THE NEW AXIS OF FINANCIAL REPORTING - IND AS AND ICDS

THE POWER OF BEING UNDERSTOOD
THE NEW AXIS OF FINANCIAL REPORTING - IND AS AND ICDS
BRINGING EXPERT GLOBAL AND
LOCAL KNOWLEDGE TO YOUR
ENVIRONMENT

RSM in India
 Consistently ranked amongst India s top six accounting and consulting groups
(International Accounting Bulletin, September 2015)
 Nationwide presence through offices in 12 key cities across India
 Multi-disciplinary personnel strength of over 1,200
rsmindia.in
RSM
 Seventh largest global audit, tax and consulting network (with total fee
income of US$ 4.4 bn) and the sixth largest provider of tax services by
revenue globally
 Firms in 120 countries and in each of the top 40 major business centres
throughout the world
 Combined staff of over 37,500 in over 740 offices across the Americas,
Europe, MENA, Africa and Asia Pacific
rsm.global

THE NEW AXIS OF FINANCIAL REPORTING
- IND AS AND ICDS

| The New Axis of Financial Reporting Ind AS and ICDS RSM
About this publication
The publication 'The New Axis of Financial Reporting Ind AS and ICDS' is prepared by
RSM Astute Consulting Pvt. Ltd. (the Indian member of RSM) to provide readers a broad
understanding of applicability of Ind AS and Income Computation and Disclosure
Standards (ICDS) and some key differences with IFRS and Indian Standards. The
publication is general in nature and does not cover all the requirements of Ind AS / (ICDS).
The publication does not focus on other regulatory requirements that an Indian Entity
needs to comply with. The preparation of financial statements complying with Ind AS is
the responsibility of the management of the relevant entity and accordingly this
publication does not replace the need for professional judgment which may be necessary
for application of relevant standards and other disclosure requirements.
Although the publication has been compiled by RSM Astute Consulting Pvt. Ltd., the views
expressed are those of RSM Astute - IFRS Champions.
The copyright in this published work shall belong to and vest in RSM Astute Consulting
Pvt. Ltd. and all rights are reserved. Every effort has been made to ensure the contents
are accurate and current. Information in this publication is no way intended to replace or
supersede specific independent or other professional, legal, tax or accounting advice.
This publication cannot and should not be relied upon for taking actions or decisions
without appropriate professional advice. While all reasonable care has been taken in
preparation of this publication, we accept no responsibility for any liability arising from any
statements or errors contained in this publication.
Happy Reading!

|The New Axis of Financial Reporting Ind AS and ICDSRSM
Table of Contents
Chapter 1 : Introduction 1
Chapter 2 : Applicability of Ind AS 5
Chapter 3 : Ind AS Vs. IFRS Vs. Indian GAAP (AS) 9
3.1 Ind AS Vs. IFRS and Indian GAAP (AS) Listing 10
3.2 Ind AS Vs. IFRS Carve-outs 13
3.3 Ind AS Vs. AS - Key Differences 22
Chapter 4 : Ind AS Vs. ICDS Key Differences 75
4.1 Brief Background of ICDS 76
4.2 Comparison of ICDS and Ind AS 76
4.3 Comparative list of ICDS Vs. corresponding Ind AS 77
4.4 Key differences ICDS Vs. Ind AS 77
Chapter 5 : First Time Adoption of Indian Accounting Standards (Ind AS 101) 96
5.1 Scope of Ind AS 101 97
5.2 Certain Key Aspects 97
5.2.1 Opening Ind AS balance sheet and accounting policies 97
5.2.2 Exceptions to the principles that an entity s opening
Ind AS balance sheet shall fully comply with each
Ind AS effective at the reporting date 98
5.2.3 Exemptions from retrospective application of some
aspects of other Ind AS 99
5.2.4 Exemptions from the requirements of certain Ind ASs 100
5.2.5 Comparative information 101
5.2.6 Explanation for transition to Ind AS 101
5.2.7 Use of fair value as deemed cost 102
5.2.8 Use of deemed cost for investments in subsidiaries,
joint ventures and associates 102
5.2.9 Derecognition of financial assets and financial liabilities 103
5.2.10 Hedge accounting 103
5.2.11 Non-controlling interest 104
5.2.12 Interim financial reports 105
5.2.13 Presentation and disclosures 105
Chapter 6 : Frequently Asked Questions (FAQs) by First Time Adopters of Ind AS 107
6.1 From which date Ind AS will be applicable in India? 108
6.2 Which entities in India need to comply with Ind AS with effect
from 1 April 2016? 108
6.3 If an unlisted company has net worth less than Rs. 250 crores as
at 31 March 2014, can Ind AS become applicable to it in future? 108

Table of Contents
6.4 What is the date of transition to Ind AS? 108
6.5 If the date of transition to Ind AS is 1 April 2015, what GAAP
the Indian company needs to follow for the year 2015-2016? 109
6.6 What are the components of a complete set of Ind AS
financial statements? 109
6.7 What would entity need to do in converting financial
statements as per Indian GAAP to Ind AS financial statements? 109
6.8 Can any entity prepare Ind AS financial statements for
period longer / shorter than one year? If yes, what are the
disclosures required? 110
6.9 Which Ind AS would an entity need to comply with in its first
Ind AS financial statements? 110
6.10 If an entity presents interim financial information for part of
the period covered by its first Ind AS financial statements,
what additional disclosures are required? 111
6.11 What is offsetting? 111
| The New Axis of Financial Reporting Ind AS and ICDS RSM

Terms Definition
AFS Available for sale
AS Accounting Standards notified vide Companies
(Accounting Standards) Rules, 2006
BS Balance Sheet
CFS Consolidated Financial Statements
CGU Cash Generating Unit
EPS Earning Per Share
FASB Financial Accounting Standards Board
FIFO First-In First-Out
GAAP Generally Accepted Accounting Principles
GCA Going Concern Assumption
IAS The International Accounting Standards
IASB The International Accounting Standards Board
ICAI The Institute of Chartered Accountants of India
ICDS Income Computation and Disclosure Standards
IFRIC The International Financial Reporting Interpretations
Committee
IFRS The International Financial Reporting Standards
IND AS Indian Accounting Standards notified vide Companies
(Accounting Standards) Rules, 2015
MCA Ministry of Corporate Affairs
NRV Net Realisable Value
OCI Other Comprehensive Income
P&L Profit and Loss
PPE Property, Plant and Equipment
SFS Separate Financial Statements
SIC Standing Interpretations Committee
SMC Small and Medium-Sized Companies
SME Small and Medium-Sized Entities
WAV Weighted Average Cost
Abbreviations
|The New Axis of Financial Reporting Ind AS and ICDSRSM
Back to Content

1.0 INTRODUCTION
Back to Content

 The financial reporting for Indian companies is set to change completely from
financial year 2016-17 with India moving towards IFRS - the most commonly used
global financial reporting standards. From the financial year 2016-17, companies
whose equity or debt securities are listed or are in the process of listing on any
stock exchange in India or outside India and having net worth of Rs. 500 crores or
more (about US$ 75 million) as well as unlisted companies having net worth of Rs.
500 crores or more (about US$ 75 million) would be required to adopt Ind AS i.e. the
Indian Accounting Standards which have been converged with the IFRS with
certain minimal exceptions. This requirement will also be applicable to the holding,
subsidiary, joint venture or associate companies of companies covered above.
From the financial year 2017-18, companies whose equity or debt securities are
listed or are in the process of listing on any stock exchange in India or outside India
irrespective of net worth and all other companies having net worth of Rs. 250
crores or more (about US$ 38 million) would be required to adopt Ind AS. This is
perhaps the most significant change in respect of financial reporting in the history
of corporate India and will have far reaching implications in terms of assets,
liabilities, income and expenses, disclosures and will also impact tax on book
profits.
 The term International Financial Reporting Standards (IFRSs) includes IFRSs, IASs
and interpretations originated by the IFRIC or its predecessor, the former Standing
Interpretations Committee (SIC). IFRS are increasingly being recognised as Global
Reporting Standards for financial statements. National GAAP is becoming rare. As
global capital markets become increasingly integrated, many countries are moving
to IFRS. More than 130 countries such as European Union, Australia, New Zealand
and Russia currently permit the use of IFRS in their countries.
 IFRSs are accounting standards for reporting financial results and are applicable to
general purpose financial statements and other financial reporting of all profit-
oriented entities. Profit-oriented entities includes those engaged in commercial,
industrial, financial and similar activities, whether organized in corporate or in
other forms also includes mutual insurance companies, other mutual co-operative
entities, etc. developed and approved by IASB (International Accounting Standard
Board).
Chapter 1 Introduction
|The New Axis of Financial Reporting Ind AS and ICDS 2RSM
Back to Content

 IASB is also working with FASB on joint project to align IFRS and US GAAP along
with other projects to improve IFRS requirements. As a result, IFRS have under
gone significant changes in recent past and more changes would be implemented
in future.
 The legal recognition to the Accounting Standards in India was accorded for the
companies in the Companies Act, 1956, by introduction of Section 211(3C) whereby
it is required that the companies shall follow the Accounting Standards notified by
the Central Government. The Accounting Standards were notified by Ministry of
Corporate Affairs (MCA) vide the Companies (Accounting Standards) Rules, 2006
under the Companies Act, 1956. This Rule contained the standards to be applied by
companies for preparation of general purpose financial statements for accounting
periods commencing on or after 7 December 2006.
 In February 2011, MCA had hosted 35 Ind AS (Indian Accounting Standards, which
are converged with IFRS) on its website. However, date for implementation of
these Ind AS by Indian companies was not notified.
 In February 2015, MCA notified the Companies (Indian Accounting Standards)
Rules2015. These rules require select class of companies and their auditors to
comply with the Ind AS in specified manner. Other companies not required to
comply with Ind AS are required to comply with Accounting Standards as specified
in Annexure to the Companies (Accounting Standards) Rules, 2006.
 Sub-section (1) of Section 145 of the Income-tax Act, 1961 ( the Act ) provides that
the income chargeable under the head Profits and gain of business or profession
or Income from other sources shall [subject to the provisions of sub-section (2)]
be computed in accordance with either cash or mercantile system of accounting
regularly employed by the assessee. Sub-section (2) of Section 145 provides that
the Central Government may notify Income Computation and Disclosure
Standards (ICDS) for any class of assessees or for any class of income. 10 ICDS
were notified and are effective from 1 April 2015 and accordingly applicable from
the assessment year 2016-17 onwards.
| The New Axis of Financial Reporting Ind AS and ICDS3 RSM
Back to Content

What is Ind AS?
 Ind AS stands for Indian Accounting Standards as notified by MCA vide Companies
(Indian Accounting Standards) Rules, 2015. These are standards converged with
International Financial Reporting Standards (IFRS).
 Since India has not adopted IFRS as issued by IASB, Ind AS were formulated. In
principle, Ind AS are very much same as IFRS, but with some exceptions
(carveouts).
 Ind AS are not approved by IASB, but are approved / notified by MCA for
implementation by select class of Indian companies.
 It can also be noted that the 39 Ind AS as notified by MCA in February 2015 are not
same as 35 Ind AS published in February 2011.
 The notified Ind AS would be mandatorily applied by select class of companies
from financial year 2016-17, with comparatives for previous year ending 31 March
2016 or thereafter.
 IFRS stands for International Financial Reporting Standards and includes
International Accounting Standards (IAS) until they are replaced by any IFRS and
interpretations originated by the IFRIC or its predecessor, the former Standing
Interpretations Committee (SIC).
Back to Content

