investment in Shares-Quoted or Unquoted is required to be mentioned
OCI Shall be Reclassified as re-measurement of Defined benefit plan
Other Income Shall be Classified as 1-Interest income,2-Dividend Income, 3-other Non-Operating Income
Revenue Should be Classified as 1-Revenue from Sale of Product, 2-Sale of Services,3-Other Operating Revenues

Additional Information
• Separate reporting of Advances to Related parties
• Additional Information: A Company shall disclose by way of notes, additional information regarding aggregate
expenditure and income on the following items:
• Employee Benefits expense (showing separately (i) salaries and wages, (ii) contribution to provident and other funds,
(iii) share based payments to employees, (iv) staff welfare expenses).
• Depreciation and amortization expense;
• Any item of income or expenditure which exceeds one per cent of the revenue from operations or ` 10,00,000,
whichever is higher, in addition to the consideration of 'materiality ‘as specified in clause 7 of the General Instructions for
Preparation of Financial Statements of a Company;
• Interest Income;
• Interest Expense
• Dividend income;
• Net gain or loss on sale of investments;
• Net gain or loss on foreign currency transaction and translation (other than considered as finance cost);
• Payments to the auditor as (a) auditor, (b) for taxation matters, (c) for company law matters, (d) for other services, (e) for
reimbursement of expenses;
• In case of companies covered under section 135, amount of expenditure incurred on corporate social responsibility
activities; and

Summary of IND AS (Indian Accounting Standard)

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