2.0 APPLICABILITY OF IND AS
Back to Content

Ind AS are applicable to companies meeting specified criteria as under:
Particulars Phase I (FY 2016-17) Phase II (FY 2017-18)
Covered
companies
Year in which
Ind AS to be
applied
Comparative
figures for
preceding
accounting
period
a) Companies whose equity or debt
securities are listed or are in the
process of listing on any stock
exchange in India or outside India
and having net worth of Rs. 500
crores or more
Accounting period beginning on or
after 1 April 2016
Required for period ending on 31
March 2016 or thereafter
a) Companies whose equity or debt
securities are listed or are in the
process of listing on any stock
exchange in India or outside India
and having net worth less than
Rs. 500 crores
Accounting period beginning on or
after 1 April 2017
Required for period ending on 31
March 2017 or thereafter
b) Companies not covered in (a)
above and having net worth of
Rs. 500 crores or more
b) Companies not covered in (a)
above and having net worth of
Rs. 250 crores or more but less
than Rs. 500 crores
c) Holding, subsidiary, joint venture
or associate companies of
companies covered above
c) Holding, subsidiary, joint venture
or associate companies of
companies covered above
Notes:
1. Ind AS shall be applicable to both, standalone and consolidated financial
statements of the company.
2. Any company may comply with the Ind AS for financial statements for accounting
periods beginning on or after 1 April 2015, with the comparatives for the periods
ending on 31 March 2015 or thereafter. Such company would prepare its financial
statements as per Ind AS consistently.
3. Companies whose securities are listed or are in the process of being listed on SME
exchange without initial public offering need not apply Ind AS.
Chapter 2 Applicability of Ind AS
Back to Content

4. 'Net Worth' means the aggregate value of the paid-up share capital and all
reserves created out of the profits and securities premium account, after
deducting the aggregate value of the accumulated losses, deferred expenditure
and miscellaneous expenditure not written off, as per the audited balance sheet,
but does not include reserves created out of revaluation of assets, write-back of
depreciation and amalgamation.
5. For the purpose of applicability of Ind AS the net worth shall be calculated in
accordance with the standalone financial statements of the company as on 31
March 2014 or the first audited financial statements for accounting period which
ends after that date.
6. Companies which are not in existence as on 31 March 2014 or an existing company
falling under any of the thresholds specified in subsequent year, the net worth
shall be calculated on the basis of first audited financial statements ending after 31
March 2014.
7. Overseas subsidiary, associates, joint venture and other similar entities of an
Indian company may prepare its standalone financial statements in accordance
with the requirements of the specific jurisdiction.
8. Once a company starts following Indian Accounting Standards (Ind AS) either
voluntarily or mandatorily), it shall be required to follow the Indian Accounting
Standards (Ind AS) for all the subsequent financial statements.
9. Once Indian Accounting Standards (Ind AS) are applied voluntarily, it shall be
irrevocable and such companies shall not be required to prepare another set of
financial statements in accordance with Accounting Standards specified in
Annexure to Companies (Accounting Standards) Rules, 2006.
10. Ind AS are intended to be in conformity with the provisions of applicable laws.
However, if due to subsequent amendments in the law, a particular Ind AS is found
not to be inconformity with such law, the provisions of the said law shall prevail and
the financial statements shall be prepared in conformity with such law.
Back to Content

11. Ind AS are intended to apply only to items which are material.
Exemptions: The insurance companies, banking companies and non-banking finance
companies shall not be required to apply Ind AS for preparation of their financial
statements either voluntarily or mandatorily. It is expected that a separate roadmap
would be announced by MCA for implementation of Ind AS by these classes of companies
in near future.
Back to Content

3.0 IND AS VS. IFRS VS. INDIAN GAAP (AS)
Back to Content

3.1 Ind AS Vs. IFRS and Indian GAAP (AS) Listing
As at 30 September 2015, 39 Ind AS corresponding to related IFRS have been
notified. There are 43 IFRS of which 3 standards though issued would be applicable
from future dates. Similarly there are 28 AS that are applicable as on this date.
A comparative listing of accounting standards under Ind AS, IFRS and AS, as at 30
September 2015 is given hereunder:
AS
AS 1 - Disclosure of
Accounting Policies
IFRSInd AS
IAS 1 - Presentation of
Financial Statements
Ind AS 1 - Presentation of
AS 2 - Valuation of
Inventories
IAS 2 - InventoriesInd AS 2 - Inventories
AS 3 - Cash Flow
Statements
IAS 7 - Statements of
Cash Flows
Ind AS 7 - Statement of
Cash Flows
AS 5 - Net Profit or Loss
for the period, Prior period
items and Changes in
Accounting policies
IAS 8 - Accounting
Policies, Changes in
Accounting estimates and
errors
Ind AS 8 - Accounting
policies, Changes in
Accounting estimates and
errors
AS 4 Contingencies and
event occurring after the
balance sheet date
IAS 10 - Events After the
Balance Sheet Date
Ind AS 10 Event after
the reporting period
AS 7 - Construction
Contracts
IAS 11 - Construction
Contracts
(will be superseded by
IFRS 15 Revenue from
Contract with Customers)
AS 22 - Accounting for
Taxes on Income
IAS 12 - Income TaxesInd AS 12 - Income Taxes
AS 10 Accounting for
Fixed Assets
AS 6 - Depreciation
Accounting
IAS 16 - Property, Plant
and Equipment
Ind AS 16 - Property, Plant
and Equipment
AS 19 LeasesIAS 17 - LeasesInd AS 17 - Leases
Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)
AS 9 - Revenue
Recognition
IAS 18 - Revenue
(will be superseded by
Ind AS 115 - Revenue from
Contract with Customers
Back to Content

ASIFRSInd AS
IFRS 15 Revenue from
Contract with Customers)
AS 15 - Employee BenefitsIAS 19 - Employee
Benefits
Ind AS 19 - Employee
Benefits
Government Grants
IAS 20 - Accounting for
Government Grants and
Disclosure of Government
Assistance
Ind AS 20 - Accounting for
Government Grants and
Disclosure of Government
Assistance
AS 11 - The Effects of
Changes in Foreign
Exchange Rates
IAS 21 - The Effect of
Changes in Foreign
Exchange Rates
Ind AS 21 - The Effects of
Changes in Foreign
Exchange Rates
AS 16 - Borrowing CostsIAS 23 - Borrowing CostsInd AS 23 - Borrowing
Costs
AS 18 - Related Party
Disclosures
IAS 24 - Related Party
Disclosures
Ind AS 24 - Related Party
Disclosures
IAS 26 - Accounting and
Reporting by Retirement
Benefit Plans
IAS 27 - Separate Financial
Statements
Ind AS 27 - Separate
Investments in Associates
in Consolidated Financial
Statements
IAS 28 - Investments in
Associates and Joint
Ventures
Ind AS 28 - Investments in
Associates and Joint
Ventures
IAS 29 - Financial
Reporting in
Hyperinflationary
Economies
Ind AS 29 - Financial
Reporting in
Hyperinflationary
Economies
AS 27 - Financial reporting
of Interests in Joint
Ventures
IAS 32 - Financial
Instruments -
Presentation
Instruments -
Presentation
AS 20 - Earnings per
share
IAS 33 - Earnings per
share
Ind AS 33 - Earnings per
share
Back to Content

ASIFRSInd AS
AS 25 - Interim Financial
Reporting
IAS 34 - Interim Financial
Reporting
Ind AS 34 - Interim
Financial Reporting
AS 28 - Impairment of
Assets
IAS 36 - Impairment of
Assets
Ind AS 36 - Impairment of
Assets
AS 29 - Provisions,
Contingent Liabilities and
Contingent Assets
IAS 37 - Provisions,
Contingent Assets
Ind AS 37 - Provisions,
Contingent Assets
AS 26 - Intangible AssetsIAS 38 - Intangible AssetsInd AS 38 - Intangible
Assets
Investments
IAS 39 - Financial
instruments - Recognition
and Measurement
Investments
IAS 40 - Investment
Property
Ind AS 40 - Investment
Property
IAS 41 - AgricultureInd AS 41 - Agriculture
IFRS 1 - First Time
Adoption of International
Financial Reporting
Standards
Ind AS 101 - First Time
Adoption of Indian
Accounting Standards
IFRS 2 - Share based
payment
Ind AS 102 - Share based
payment
Amalgamations
IFRS 3 - Business
combinations
Ind AS 103 - Business
Combinations
IFRS 4 - Insurance
Contracts
Ind AS 104 - Insurance
Contracts
IFRS 5 - Non Current
Assets Held for Sale and
Discontinued Operations
AS 24 Discontinued
Operations
Ind AS 105 - Non Current
Assets Held for Sale and
Discontinued
Operations
IFRS 6 - Exploration for
and evaluation of Mineral
Resources
Ind AS 106 - Exploration
for and evaluation of
Mineral Resources
IFRS 7 - Financial
Instruments - Disclosures
Instruments - Disclosures
AS 17 Segment
Reporting
IFRS 8 - Operating
Segments
Ind AS 108 - Operating
Segments
Back to Content

IFRS 9 - Financial
Instruments (effective
from 1 Jan 2018)
Ind AS 109 Financial
Instruments
AS 21 - Consolidated
IFRS 10 - Consolidated
Financial statements
Ind AS 110 Consolidated
AS 27 - Financial reporting
of Interests in Joint
Ventures
IFRS 11 - Joint
Arrangements
Ind AS 111 Joint
Arrangements
IFRS 12 - Disclosure of
Interests in other entities
Ind AS 112 Disclosure of
Interest in other entities
IFRS 13 - Fair value
measurement
Ind AS 113 Fair value
measurement
IFRS 14 - Regulatory
Deferral Accounts
(effective from 1 Jan 2016)
Ind AS 114 Regulatory
Deferral Accounts
AS 7 - Construction
Contracts
AS 9 - Revenue
Recognition
IFRS 15 - Revenue from
Contracts with Customers
(effective from 1 Jan 2018)
Ind AS 115 Revenue from
Contracts with Customers
Chapter 3
ASIFRSInd AS
Standards that would be
mandatory from a future
datea
Standards that would be
superseded
No corresponding
Standards
3.2 Ind AS Vs. IFRS Carve-outs
India has not adopted IFRS as issued by IASB, instead IFRS converged standards
(Ind AS) were formulated and notified. Though in principle, Ind AS s are similar to
IFRS, certain differences still exist which are popularly called carve-outs. In order to
facilitate easy comparison and understanding, at the end of each Ind AS an
Appendix is given summarizing the differences, if any, between Ind AS and
corresponding IFRS
A brief summary of significant carve-outs (differences between IFRS and Ind AS)
is as follows:
Ind AS Vs. IFRS Vs. Indian GAAP (AS)
Back to Content

IFRSIndASParticulars
BalancesheetIndAS-1
Terminology
used
Statementoffinancialposition(SOFP)
StatementofprofitandlossStatementofprofitorloss(SOPL)andother
comprehensiveincome(SOCI)
ApprovaloffinancialstatementsforissueAuthorizationoffinancialstatementsforissue
TrueandfairviewFairpresentation
IndASrequiresallentitiestouseterminology
forthetitleofthefinancialstatementsasgiven
inthestandard
IAS1givestheoptiontoindividualentitiesto
followdifferentterminologyforthetitleofthe
financialstatements
IndAS1allowsonlysinglestatementapproach
forpresentingstatementofprofitandlossand
othercomprehensiveincome,i.e.components
ofprofitorlossandcomponentsofother
comprehensiveincomeshallbepresentedasa
partofthestatementofprofitandloss.
Presentationof
Financial
Statements
IAS1providesanoptioneithertofollowthe
singlestatementapproachortofollowthetwo
statementapproachi.e.entitymayeither
presentasinglestatementofprofitorlossand
othercomprehensiveincomepresentedintwo
sectionorpresentseparatestatementofprofit
orlosswhichshallimmediatelyprecedethe
statementpresentingcomprehensiveincome,
whichshallbeginwithprofitorloss.
Onlynature-wiseclassificationofexpenseis
allowed.
Expensesclassificationbasedoneithernature
orfunctionisallowed.
Longtermloansneednotbeclassifiedas
currentliabilitiesonaccountofbreachofa
materialprovision,forwhichthelenderhas
agreedtowaivebeforetheapprovaloffinancial
statementsforissue.
UnderIFRS,entitiesneedtoclassifysuchlong
termloanascurrent,evenifthelenderagreed,
afterthereportingperiodandbeforethe
authorisationofthefinancialstatementsfor
issue,nottodemandpaymentasa
consequenceofthebreach.
IndAS7doesnotprovideanoptiontoclassify
theinterestpaidandinterest/dividends
Statementof
CashFlow
IAS7givesanoptiontoclassifytheinterestpaid
andinterest/dividendsreceivedasitemof
Back to Content

receivedasitemofoperatingcashflowsand
requirestheseitemtobeclassifiedasitemof
financingactivityandinvestingactivity
respectively.
operatingcashflows.
IndAS7requiresdividendpaidtobeclassified
asanitemoffinancingactivityonly.
IAS7givesanoptiontoclassifythedividend
paidasanitemofoperatingactivity.
Eventsafterthe
ReportingPeriod
Whenanentitybreachesamaterialprovisionof
along-termloanarrangementonorbeforethe
endofthereportingperiodwiththeeffectthat
theliabilitybecomespayableondemandonthe
reportingdateandifthelender,beforethe
approvalofthefinancialstatementsforissue,
agreestowaivethebreach,itshallbe
consideredasanadjustingevent.
Whenanentitybreachestheprovisionofalong
termloanarrangementonorbeforetheendof
thereportingperiodwiththeeffectthatliability
becomespayableondemand,anagreementby
thelenderafterthereportingperiodandbefore
theauthrorisationofthefinancialstatements
forissue,nottodemandpaymentisnot
consideredasanadjustingevent.
LeasesIndAS17escalationofoperatingleaserentals
thatareinlinewiththeexpectedgeneral
inflation,theincreasesintherentalsshallnotbe
straightline.
IAS17requiresrecognitionofoperatinglease
expenses/incomeonstraightlinebasisunless
anothersystematicbasisismore
representativeofthetimepatternoftheusers
benefit.
Employee
Benefits
IndAS19requirestherateusedtodiscount
post-employmentbenefitobligationstobe
determinedbyreferencetomarketyieldson
governmentbonds.However,subsidiaries,
associates,jointventuresandbranches
domiciledoutsideIndiashalldiscountpost-
employmentbenefitobligationsarisingon
accountofpost-employmentbenefitplans
IAS19rateusedtodiscountpost-employment
benefitobligationsaredeterminedbyreference
tomarketyieldsonthehighqualitycorporate
bonds.Governmentbondsyieldcanbeused
onlywherethereisnodeepmarketofhigh
qualitycorporatebonds.
Back to Content

usingtheratedeterminedbyreferenceto
marketyieldsonhighqualitycorporatebonds.
Government
Grants
IndAS20requiresmeasurementofnon-
monetarygovernmentgrantsonlyattheirfair
value.
IAS20givesanoptiontomeasurenon-
monetarygovernmentgrantseitherattheirfair
valueoratnominalvalue.
IndAS20doesnotpermitdeductionofthe
grantinarrivingatthecarryingamountofthe
asset.Thusgrantsrelatedtoassets,needsto
beaccountedasdeferredincomeonly.
IAS20givesanoptiontopresentthegrants
relatedtoassets,includingnon-monetary
grantsatfairvalueinthebalancesheeteither
bysettingupthegrantasdeferredincomeorby
deductingthegrantinarrivingatthecarrying
amountoftheasset.
Effectsof
Changesin
Foreign
ExchangeRate
Whenthereisachangeinfunctionalcurrency,
IndAS21requiresdisclosureofthatfactandthe
reasonforthechange.AdditionallyIndAS21
requiresdisclosureofthedateofchangein
functionalcurrency.
Whenthereisachangeinfunctionalcurrency,
IAS21requiresdisclosureofthatfactandthe
reasonforthechangeonly.
IndAS21hasbeenamendedtoscopeoutthe
long-termforeigncurrencymonetaryitemsfor
whichanentityhasoptedfortheexemption
giveninIndAS101.
IAS21donotprovideforsuchscopeexclusion
forlong-termforeigncurrencymonetaryitems.
RelatedParty
Disclosures
DisclosurerequirementofIndAS24,donot
applyincircumstanceswhereprovidingsuch
disclosureswouldconflictwiththereporting
entitysdutiesofconfidentialityasspecifically
requiredintermsofastatuteorbyany
regulatororsimilarcompetentauthorityanda
statuteoraregulatororsimilarcompetent
IAS24doesnotprovideforsuchscope
exclusion.
Back to Content

authoritygoverninganentityprohibitsthe
entitytodisclosecertaininformationrequired
bythestandard.
Separate
Financial
Statements
TheCompaniesActmandatespreparationof
separatefinancialstatementsbyeach
company.AccordinglyIndAS27hasremoved
requirementofdisclosingthereasonfor
preparingseparatefinancialstatementsifnot
requiredbylaw.
IAS27requirescertainclassofentitybeinga
Parentorinvestorwithjointcontrolofor
significantinfluenceover,aninvesteeto
disclosethereasonforpreparingseparate
financialstatementsifnotrequiredbylaw
Definitionofclosemembersofthefamilyofa
personasperIFRSisamendedtoinclude
brother,sister,fatherandmother.
Closemembersofthefamilyofapersonare
thosefamilymemberswhomaybeexpectedto
influence,orbeinfluencedby,thatpersonin
theirdealingswiththeentityincluding:
(a)thatindividualsdomesticpartnerand
children,
(b)childrenoftheindividualsdomesticpartner;
and
(c)dependantsoftheindividualorthe
individualsdomesticpartner.
Optiontousetheequitymethodtoaccountfor
investmentinsubsidiary,jointventureand
associatesinseparatefinancialstatementsis
notgiveninIndAS27.
IAS27allowstheentitiestousetheequity
methodtoaccountforinvestmentin
subsidiaries,jointventuresandassociatesin
theirSeparateFinancialStatements(SFS).
Investmentsin
Associatesand
JointVentures
IndAS28requiresuseofuniformaccounting
policies,unless,incaseofanassociate,itis
impracticable.
IAS28requiresaninvestortomakeappropriate
adjustmentstotheassociatesfinancial
statementstoconformthemtotheinvestors
accountingpoliciesforreportinglike
Back to Content

Excessoftheentitysshareofthenetfairvalue
oftheinvesteesidentifiableassetsand
liabilitiesoverthecostoftheinvestmentis
recogniseddirectlyinequityascapitalreserve.
Excessoftheentitysshareofthenetfairvalue
oftheinvesteesidentifiableassetsand
liabilitiesoverthecostoftheinvestmentis
recognisedinprofitorloss.
Financial
Reportingin
Hyperinflation-
aryEconomies
IndAS29requiresanadditionaldisclosure
regardingthedurationofthehyperinflationary
situationexistingintheeconomy.
IAS29doesnotrequiresuchadisclosure.
Financial
Instruments:
Presentation
Asanexceptiontothedefinitionoffinancial
liability,IndAS32considerstheequity
conversionoptionembeddedinaconvertible
bonddenominatedinforeigncurrencyto
acquireafixednumberofentitysownequity
instrumentsasanequityinstrumentifthe
exercisepriceisfixedinanycurrency.
Thisexceptiontothedefinitionoffinancial
liabilityisnotprovidedinIAS32.
Earningsper
Share
IndAS33isapplicabletoallcompaniesthat
haveordinarysharesandarerequiredtoapply
IndAS.
IAS33isapplicabletoentity/groupwitha
parent:
i)Whoseordinarysharesorpotentially
ordinarysharesaretradedinpublicmarket
(adomesticorforeignstockexchangeoran
over-thecountermarket,includinglocal
andregionalmarkets);or
ii)Thatfilesorisintheprocessoffiling,its
financialstatementswithasecurities
commissionorotherregulatory
transactionsandothereventsinsimilar
circumstances.
Back to Content

Intangible
Assets
IndAS38allowsonlyfairvalueforrecognising
theintangibleassetandgrantinaccordance
withIndAS20.
Withregardtotheacquisitionofanintangible
assetbywayofagovernmentgrant,IAS38,
IntangibleAssets,providestheoptiontoan
entitytorecognisebothassetandgrantinitially
atfairvalueoratanominalamountplusany
expenditurethatisdirectlyattributableto
preparingtheassetforitsintendeduse.
IndAS33requiresEPSrelatedinformationtobe
disclosedbothinconsolidatedfinancial
statementsandseparatefinancial
statements.
IAS33providesthatwhenanentitypresents
bothconsolidatedfinancialstatementsand
separatefinancialstatements,itmaygiveEPS
relatedinformationinconsolidatedfinancial
statementsonly.
IndAS33requiresamountofincomeor
expensedebitedorcreditedtosecurities
premiumaccount/otherreserves(whichis
otherwiserequiredtoberecognisedinprofitor
lossinaccordancewithIndAss)tobeadjusted
fromprofitorlossfromcontinuingoperations
forthepurposeofcalculatingbasicEPS.
SuchsituationisnotcoveredunderIAS33.
Theamortizationmethodspecifiedinthe
standarddoesnotapplytoamortizationof
intangibleassetsarisingfromservice
concessionarrangementsinrespectoftoll
roadsrecognisedinthefinancialstatementsof
entitybeforethebeginningofthefirstIndAS
reportingperiodoftheentity.
IAS38doesnotcontainsuchexemption.
organisationforthepurposeofissuing
ordinarysharesinapublicmarket.
Back to Content

Investment
Property
AsperIndAS40Investmentpropertiesare
accountedonlybasedonthecostmodel.Fair
valuemodelisnotpermitted.
IAS40permitsbothcostmodelandfairvalue
model(exceptinsomesituations)for
measurementofinvestmentpropertiesafter
initialrecognition.
IndASalsoprovidescertainoptionalexemption
relatingtothelong-termforeigncurrency
monetaryitemsandserviceconcession
arrangementsrelatingtotollroads.
IFRSdoesnotprovideanyoptionalexemption
relatingtothelong-termforeigncurrency
monetaryitemsandserviceconcession
arrangementsrelatingtotollroads.
First-time
adoption
AsperIndAS101anentitysfirstIndAS
financialstatementsarethefirstannual
financialstatementsinwhichtheentityadopts
IndASs.Thefirst-timeadoptershallaccountfor
theresultingchangeintheretainedearningsas
atthetransitiondateexceptincertainspecific
instanceswhereitrequiresadjustmentin
Capitalreservetotheextentsuchadjustment
amountdoesnotexceedthebalanceavailable
inCapitalreserve.
IFRS1providesvariousexamplesoffirstIFRS
financialstatements.Italsoprovidesexamples
ofinstanceswhenanentitydoesnotapply
IFRS1.Thefirst-timeadoptershallaccountfor
theresultingchangeintheretainedearningsas
atthetransitiondateexceptincertainspecific
instanceswhereitrequiresadjustmentinthe
goodwill.
Business
Combinations
Incaseofbusinesscombinationsofentities
undercommoncontrolIndAS103providesthat
suchbusinesscombinationtransactionsshould
beaccountedforusingthepoolingofinterest
method.
IFRS3excludesfromitsscopebusiness
combinationsofentitiesundercommoncontrol.
IndAS103requiresthebargainpurchasetobe
recognisedinothercomprehensiveincomeand
accumulatedinequityascapitalreserve,unless
thereisnoclearevidencefortheunderlying
IFRS3requiresbargainpurchasegainarisingon
businesscombinationtoberecognizedinprofit
orloss.
Back to Content

reasonforclassificationofthebusiness
combinationasabargainpurchase,inwhich
case,itshallberecogniseddirectlyinequityas
capitalreserve.
Revenuefrom
contractswith
customer
UnderIndAS115,penaltiesshouldbeaccounted
forasperthesubstanceofthecontract.Where
thepenaltyisinherentinthedeterminationof
transactionprice,itshouldformpartofvariable
consideration,otherwisethesameshouldnot
beconsideredfordeterminingtheconsideration
andthetransactionpriceshouldconsideredas
fixed.
IFRS15amountofconsideration,amongother
things,canvarybecauseofpenalties.Assuch
penaltiesarerequiredtobeconsideredin
determinationoftransactionprice.
IndAS115requiresanentitytopresent
separatelytheamountofexcisedutyincluded
intherevenuerecognisedinthestatementof
profitandloss.
IFRS15doesnotrequiresuchdisclosure.
IndAS115requirestopresentreconciliationof
theamountofrevenuerecognisedinthe
statementofprofitandlosswiththecontracted
priceshowingseparatelyeachofthe
adjustmentsmadetothecontractprice
specifyingthenatureandamountofeachsuch
adjustmentseparately.
IFRS15doesnotrequiresuchdisclosure.
Back to Content

3.3IndASVs.AS-KeyDifferences
TheaccountingstandardsasspecifiedintheAnnexuretotheCompanies(IndianAccountingStandards)Rules,
2015arecalledtheIndianAccountingStandards(IndAS).TheAccountingstandardsasspecifiedinAnnexure
totheCompanies(AccountingStandards)Rules,2006arereferredasASinthissection.
AsummaryofkeydifferencesbetweensomeoftheIndASandASisgivenhereunder:
Requirements
asperAS
CategoryTopic
GeneralIndASgenerallydealswith
presentationoffinancial
statements.
IndASRequirements
asperIndAS
IndAS1ScopeAS1dealsonlywith
disclosureofaccounting
policies.
Compliancewith
GAAP
Entitiesshouldmakean
explicitandunreserved
statementinthenotesthat
thefinancialstatements
complywithIndAS.
IndAS1Presentationand
Disclosure
Thereisapresumptionthat
financialstatementsshould
bepreparedincompliance
withAStogiveatrueand
fairview.
Anentitycannotdescribe
financialstatementsas
complyingwithIndAS
unlesstheycomplywithall
therequirementsofeach
applicablestandardand
interpretation.
Non-compliancewithanyof
theapplicableASneedsto
bedisclosedinthefinancial
statements.
Componentsof
Financial
statements
Financialstatements
compriseof
1.Balancesheetasattheend
Disclosure
Therequirementsforthe
financialstatementsareset
outundertheActsuchas
Back to Content

Requirements
asperAS
CategoryTopicIndASRequirements
asperIndAS
oftheperiod
2.Statementofprofitandloss
fortheperiod
3.Statementofchangesin
equityfortheperiod
4.Statementofcashflowfor
theperiod
5.Notescomprisinga
summaryofsignificant
accountingpoliciesand
otherexplanatory
information
6.Comparativeinformationin
respectofthepreceding
period
7.Balancesheetasatthe
beginningofthepreceding
periodwhenanentity
appliesanaccountingpolicy
retrospectivelyormakes
restatementorreclassifies
initsfinancialstatements.
ScheduleIIIofthe
CompaniesAct,2013.
Financialstatementsunder
theCompaniesAct,2013
include:
-Balancesheet
-StatementofProfitand
Loss
-Cashflowstatement(not
mandatoryforOnePerson
Company,SmallCompany
andDormantCompany)
-Accountingpoliciesand
Notestofinancial
statements.
FairpresentationInextremelyrare
circumstancesinwhich
managementconcludes
Disclosure
DeparturesfromASis
permittedifrequiredbylaw.
Back to Content

Requirements
asperAS
asperIndAS
requirementinanIndAS
wouldbesomisleadingthat
itwouldconflictwiththe
objectiveoffinancial
statementssetoutinthe
Framework,theentityshall
departfromthat
requirementiftherelevant
regulatoryframework
requires,orotherwisedoes
notprohibit,sucha
departure.
IndASprescribes
disclosuresincaseanentity
departsfromarequirement
ofIndAS.
CapitalAnentityshalldisclose
informationthatenables
usersofitsfinancial
statementstoevaluatethe
entitysobjectives,policies
andprocessesformanaging
capital.
IndAS1DisclosureASdoesnotrequiresucha
disclosure.
Extra-
ordinaryitems
Anentityshallnotpresent
anyitemsofincomeor
expensesasextraordinary
itemsintheseparateof
IndAS1DisclosureAnentityshoulddisclosein
statementofprofitandloss
anyincomeorexpenses
thatarisefromeventsor
Back to Content

Requirements
asperAS
asperIndAS
ComparativesAnentityshalldisclose
comparativeinformationin
respectofpreviousperiod
forallamountsreportedin
currentperiodsfinancial
statements.
Anentityshallalsoinclude
comparativeinformationfor
narrativeanddescriptive
informationwhenitis
relevanttoan
understandingofthe
IndAS1DisclosureAnentityshalldiscloseone
yearofcomparativesforall
numericalinformationinthe
financialstatements.
transactionsthatareclearly
distinctfromtheordinary
activitiesoftheenterprise
and,therefore,arenot
expectedtorecur
frequentlyorregularlyas
extraordinaryitems.
Thenatureandtheamount
ofeachextraordinaryitem
shouldbeseparately
disclosedintheprofitand
lossaccountinamanner
thatitsimpactoncurrent
profitorlosscanbe
perceived.
profitandlossorinthe
notes.
Back to Content

Requirements
asperAS
asperIndAS
Consistencyof
presentation
criticaljudgementsand
estimatesmadebythe
managementinapplying
accountingpolicies.
disclosure
Nosuchrequirement.
Previousyearsfiguresare
regrouped/reclassifiedto
correspondwiththecurrent
yearsclassification/
disclosure.
estimatesspecificallyrequiressuch
disclosure.
Anentityshallretainthe
presentationand
classificationofitemsinthe
financialstatementsfrom
oneperiodtoanother
unlessthechangeis
requiredbyIndASordueto
changeinnatureofthe
entitysoperationhaving
regardstothecriteriaset
outinIndAS8,another
presentationor
classificationwouldbemore
appropriate.
OffsettingIndAS1GeneralThereisnospecificguidance
availableinASinthis
regards.
Anentityshalloffsetassets
andliabilitiesorincomeand
expensesonlywhenthe
sameisrequiredor
permittedbyIndAS.
Reporting
currencyfor
presentationof
IndAS1and
IndAS21
Presentationand
disclosure
ASdoesnotspecifythe
currencyinwhichan
enterprisepresentsits
Thestandardpermitsan
entitytopresentitsfinancial
statementsinanycurrency
Back to Content

Requirements
asperAS
asperIndAS
(orcurrencies).The
standardalsorequiresan
entitytodetermineits
functionalcurrencyandits
resultsandfinancialposition
inthatcurrency.
financial
statements
However,anenterprise
normallyusesthecurrency
ofthecountryinwhichitis
domiciled.
Thestandardrequires
disclosureofreasonfor
usingothercurrencyand
changeinthe
reportingcurrency.
Ifanentityselectsa
presentation(reporting)
currencywhichisdifferent
fromthefunctional
currency,thestandard
requiresthefinancial
statementtobetranslated
fromfunctionalcurrencyto
presentationcurrency.
Inventoriesofa
serviceprovider
IndAS2ScopeAS2excludesworkin
progressarisinginthe
ordinarycourseofbusiness
ofserviceproviders.
IndAS2includesprovisions
relatingtothework-in-
progressofaservice
provider.Serviceproviders
generallyaccumulatecostin
respectofeachservicefor
whichaseparateselling
pricewillbecharged.
Therefore,eachsuch
serviceistreatedasa
separateitem.
Back to Content

Requirements
asperAS
asperIndAS
Inventoriesof
commodity
broker-traders
IndAS2ScopeNosuchguidanceinAS2.IndAS2doesnotapplyto
themeasurementof
inventoriesheldby
commoditybroker-traders
whomeasuretheir
inventoriesatfairvalueless
costtosell.
Inventories
acquiredon
deferred
settlement
terms
IndAS2ValuationThereisnospecificguidance
underAS2forthe
treatmentofinventories
acquiredondeferred
settlementterms.Assuch
purchasepriceunder
deferredsettlementis
generallyconsideredascost
ofinventoryunlessinterest
isspecifiedinthe
arrangement.
ASprovidesthatInterest
andotherborrowingcosts
areusuallyconsideredas
notrelatingtobringingthe
inventoriestotheirpresent
locationandconditionand
are,therefore,usuallynot
includedinthecostof
inventories.
Whenarrangement
effectivelycontains
financingelementsfor
examplewhereinventoryis
acquiredondeferred
settlementterms,a
differencebetweenthe
purchasepricefornormal
credittermsandthe
amountpaidisrecognised
asinterestexpenseoverthe
periodofthefinancing.
Back to Content

Requirements
asperAS
asperIndAS
InventoriesIndAS2CostformulaAS2doesnotexpressly
mandatedthatsame
costformulashouldbeused
forallinventoriesthathave
asimilarnatureanduseto
theentity.
ASrequiresthattheformula
usedshouldreflectthe
fairestpossible
approximationtothecost
incurredinbringingthe
itemsofinventorytotheir
presentlocationand
condition.
Anentityshallusethesame
costformulaforall
inventoriesthathavea
similarnatureandusetothe
entity.
Cashflow
statements
disclosure
AS3isnotmandatoryfor
SMCs.However,itmaybe
notedthattheCompanies
Act,2013mandates
preparationofcashflow
statementsexceptforOne
PersonCompany,Small
CompanyandDormant
Company.
Cashflowstatementisa
componentofcompleteset
offinancialstatements,itis
mandatoryforallentities
applyingIndAS.
ThereisnostipulationinAS
3forclassificationofbank
overdrafts.
Bankborrowingsare
normallypartoffinancing
activities.Nonetheless,
bankoverdraftsthatare
Back to Content

Requirements
asperAS
asperIndAS
repayableondemandand
thatformanintegralpartof
anentityscash
managementareincludedin
cashequivalents.
Thecashflowsassociated
withextraordinaryitems
shouldbeclassifiedas
arisingfromoperating,
investingorfinancing
activitiesasappropriateand
separatelydisclosed.
UnderIndAS,anentityshall
notpresentextra-ordinary
items,hencedisclosureof
thesameincashflow
statementisprohibited.
NoguidanceinAS.Cashreceiptsfromrents
andsubsequentsalesof
suchassetsarealsocash
flowsfromoperating
activities.
Changein
accounting
policy
IndAS8Recognitionand
Measurement
ASpermitchangein
accountingpolicyifrequired
bystatute.
IndASdoesnotprovidefor
changeinaccountingpolicy
becauseofrequirementof
statute.
Theimpactofchangeinan
accountingpolicy
voluntarilyorotherwiseis
tobeadjustedagainst
currentperiodsprofitand
Achangeinaccounting
policyvoluntarilyorincase
whereIndASdoesnot
includespecifictransitional
provisionsshallbeapplied
Back to Content

Requirements
asperAS
asperIndAS
retrospectivelyexceptto
thecumulativeeffectofthe
change.
lossaccount.Wherethe
effectofsuchchangeisnot
ascertainable,whollyorin
part,thefactshouldbe
indicated.
Comparativeinformationto
berestatedandtheamount
oftheadjustmentsrelating
topriorperiodsisadjusted
againsttheopeningbalance
ofeachaffectedcomponent
ofequityoftheearliest
periodpresentedandother
comparativeamounts
disclosedforeachprior
periodasifthenew
accountingpolicyhad
alwaysbeenapplied.
Priorperiod
items
(Correctionof
errors)
IndAS8ScopeThedefinitionofpriorperiod
itemsisrestrictedtoincome
andexpenseswhicharisein
currentperiodasaresultof
errorsandomissioninthe
preparationsoffinancial
statementsofprior
period(s).
Thedefinitionofpriorperiod
itemsismuchbroaderas
comparedtoAS5.Prior
perioderrorscoversallthe
itemsinthefinancial
statementsincludingassets
andliabilities.
Back to Content

Requirements
asperAS
asperIndAS
Thereportingrequirements
aresimilartochangesin
accountingpolicy.
Allprior-periodadjustments
aredisclosedseparatelyin
currentyearprofitandloss
accountinamannerthatits
impactontheresultscanbe
perceived.
Disclosureof
non-application
ofnewIndASs
IndAS8DisclosureNosuchdisclosuresrequired
underAS.
IndAS8requireswhenan
entityhasnotappliednew
IndASsthathasbeen
issuedbutisnotyet
effectiveshalldisclose:
thisfact;and
knownorreasonably
estimableinformation
relevanttoassessingthe
possibleimpactthat
applicationofnewIndAS
willhaveontheentitys
financialstatementsin
theperiodofinitial
application.
Contingencies
andEvents
OccurringAfter
theBalance
SheetDate
Measurement
AsperAS4dividend
proposedordeclaredafter
thebalancesheetdatebut
beforeapprovaloffinancial
statementarerequiredtobe
adjusted(i.eaccounted).
Dividenddeclaredafterthe
reportingperiod,theentity
shallnotrecognisethose
dividendsasaliabilityasthe
endofthereportingperiod.
Back to Content

Requirements
asperAS
asperIndAS
Contingencies
andEvents
OccurringAfter
theBalance
SheetDate
IndAS10DisclosureAS4requiresdisclosurein
thereportoftheapproving
authority,forexample,the
boardreportforthose
eventsoccurringafterthe
balancesheetdatethat
representmaterialchanges
andcommitmentsaffecting
thefinancialpositionofthe
entity.
Anentityshalldisclosefor
eachmaterialcategoryof
non-adjustingeventafter
thereportingperiod,nature
ofeventandestimateofits
financialeffect,ora
statementthatsuchan
estimatecannotbemade.
Nosuchdisclosurerequired
byAS.
Anentityshalldisclosethe
datewhenthefinancial
statementswereapproved
forissueandwhogavethat
approval.Iftheentitys
ownersorothershavethe
powertoamendthe
financialstatementsafter
issue,theentityshall
disclosethatfact.
IncomeTaxesIndAS12RecognitionUnderAS22,deferredtaxis
recognisedforallthetiming
differences.Timing
differencesarethe
differencesbetweentaxable
incomeandaccounting
incomeforaperiodthat
UnderIndAS,deferredtaxis
recognisedforalltaxable
temporarydifferences.
Temporarydifferencesare
differencesbetweenthe
carryingamountofanasset
orliabilityinthebalance
Back to Content

Requirements
asperAS
asperIndAS
originateinoneperiodand
arecapableofreversalin
oneormoresubsequent
periods.
sheetanditstaxbase.
IncomeTaxesIndAS12Recognition-
revaluation
Onrevaluationof
depreciableassetsinbooks,
thedifferenceistreatedas
permanentdifferenceand
nodeferredtaxis
recognised.
Deferredtaxiscreatedon
differencebetweenthe
carryingvalueandtaxbase.
IncomeTaxesIndAS12RecognitionUnderAS-22nosuch
specificexceptionsare
provided.
Deferredtaxisnot
recognisedforthefollowing:
Deferredtaxliability
arisesfromtheinitial
recognitionofgoodwillor
Deferredtaxassetor
liabilityarisesfromthe
initialrecognitionof
anassetorliabilityina
transactionwhich:
i)isnotabusiness
combination;and
ii)atthetimeofthe
transaction,affects
neitheraccounting
Back to Content

Requirements
asperAS
asperIndAS
profitnortaxableprofit
(taxloss).
IncomeTaxesIndAS12Recognitionof
deferredtax
assetsincaseof
taxlosses
Deferredtaxassetsshould
berecognisedandcarried
forwardonlytotheextent
thatthereisareasonable
certaintythatsufficient
futuretaxableincomewill
beavailableagainstwhich
suchdeferredtaxassets
canberealized.
Adeferredtaxassetshallbe
recognisedforthecarry
forwardofunusedtax
lossesandunusedtax
creditstotheextentthatit
isprobablethatfuture
taxableprofitwillbe
availableagainstwhichthe
unusedtaxlossesand
unusedtaxcreditscanbe
utilized.
Whereanenterprisehas
unabsorbeddepreciationor
carryforwardoflosses
undertaxlaws,deferredtax
assetsshouldberecognised
onlytotheextentthatthere
isvirtualcertainty
supportedbyconvincing
evidencethatsufficient
futuretaxableincomewill
beavailableagainst
whichsuchdeferredtax
assetscanberealized.
Back to Content

Requirements
asperAS
asperIndAS
IncomeTaxesIndAS12Recognition-
consolidation
Deferredtaxexpense
/incomeisaggregatedfrom
separatefinancial
statementsoftheGroup
entityandnoadjustments
aremadeonconsolidation.
Anentityshallrecognisea
deferredtaxliabilityforall
taxabletemporary
differencesassociatedwith
investmentsinsubsidiaries,
branchesandassociates,
andinterestsinjoint
arrangements,excepttothe
extentthatbothofthe
followingconditionsare
satisfied:
(a)theparent,investor,
jointventurerorjoint
operatorisableto
controlthetimingof
thereversalofthe
temporarydifference;
and
(b)itisprobablethatthe
temporarydifference
willnotreverseinthe
foreseeablefuture.
Nodeferredtaxis
recognisedoneliminationof
intra-grouptransactions.
Deferredtaxshouldbe
calculatedontemporary
differencesthatarisefrom
theeliminationofprofits
Back to Content

Requirements
asperAS
asperIndAS
andlossesresultingfrom
intragrouptransactions.
IncomeTaxesIndAS12DisclosuresASdoesnotmandatesuch
disclosures.
IndASrequiresdisclosureof
reconciliationbetweenthe
averageeffectivetaxrate
andtheapplicabletaxrate,
potentialincometax
consequencesthatwould
resultfromthepaymentof
dividendstoits
shareholders,etc.
Accountingfor
PPEPurchase
cost
IndAS16ValuationSimilartoIndASexceptno
guidanceisgivenfor
capitalizationofdismantling
andsiterestorationcost.
However,theGuidancenote
onAccountingforOiland
GasProducingActivities
statesthatentitiesinvolved
inthoseshouldcapitalize
thedismantlingandsite
restorationcost.
PurchasecostofPPE
includes:
1.purchaseprice(lessany
discountsandrebates);
2.importduties,non-
refundabletaxes;
3.anydirectlyattributable
costsofbringingthe
assettoitsworking
condition;and
4.theinitialestimateofthe
costsofdismantlingand
removingtheitemand
restoringthesiteon
whichitislocated.
Back to Content

Requirements
asperAS
asperIndAS
Revaluationof
PPE
IndAS16Valuationand
measurement
AsperAS10fixedassets
arecarriedatcostless
accumulateddepreciation.
IndAS16requiredanentity
tochooseeithercostmodel
orrevaluationmodelasits
accountingpolicyandshall
applythatpolicytoanentire
classofPPE.
Thereisnorequirementto
performrevaluationsat
regularintervals.
Whenentityapplies
revaluationmodelitrequires
regularrevaluationsofall
PPE(say3to5years).In
caseofitemofPPE
experiencesignificantand
volatilechangesinfairvalue,
annualrevaluationmaybe
necessary.Management
mustconsiderateachyear
endwhetherfairvalueis
materiallydifferentfrom
carryingvalue.
Whenrevaluationdoesnot
coversallassetsofthe
givenclass,itisappropriate
thattheselectionofthe
assettoberevaluedbe
madeonsystematicbasis,
e.g.anentitymayrevaluea
classofassetswithinone
IfanitemofPPEisrevalued,
theentireclassofPPEto
whichthatassetbelongs
shallberevalued.
Back to Content

Requirements
asperAS
asperIndAS
unitandignoreassetsof
thesameclassatanother
unit.AssuchunderAS
entireclassofPPEisnot
requiredtoberevalued.
Revaluationof
PPE
IndAS16Valuationand
measurement
Costofmajor
repair/inspection
Costofrepairischargedto
profitandloss.
Suchcostsarerequiredto
becapitalisedifsatisfythe
recognitioncriterialaid
downintheIndAS.
However,carryingamount
ofsimilarcostcapitalised
earlierneedstobe
derecognised.
Residualvalue
andusefullifeof
anasset
IndAS16MeasurementUnderAS,periodicreviewof
residualvalueandusefullife
ofanassetnotspecifically
required.
Anentityneedstoreview
residualvalueandusefullife
ofanassetatleastateach
financialyearend.
Depreciation
Accounting
Changein
methodof
Depreciation
Measurement
Themethodofdepreciation
isappliedconsistentlyto
providecomparabilityofthe
resultsoftheoperationsof
theenterprisefromperiod
toperiod.
Depreciationmethod
appliedshallbereviewedat
leastateachfinancialyear
end.
Changeindepreciation
methodistreatedaschange
inaccountingpoliciesand
Changeinmethodof
depreciationistreatedas
changeinaccounting
Back to Content

Requirements
asperAS
asperIndAS
impactisdeterminedby
retrospectivelycomputing
depreciationundernew
methodandtheimpactis
recordedintheperiodof
change.
LeasesIndAS17ScopeAS19excludeslease
agreementtouselands
fromitsscope.
IndAS17doesnotexclude
leaseagreementtouse
landsfromitsscope.
estimates,reflectedinthe
depreciationchargeforthe
currentandprospective
years.
Leaseholdpremiumis
capitalizedasfixedassets
andamortisedoverthe
periodofthelease.
Leaseoflandwouldbe
treatedasperclassification
oftheleaseinaccordance
withtheIndAS(i.e
operatingorfinance).
Leases-Initial
directcost
IndAS17MeasurementAS19requiresinitialdirect
costi.e.commissionand
legalfeesincurredbylessor
withrespecttofinance
leasetobeeithercharged
offatthetimeofincurrence
ortobeamortisedoverthe
leaseperiod.
Initialdirectcostsincurred
specificallytoearnrevenues
fromanoperatingleaseare
deferredandallocatedto
IndAS17prescribesinitial
directcostincurredby
lessortobeincludedinlease
receivableamountincaseof
financeleaseandinthe
carryingamountofthe
assetincaseofoperating
leaserecognisedasan
expenseoverthelease
termonthesamebasisas
theleaseincome.
Back to Content

Requirements
asperAS
asperIndAS
incomeovertheleaseterm
inproportiontothe
recognitionofrentincome,
orarerecognisedasan
expenseinthestatementof
profitandlossintheperiod
inwhichtheyareincurred.
Saleand
leaseback
IndAS17RecognitionSaleandleasebackwhich
resultsinafinancelease,
AS19requiresexcess/
deficiencybothtobe
deferredandamortised
overtheleasetermin
proportiontothe
depreciationoftheleased
asset.
Ifsaleandleaseback
transactionresultsina
financelease,anyexcessof
salesproceedsoverthe
carryingamountshallnot
beimmediatelyrecognised
asincomebyaseller-
lessee.Instead,itshallbe
deferredandamortised
overtheleaseterm.
LeaseoflandIndAS17RecognitionAS19excludesleaseofland
fromitsscope.
Leasesoflandareclassified
asoperatingorfinance
leasesinthesamewayas
leasesofotherassets.
However,acharacteristicof
landisthatitnormallyhas
anindefiniteeconomiclife
and,iftitleisnotexpected
topasstothelesseebythe
endoftheleaseterm,the
Back to Content

Requirements
asperAS
asperIndAS
LeasesIndAS17DisclosureAS19requiresdisclosurefor
accountingpolicyrelating
theretointhefinancial
statementsofthelessor.
IndAS17doesnotmandate
anyaccountingpolicy
relateddisclosure.
lesseenormallydoesnot
receivesubstantiallyallof
therisksandrewards
incidentaltoownership,in
whichcasetheleaseofland
willbeanoperatinglease.
Employee
benefits
Actuarialgains
orlosses
IndAS19RecognitionActuarialgainsorlosses
shouldberecognised
immediatelyintheprofitand
lossaccountunderAS15.
Actuarialgainsorlossesto
berecognisedimmediately
inOtherComprehensive
IncomeasperIndAS19.
BorrowingcostsIndAS23ScopeThereisnosuchexclusion
underAS16.
Anentityisnotrequiredto
applyIndAS23to
borrowingcostsdirectly
attributabletothe
acquisition,constructionor
productionofaqualifying
asset,measuredatfair
value.
BorrowingcostsIndAS23DefinitionASdefinitionissimilartoInd
ASexceptsubstantial
periodoftimehasbeen
Qualifyingassetsarethose
thatrequireasubstantial
periodoftimetogetready
Back to Content

Requirements
asperAS
asperIndAS
BorrowingcostsIndAS23DisclosureNosuchdisclosurerequired
underAS16.
Thedisclosurerequirements
ofIndAS23requirethe
entitytodiscloseseparately
thecapitalizationrateused
todeterminetheamountof
borrowingcosts.
fortheirintendeduseor
sale.
interpretedtogenerally
meanmorethan12months.
Relatedparty
disclosure
IndAS24DefinitionAS18coversonlyrelatives
ofKeymanagement
personnel.
UnderIndAS24,Related
partycoversclose
membersoffamilyofany
individualreferredtoas
follows:
Keymanagement
personnelor
Apartywhoexercise
controlorsignificant
influence
AS18doesnotincludepost
employmentbenefitplanas
relatedparty.
IndAS24includespost
employmentbenefitplanfor
thebenefitofemployeesof
theentityorofanyentity
thatisrelatedpartytothe
reportingentity.
Back to Content

Requirements
asperAS
asperIndAS
Relatedparty
disclosure
IndAS24DefinitionsUnderAS18Controlis
definedas:
Ownership,directlyor
indirectly,ofmorethanone
halfofthevotingpowerof
theenterprises,or
Controlofthecomposition
ofboardofdirectorsinthe
caseofacompanyorofthe
compositionof
correspondinggoverning
bodyincaseofanyother
enterprises,or
Asubstantialinterestin
votingpowerandthepower
todirect,bystatuteor
agreement,thefinancial
and/oroperatingpoliciesof
theenterprises.
IndAS24doesnotdefine
thetermControl.Ituses
thatthetermasdefinedin
IndAS110.Controlis
investorscurrentabilityto
directtherelevantactivity
oftheinvesteeandhaving
righttovariablereturns
fromitsinvolvementand
abilitytouseitspowerto
affectthosereturns.
Relatedparty
disclosureKey
management
personnel
IndAS24DefinitionAnon-executivedirectorof
acompanyisnotconsidered
asakeymanagement
personunderAS18unless
hehastheauthorityand
responsibilityforplanning,
directingandcontrollingthe
Keymanagementpersonnel
arethosepersonshaving
authorityandresponsibility
forplanning,directingand
controllingtheactivitiesof
theentity,directlyor
indirectly,includingany
Back to Content

Requirements
asperAS
asperIndAS
IndAS24activitiesofthereporting
enterprises.
director(whetherexecutive
orotherwise)ofthatentity.
Relatedparty
disclosure
IndAS24DisclosureThereisnosuchdisclosure
requirementunderAS18.
IndAS24requiresdisclosure
oftermsandconditionsof
outstandingitems
pertainingtorelatedparties.
Relatedparty
disclosure
material
transactions
IndAS24DisclosureAsperAS18ordinarilya
relatedpartytransaction
theamountofwhichisin
excessof10%ofthetotal
relatedpartytransactions
ofthesametypeis
consideredmaterial.
Itemsofasimilarnature
maybedisclosedin
aggregate,butIndASdoes
notpermitclubbingon
materialrelatedparty
transactionwithan
individualpartyinthe
aggregatedisclosure.IndAS
24alsodoesnotprovide
guidancesimilartoAS18on
whatisconsideredtobe
materialtransaction.
Investmentin
Associates-
Significant
influence
IndAS28DefinitionSimilartoIndAS.UnderAS
23significantinfluenceis
thepowertoparticipatein
thefinancialand/or
operatingpolicydecisionsof
theinvesteebutnotcontrol
overthosepolicies.The
wordorisnotthereinInd
Significantinfluenceisthe
powertoparticipateinthe
financialandoperating
policydecisionsofthe
investeebutisnotcontrolor
jointcontroloverthose
policies.Ifaninvestorholds,
directlyorindirectly(e.g.
Back to Content

Requirements
asperAS
asperIndAS
AS28.ThereforeunderInd
AS28thepowerto
participateshouldexistfor
bothfinancialandoperating
policies;whereasunder
AS23,eitheronewould
sufficetodetermine
significantinfluence.
throughsubsidiaries),20
percentormoreofthe
votingpowerofthe
investee,itispresumedthat
theinvestorhassignificant
influence,unlessitcanbe
clearlydemonstratedthat
thisisnotthecase.
AsperAS,potentialvoting
rightsarenotconsideredfor
determiningsignificant
influence.
Theexistenceandeffectof
potentialvotingrightsthat
arecurrentlyexercisableor
convertible,including
potentialvotingrightsheld
byotherentities,are
consideredwhenassessing
whetheranentityhas
significantinfluence.
Investmentin
Associates-
Displayof
goodwill
disclosure
Goodwillorcapitalreserves
arisingontheacquisitionof
associatesshouldbe
includedinthecarrying
amountoftheinvestment,
butshouldbedisclosed
separately.
Goodwillonacquisitionis
includedinthecarryingcost
oftheinvestmentsandis
notrequiredtobedisclosed
separately.However,capital
reservesonacquisitionare
directlyrecognisedinequity
ascapitalreserve.
Back to Content

Requirements
asperAS
asperIndAS
Financial
instruments
presentation
IndAS32ClassificationNocorrespondingstandards
notifiedunderthe
CompaniesAct,2013.AS30,
31and32onthetopic
issuedbyICAIarenot
mandatory.
Thesubstanceofafinancial
instrument,ratherthanits
legalform,governsits
classificationintheentitys
balancesheet.Substance
andlegalformare
commonlyconsistent,but
notalways.
Preferencesharesare
classifiedasequity.
Indeterminingwhethera
preferenceshareisa
financialliabilityoranequity
instrument,anissuer
assessestheparticular
rightsattachingtotheshare
todeterminewhetherit
exhibitsthefundamental
characteristicofafinancial
liability.
Similarlydividendon
preferencesharesisalways
treatedasappropriationof
profit/reserves.
Dividendonpreference
shareclassifiedasliability
wouldbeclassifiedas
interestexpense.
Financial
instruments
presentation
IndAS32Classification
convertible
instruments
Convertiblepreference
sharesareclassifiedas
equityandconvertibleloans
/debenturesareclassified
IndASrequiressplittingof
convertibleinstrumentsas
equityandliabilitybasedon
optionsandcontractual
Back to Content

Requirements
asperAS
asperIndAS
asliability.termsoftheinstruments,
subjecttoexceptionincase
offoreigncurrencybonds.
Earningper
share
Disclosure
AS20doesnotspecifically
mandatesuchdisclosure.
AsperIndAS33anentity
thatreportsadiscontinued
operationshalldisclosethe
basicanddilutedEPSfor
discontinuedoperations
eitherinthestatementof
profitandlossorinthe
notes.
Earningper
share
IndAS33Disclosure-
mandatorily
convertible
instrument
Notspecificallycoveredin
AS.
AsperIndAS,toconsider
sharestobeissuedupon
conversionincalculationof
EPS.
Interimfinancial
reporting/
Impairmentof
assets
IndAS34&
36
Impairmentof
goodwill
AS25doesnotprovideany
guidanceinthisregards.
HoweverAS28an
impairmentlossrecognised
forgoodwillshouldnotbe
reversedinasubsequent
periodunless:
(a)theimpairmentloss
wascausedbya
specificexternalevent
ofanexceptional
naturethatisnot
Anentityisrequiredto
assessgoodwillfor
impairmentattheendof
eachreportingperiod,and,if
required,torecognisean
impairmentlossatthatdate
inaccordancewithIndAS
36.Anentityshallnot
reverseanimpairmentloss
recognisedinaprevious
interimperiodinrespectof
goodwill.
Back to Content

Requirements
asperAS
asperIndAS
expectedtorecur;and
(b)subsequentexternal
eventshaveoccurred
thatreversetheeffect
ofthatevent.
Impairmentof
assets
IndAS36GoodwillASrequiresanenterpriseto
assessateachbalance
sheetdatewhetherthereis
anyindicationthatanasset
maybeimpaired.Ifanysuch
indicationexists,the
enterpriseshouldestimate
therecoverableamountof
theasset.
IndASrequiresgoodwill
acquiredinabusiness
combinationtobetestedfor
impairmentannually.
Provisions,
Contingent
Liabilitiesand
Contingent
Assets
IndAS37Recognition-
Provisions
Provisionsarebasedonthe
bestestimate.Nodetailed
guidanceisavailable.
Theamountrecognisedas
provisionshouldbethebest
estimateoftheexpenditure
requiredtosettlethe
presentobligationatthe
balancesheetdate,detailed
guidanceisavailableon
measurement.
Theamountofprovision
shouldnotbediscountedto
itspresentvalue.
Wheretheeffectoftime
valueofmoneyismaterial,
theamountofprovision
shouldbethepresentvalue
Back to Content

Requirements
asperAS
asperIndAS
Provisions,
Contingent
Liabilitiesand
Contingent
Assets-
Provisions
IndAS37RecognitionRestructuringprovision
shouldbemadeonlegal
obligation.
Restructuringprovision
shouldbemadeon
constructiveobligation.
oftheexpenditures
expectedtoberequiredto
settletheobligation.The
discountratesshouldnot
reflectrisksforwhichfuture
cashflowestimateshave
beenadjusted.
Provisions,
Contingent
Liabilitiesand
Contingent
Assets
IndAS37Disclosure-
Contingentassets
Acontingentassetisnot
disclosedinfinancial
statements.
Acontingentassetis
disclosedinfinancial
statementswhereaninflow
ofeconomicbenefitsis
probable.
Intangible
Assets-
Subsequent
measure-ment
IndAS38MeasurementAfterinitialrecognition,an
intangibleassetshouldbe
carriedatitscostlessany
accumulatedamortisation
andanyaccumulated
impairmentlosses.
Anentityshallchoose
eitherthecostmodelorthe
revaluationmodelasits
accountingpolicy.
Ifanintangibleassetis
accountedforusingthe
Back to Content

Requirements
asperAS
asperIndAS
revaluationmodel,allthe
otherassetsinitsclassshall
alsobeaccountedforusing
thesamemodel,unless
thereisnoactivemarketfor
thoseassets.
Revaluationisprohibited.Revaluationmodelis
permittedonlywherethere
isanactivemarketforthe
underlyingintangibles.
Intangible
Assets-Useful
life
IndAS38MeasurementThereisarebuttable
presumptionthattheuseful
lifeofanintangibleassetwill
notexceedtenyearsfrom
thedatewhentheassetis
availableforuse.
Anentityshallassess
whethertheusefullifeofan
intangibleassetisfiniteor
indefiniteand,iffinite,the
lengthof,ornumberof
productionorsimilarunits
thatwouldconstituteuseful
life.
Amortisationof
intangibleassets
IndAS38MeasurementAmortisationisbasedon
allocationofdepreciable
amountonasystematic
basisdoneoverbest
estimateofusefullifebut
shouldnotexceed10years,
unlessthereispersuasive
evidenceforamortising
Thedepreciableamountof
anintangibleassetwitha
finiteusefullifeshallbe
allocatedonasystematic
basisoveritsusefullife.
Intangibleassetwith
indefiniteusefullifeisnot
amortisedbutisrequiredto
Back to Content

Requirements
asperAS
asperIndAS
Impairmentof
intangibleassets
IndAS38MeasurementInadditiontothe
requirementsofAS-28,an
enterpriseshouldestimate
therecoverableamountof
thefollowingintangible
assetsatleastateach
financialyearendevenif
thereisnoindicationthat
theassetisimpaired:
1.anintangibleassetthat
isnotyetavailablefor
use;and
2.anintangibleassetthat
isamortisedovera
periodexceedingten
yearsfromthedate
whentheassetis
availableforuse.
Anintangibleassetwithan
indefiniteusefullifeand
whichisnotyetavailablefor
useshouldbetestedfor
impairmentannuallyand
wheneverthereisan
indicationthattheintangible
assetmaybeimpaired.
overalongerperiod.Both
finitelifeandindefinitelife
intangiblesarerequiredto
beamortised.
betestedforimpairment.
Accountingfor
Investment-
Investment
Property
IndAS40ScopeAninvestmentpropertyis
aninvestmentinlandor
buildingsthatarenot
intendedtobeoccupied
substantiallyforuseby,or
Investmentpropertyis
property(landora
buildingorpartofa
buildingorboth)held(by
theownerorbythelessee
Back to Content

Requirements
asperAS
asperIndAS
Accountingfor
Investment-
Investment
Property
IndAS40MeasurementAnenterpriseholding
investmentproperties
shouldaccountforthemas
longterminvestments.
Long-terminvestmentsare
valuedatcostless
diminutioninvalue
whereverthedeclineis
otherthanatemporary
decline.
Aninvestmentproperty
shallbemeasuredinitiallyat
itscost.Transactioncosts
shallbeincludedintheinitial
measurement.
Forsubsequent
measurementanentity
shallmeasureallofits
investmentpropertiesin
accordancewithcostmodel
asperIndAS16exceptfor
investmentpropertiesthat
meetthecriteriatobe
classifiedasheldforsale,
whichshallbemeasuredat
intheoperationsof,the
investingenterprise.
underafinancelease)to
earnrentalsorforcapital
appreciationorboth,rather
thanfor:
i)useintheproductionor
supplyofgoodsor
servicesorfor
administrativepurposes;
or
ii)saleintheordinarycourse
ofbusiness.
Back to Content

Requirements
asperAS
asperIndAS
BiologicalassetsIndAS41MeasurementNoguidanceavailableunder
AS.
Abiologicalassetshouldbe
measuredoninitial
recognitionandateach
balancesheetdateatitsfair
valuelessestimatedcosts
tosell.
thelowerofitscarrying
amountandfairvalueless
coststosell.
Firsttime
adoption
IndAS101Scope
Applicability
ASdoesnotprovide
guidanceonfirsttime
adoptionofthestandards
byanentity.
IndAS101specificallydeals
withhowtoapplyIndASs
forthefirsttime.
Subjecttorequirementset
outintheStandard,full
retrospectiveapplicationof
IndASseffectiveatthe
reportingdateforan
entitysfirstIndASfinancial
statementsisrequired.The
standardsalsoprovidefor
certainoptionalexemptions
andmandatory
exceptions.
Anentityshallexplainhow
thetransitionfromprevious
GAAPtoIndASsaffectedits
Back to Content

Requirements
asperAS
asperIndAS
Business
combination
IndAS103ScopeASdoesnotprovide
guidanceforalltypeof
businesscombinations.AS
14dealswithaccountingfor
amalgamations.
IndASappliestoa
transactionorotherevent
thatmeetsthedefinitionof
abusinesscombination.
reportedbalancesheet,
financialperformanceand
cashflow.
Business
combination
IndAS103Methodof
accounting
ASprovidestwomethodsof
accountingfor
amalgamations.Poolingof
interestmethodsincaseof
amalgamationinnatureof
mergerandinothercases
purchasemethod.
IndASprovidesbusiness
combinationsinvolving
entitiesorbusinessesunder
commoncontrolshallbe
accountedforusingthe
poolingofinterestmethod.
Allotherbusiness
combinationsareaccounted
usingpurchasemethod.
Business
combination
IndAS103Methodof
accounting
Goodwillarisingon
amalgamationrepresentsa
paymentmadein
anticipationoffuture
incomeanditisappropriate
totreatitasanassettobe
amortisedtoincomeona
systematicbasisoverits
usefullifenotexceeding5
years.
AsperIndASgoodwillisnot
amortised,butistestedfor
impairmentannuallyor
morefrequentlyifeventor
circumstanceindicate
impairment.
Back to Content

Requirements
asperAS
asperIndAS
Business
combination
measurement
ASdoesnotprovideany
specificguidance.
Acquisition-relatedcosts
arecoststheacquirerincurs
toeffectabusiness
combination.Thosecosts
includefindersfees;
advisory,legal,accounting,
valuationandother
professionalorconsulting
fees;generaladministrative
costs,includingthecostsof
maintaininganinternal
acquisitionsdepartment;
andcostsofregisteringand
issuingdebtandequity
securities.Theacquirershall
accountfor
acquisition-relatedcostsas
expensesintheperiodsin
whichthecostsareincurred
andtheservicesare
received,withone
exception.Thecoststo
issuedebtorequity
securitiesshallbe
recognisedinaccordance
withIndAS32andIndAS
109.
Back to Content

Requirements
asperAS
asperIndAS
Business
combination
IndAS103,
IndAS38
ValuationIfanintangibleassetis
acquiredinanamalgamation
inthenatureofpurchase,
thesameshouldbe
accountedatcostorfair
valueifthecost/fairvalue
canbereliablymeasured.If
thesameisnotreliably
measurableitisincludedas
apartofgoodwill.Intangible
assetsacquiredinan
amalgamationinthenature
ofmerger,oracquisitionof
asubsidiaryisrecorded
atbookvalues.
InaccordancewithIndAS
103BusinessCombinations,
ifanintangibleassetis
acquiredinabusiness
combination,thecostof
thatintangibleassetisits
fairvalueattheacquisition
date.
Intangibleassetacquiredin
anamalgamationinthe
natureofpurchaseis
recordedevenifthat
intangibleassethadnot
beenrecognisedinthe
financialstatementsofthe
transferorhowever,incase
ofamalgamationinthe
natureofmergerifthe
intangibleassetwasnot
recognisedbytheacquiree,
Theintangibleisrecordedby
theacquirerirrespectiveof
whethertheassethadbeen
recognisedbytheacquiree
beforethebusiness
combination.
Back to Content

Requirements
asperAS
asperIndAS
theacquirerwouldnotbe
abletorecordthesame.
Financial
instruments-
disclosures
IndAS107DisclosuresASdoesnotrequiresimilar
disclosure.Disclosure
requirementsspecifiedin
theActareneedtobemade
inthefinancialstatements.
IndASmandate
disclosuresbyclassof
financialinstrument,
offsettingoffinancial
assetsandfinancial
liabilities,analysisofthe
gainorlossrecognised
relatingtofinancialassets
carriedatamortisedcost,
itsriskmanagement
strategy,certainqualitative
andquantitative
information.
Operating
Reporting
IndAS108ScopeAS17isnotapplicableto
SMCs.
IndAS108isapplicableto
companiestowhichIndAS
notifiedunderthe
CompaniesActapply.
Segment
Reporting
Changein
accounting
policies
disclosure
Changesinaccounting
policiesadoptedfor
segmentreportingthat
haveamaterialeffecton
segmentinformationshould
bedisclosed.Such
disclosureshouldincludea
Ifanentitychangesthe
structureofitsinternal
organisationinamanner
thatcausesthe
compositionofits
reportablesegmentsto
change,thecorresponding
Back to Content

Requirements
asperAS
asperIndAS
descriptionofthenatureof
thechange,andthefinancial
effectofthechangeifitis
reasonablydeterminable.
Norestatementrequiredfor
priorperiodfigures.
informationforearlier
periods,includinginterim
periods,shallberestated
unlesstheinformationisnot
availableandthecostto
developitwouldbe
excessive.
guidance.
Twoormoreoperating
segmentsmaybe
aggregatedintoasingle
operatingsegmentif
aggregationisconsistent
withthecoreprincipleof
thisIndAS.
Financial
instruments
IndAS109GeneralASdoesnotprovide
guidanceonthesubject.
AS13dealwithaccounting
forinvestmentsinthe
financialstatementsof
enterprisesandrelated
disclosurerequirements.
IndASestablishesprinciples
forthefinancialreportingof
financialassetsandfinancial
liabilitiesthatwillpresent
relevantanduseful
informationtousersof
financialstatementsfor
theirassessmentofthe
amounts,timingand
uncertaintyofanentitys
futurecashflows.
Back to Content

Requirements
asperAS
asperIndAS
Financial
instruments
measurement
ASinvestmentareinitially
recordedatcost.
Subsequentlycurrent
investmentarecarriedat
lowerofcostandfairvalue
andlongterminvestments
arecarriedatcostless
provisionfordiminutionin
valuewhichisotherthan
temporary.
Anentityshallrecognisea
financialassetorafinancial
liabilityinitsbalancesheet
when,andonlywhen,the
entitybecomespartytothe
contractualprovisionsof
theinstrument.
Financialinstrumentare
initiallymeasuredatfair
value.
Consolidated
Financial
Statements
IndAS110ScopeASdoesnotmandate
preparationofconsolidated
Howeverifanentity
preparesconsolidated
financialstatementsit
needstocomplywithAS21.
UnderIndAS,anentity
needstoprepare
consolidatedfinancial
statementsunlessitmeets
theexemptioncriteria.
IndAS110requiresanentity
(theparent)thatcontrols
oneormoreotherentities
(subsidiaries)topresent
statementsunlessitmeets
theexemptioncriteria
prescribedundertheIndAS.
Consolidated
Financial
Statements
IndAS110PrincipleUnderASitispossiblethat
anentityhasmorethanone
parentwhichwould
UnderIndAS,anentitycan
haveonlyoneparent,which
wouldconsolidatetheentity
Back to Content

Requirements
asperAS
asperIndAS
consolidatetheentityin
theirrespective
statements.
initsconsolidatedfinancial
statements.
Consolidated
Financial
Statements-
Minorityinterest
Disclosure
Minorityinterestsare
presentedseparatelyfrom
liabilitiesandequity.
Non-controllinginterestsin
theconsolidatedbalance
sheetarepresentedasa
componentofequity,
separatelyfromtheequity
oftheownersoftheparent.
Amountattributableto
minorityinterestare
presentedasadeduction
fromnetincomeorlossin
statementofprofitandloss.
Theportionofincome
statementattributableto
non-controllinginterestand
totheparentisseparately
disclosedonthefaceofthe
incomestatementas
allocationsofincome
statementfortheperiod.
Consolidated
Financial
Statements
Lossof
subsidiary
IndAS110RecognitionThelossesexceedingthe
minorityinterestinthe
equityofthesubsidiary
havetobeadjustedagainst
themajorityinterest,
excepttotheextentthat
theminorityhasabinding
obligationto,andareableto
IndAS110,lossesincurred
bythesubsidiaryhavetobe
allocatedbetweenthe
parentandnon-controlling
interests,evenifthis
resultsindeficitbalanceof
non-controllinginterest.
Back to Content

Requirements
asperAS
asperIndAS
makegoodthelosses.Ifthe
subsidiarysubsequently
reportsprofits,allsuch
profitsareallocatedtothe
majorityinterestuntilthe
minoritysshareoflosses
previouslyabsorbedbythe
majorityhasbeen
recovered.
Consolidated
Financial
Statements-
Reportingperiod
IndAS110,28ScopeIndASrequirementsare
similartoAS.However,
underIndASdifference
betweenthereportingdate
ofthesubsidiary/jointly
controlledentity/
associatesmadefor
significanttransactionand
eventstothosefinancial
statementsofsubsidiaries/
associates/JVdrawnupto
differentreportingdateto
thedateoftheparents
financialstatements.Inany
case,thedifference
betweenreportingdates
shouldnotbemorethan6
months.Further,thelength
IndASrequirementsare
similartoAS.However,
underIndASdifference
betweenthereportingdate
ofthesubsidiary/jointly
controlledentity/
associateswhichis
consolidatedandthatofthe
parentshallnotbemore
than3months.
Back to Content

Requirements
asperAS
asperIndAS
ofthereportingperiodsand
anydifferenceinthe
reportingdatesshouldbe
thesamefromperiodto
period.
Itmayalsobenotedthat,in
caseofassociates,ASdoes
notspecificallylaydown
conditionthatthedifference
inreportingdatesshouldnot
exceed6months.
Consolidated
Financial
Statements-
Uniform
accounting
policies
IndAS110,28Measurementand
disclosure
ConsolidatedFinancial
Statements(CFS)shouldbe
preparedusinguniform
accountingpoliciesforlike
transactionsandother
eventsinsimilar
circumstances.
Compliancewithuniform
accountingpoliciesis
mandatory,unlessincaseof
associatesitis
impracticabletodoso.
Ifitisnotpracticabletouse
uniformaccountingpolicies
inpreparingtheCFS,that
factshouldbedisclosed
togetherwiththe
proportionsoftheitemsin
theCFStowhichthe
differentaccountingpolicies
Ifamemberofthegroup
usesaccountingpolicies
otherthanthoseadoptedin
theconsolidatedfinancial
statementsforlike
transactionsandeventsin
similarcircumstances,
appropriateadjustmentsare
Back to Content

Requirements
asperAS
asperIndAS
havebeenapplied.
Thoughuniformaccounting
policiesarenotmandatory,
itisimportanttonotethat
thosepolicies,nevertheless,
havetobeincompliance
withAS.
Joint
venture
IndAS111Measurement&
recognition
Inseparatefinancial
statementsofaventure,
interestinjointlycontrolled
entitiesshouldbe
accountedasperAS13
Accountingfor
Investment.
Inseparatefinancial
statementoftheparent
entityinvestmentinjoint
ventureshallaccountfor
investmentsatcostorin
accordancewithIndAS109.
madetothatgroup
membersfinancial
statementsinpreparingthe
statementstoensure
conformitywiththegroups
accountingpolicies.
Inconsolidatedfinancial
statements,aventure
reportsitsinterestinjointly
controlledentityusing
proportionateconsolidation
methodunlessitmeetthe
exceptioncriteria,inwhich
caseitshallaccount
investmentinaccordance
withAS13Accountingfor
Investments.
Inconsolidatedfinancial
statementsaventurershall
accountsfortheinvestment
injointventureusingthe
equitymethod,unlessthe
entityisexemptfrom
applyingequitymethodin
accordancewiththeIndAS.
Back to Content

Requirements
asperAS
asperIndAS
Fairvalue
measurement
IndAS113Scope,application
anddisclosures
specificguidance.
IndAS113applieswhen
anotherIndASrequiresor
permitsfairvalue
measurementsor
disclosuresaboutfairvalue
measurements(and
measurements,suchasfair
valuelesscoststosell,
basedonfairvalueor
disclosuresabout
thosemeasurements),
exceptasspecifiedinthe
IndAS.
Fairvalueisthepricethat
wouldbereceivedtosellan
assetorpaidtotransfera
liabilityinanorderly
transactionbetween
marketparticipantsatthe
measurementdate.
Toincreaseconsistencyand
comparabilityinfairvalue
measurementsandrelated
disclosures,thisIndAS
establishesafairvalue
hierarchythatcategorises
intothreelevels.
Back to Content

Requirements
asperAS
asperIndAS
Thefairvaluehierarchy
givesthehighestpriorityto
quotedpricesinactive
marketforidenticalassets
orliabilities(level1inputs)
andlowestpriorityto
unobservableinputs(level3
inputs).
IndASprescribesvarious
disclosureonthebasisof
fairvaluemeasurementand
classificationasperfair
valuehierarchy.
Revenuefrom
contractswith
customer
IndAS115ScopeAS9dealswithrecognition
ofrevenuearisinginthe
courseoftheordinary
activitiesoftheenterprise
from:
1.saleofgoods
2.renderingofservices
3.interest,royaltiesand
dividends
IndAS115applytoall
contractswithcustomers,
exceptlease,insurance,
financialinstruments,barter
transactionbetween
entitiesinsamelineof
businesstofacilitatesales
tocustomersorpotential
customers.
AS7dealswithaccounting
treatmentofrevenueand
costsassociatedwith
constructioncontracts.
Acontractisanagreement
betweentwoormore
partiesthatcreates
enforceablerightsand
obligations.
Back to Content

Requirements
asperAS
asperIndAS
Revenuefrom
contractswith
customer
IndAS115RecognitionRevenuerecognitionis
mainlyconcernedwiththe
timingofrecognitionof
revenueinthestatementof
profitandlossofan
enterprise.
Revenueisrecognised
whenthesellerhas
transferredtothebuyer
propertyingoodsorall
significantrisksandrewards
ofownershipandretainsno
effectivecontrolofthe
goodsassociatedwith
ownership;andno
significantuncertainty
existsregardingthe
consideration.
Revenuefromservice
transactionsasperAS9is
usuallyrecognisedasthe
serviceisperformed,either
bytheproportionate
completionmethodorby
thecompletedservice
contractmethod.
IndASlaydown5step
processforrecognitionof
revenue:
Step1-Identifythe
contractwithacustomer
Step2Identifythe
performanceobligations
inthecontract
Step3
Determinethetransaction
price
Step4Allocatethe
transactionpricetothe
performanceobligationin
thecontract
Step5
recognizetherevenue
when(oras)theentity
satisfiesaperformance
obligation.
Anentityshallrecognise
revenuewhen(oras)the
entitysatisfiesa
performanceobligationby
transferringa
promisedgoodorserviceto
Back to Content

Requirements
asperAS
asperIndAS
acustomer.Thetransfer
takesplacewhencustomer
obtainscontrolofthat
asset.
Whenacontractdoesnot
meetthecriteriaspecified
intheIndAS,and
considerationisreceived
fromcustomer,theentity
shallrecognised
considerationreceivedas
revenuewheneitherofthe
followingeventhas
occurred:
1.Theentityhasno
remainingobligationand
allorsubstantiallyall,of
theconsideration
hasbeenreceivedandis
non-refundable;or
2.Thecontracthasbeen
terminatedandthe
considerationreceived
fromthecustomeris
non-refundable.
Back to Content

Requirements
asperAS
asperIndAS
Revenuefrom
contractswith
customer
IndAS115Recognition
unilateralright
Thereisnospecificguidance
availableunderAS.
UnderIndAS,acontract
doesnotexistifeachparty
tothecontracthasthe
unilateralenforceableright
toterminateawholly
unperformedcontract
withoutcompensatingthe
otherparty(orparties).
Considerationreceived
wouldbeaccountedas
revenuebasedusingcriteria
specifiedinIndAS.
Revenuefrom
contractswith
customer
IndAS115Recognition
contract
combination/
modification
AS9issilentonthematter.
However,AS7provides
guidanceoncombiningand
segmentingconstruction
contracts.
Contractcombination
happenswhenentityneeds
toaccountfortwoormore
contractasfor1contract
andnotseparatelyasper
IndAS.
Acontractmodificationisa
changeinthescopeorprice
(orboth)ofacontractthat
isapprovedbythepartiesto
thecontract.IndAsrequires
contractmodificationtobe
accountedasseparate
contractiffollowingtwo
Back to Content

Requirements
asperAS
asperIndAS
conditionsaresatisfied:
1.Scopeofcontract
increasesduetoaddition
ofgoodsorservicesthat
aredistinct;and
2.Increaseinconsideration
reflectsthatstand-alone
sellingpricesofadditional
goodsorservices.
Revenuefrom
contractswith
customer
IndAS115Recognition-
Multipleelement
arrangements
Thereisnospecificguidance
availableunderAS.
IndAS115requires
identificationofeach
performanceobligation
separately.
Therecognitioncriteria
cannotbeappliedtotwoor
moreobligationtogetherif
followingtwocriteriaare
met:
1.Goodsorserviceis
capableofbeingdistinct;
and
2.Thepromisetotransfer
thegoodorservice
isseparatelyidentifiable
fromotherpromises
inthecontract
Back to Content

Requirements
asperAS
asperIndAS
Thetransactionpriceis
allocatedtoeach
performanceobligationon
thebasisoftheirrelative
stand-alonesellingprice,
subjecttoIndAScriteriafor
allocationofdiscountsand
variableconsideration.
Revenuefrom
contractswith
customer
IndAS115Measurement
transactionprice
ASrequiresthatrevenueis
measurableandthatatthe
timeofsaleortherendering
oftheserviceitwouldnot
beunreasonabletoexpect
ultimatecollection.Where
theultimatecollection
cannotbereasonably
ascertained,revenue
recognitionispostponed.
Thetransactionpriceisthe
amountofconsiderationto
whichanentityexpectsto
beentitledinexchangefor
transferringpromisedgoods
orservicestoacustomer,
excludingamountscollected
onbehalfofthirdparties
(forexample,somesales
taxes).
Theconsiderationpromised
inacontractwitha
customermayincludefixed
amounts,variableamounts,
orboth.
Non-cashconsiderationis
measuredatfairvalue.Iffair
valuecannotbereasonably
Back to Content

Requirements
asperAS
asperIndAS
estimatedtheconsideration
ismeasuredwithreference
tostand-alonesellingprice
tothecustomerorclassof
customer.
Revenuefrom
contractswith
customer
IndAS115Recognition
contractcost
AS7,Contractcostsinclude
thecostsattributabletoa
contractfortheperiodfrom
thedateofsecuringthe
contracttothefinal
completionofthecontract.
However,coststhatrelate
directlytoacontractand
whichareincurredin
securingthecontractare
alsoincludedaspartofthe
contractcostsiftheycanbe
separatelyidentifiedand
measuredreliablyanditis
probablethatthecontract
willbeobtained.
Anentityshallrecogniseas
anassettheincremental
costsofobtainingacontract
withacustomeriftheentity
expectstorecoverthose
costs.Theincremental
costsofobtaininga
contractarethosecosts
thatanentityincursto
obtainacontractwitha
customerthatitwouldnot
haveincurredifthecontract
hadnotbeenobtained(for
example,asales
commission).
Whencostsincurredin
securingacontractare
recognisedasanexpensein
theperiodinwhichtheyare
incurred,theyarenot
Coststoobtainacontract
thatwouldhavebeen
incurredregardlessof
whetherthecontractwas
obtainedshallberecognised
Back to Content

Requirements
asperAS
asperIndAS
asanexpensewhen
incurred,unlessthosecosts
areexplicitlychargeableto
thecustomerregardlessof
whetherthecontractis
obtained.
includedincontractcosts
whenthecontractis
obtainedinasubsequent
period.
Revenuefrom
contractswith
customer
measurement
service
concession
arrangements
Nospecificguidanceunder
AS.
IndASprovidesdetailed
guidanceonrecognitionand
classification
dependingonthetermsof
thearrangements.The
arrangementisaccounted
asfinancialassetoran
intangibleasset.
Ifthearrangementgives
contractualrighttoreceive
cashoranotherfinancial
asset,thecontractor
(entity)shallrecognizea
financialasset.
Ifthearrangementsgives
right(licence)tocharge
usersofthepublicservice,
thecontractor(entity)shall
recognizeanintangible
asset.
Back to Content

Requirements
asperAS
asperIndAS
Wherethereturnsarepartly
informoffinancialassets
andpartlyintangible,each
componentisaccounted
separately.
Back to Content

4.0 IND AS VS. ICDS KEY DIFFERENCES
Back to Content

4.1 Brief Background of ICDS
 Section 145(1) of the Income-tax Act, 1961 ( the IT Act ) provides that the
income chargeable under the heads 'Profits and gains of business or
profession' or 'Income from other sources' be computed in accordance
with either cash or mercantile system of accounting regularly employed by
the assessee. Section 145(2) of the IT Act provides that the Central
Government may notify Income Computation and Disclosure Standards
(ICDS) for any class of assessees or for any class of income.
1
 On this background, the Central Government notified 10 ICDS vide
Notification No. 32 of 2015 dated 31st March, 2015.
4.2 Comparison of ICDS and Ind AS
Chapter 4 Ind AS Vs. ICDS Key Differences
ICDS Ind AS
To minimise alternatives,
reduce litigation and provide
certainty while computing
income under the IT Act
To converge with global
reporting standards in an
integrated global markets
Objective
FY 2015-16
FY 2016-17 with comparative
figures for FY 2015-16
Applicable
from
All persons following
mercantile system of
accounting
Specified companies
Applicable
To
Computation of Income under
Business and Profession and
Other Sources and not for the
purpose of maintenance of
books of accounts
Preparation and Presentation
of financial statements
Applicable
For
1. Certain provisions of ICDS may be further clarified by the CBDT as the expert
committee is at present examining the issues based on the suggestion by the
stakeholders - Press release dated 26 November 2015.
|The New Axis of Financial Reporting IND AS and ICDS 76RSM
Back to Content

Chapter 4 Ind AS Vs. ICDS Key Differences
ICDS Ind AS
No. Particulars
4.3 A comparative list of ICDS Vs. corresponding Ind AS is as under:
No. Particulars
I
II
III
IV
V
VI
VII
VIII
IX
X
Disclosure of Accounting Policies
Valuation of Inventories
Construction Contract
Revenue Recognition
Tangible Fixed Assets
The effects of changes in foreign
exchange rates
Government Grants
Securities
Borrowing Costs
Provisions, Contingent Liabilities
and Contingent Assets
1
8
2
115
115
109
16
21
20
109
23
37
Presentation of Financial
Statements
Accounting Policies, Changes in
Accounting Estimates and Errors
Inventories
Revenue from Contracts
Revenue from Contracts
Financial Instruments
Property, Plant and Equipment
The Effects of Changes in Foreign
Exchange Rates
Accounting for Government
Grants and Disclosure of
Government Assistance
Financial instruments
(Ind AS 32 and Ind AS 107 for
presentation and disclosure )
Borrowing Costs
Provisions, Contingent Liabilities
and Contingent Assets
4.4 Key differences ICDS Vs. Ind AS
As per ICDS
Ares of
Differences
As per Ind AS
Scope Deals with disclosure of
accounting policies only.
Deals with presentation of
financial statements and is
much wider in scope.
ICDS I Vs. Ind AS 1 / Ind AS 8
Deviation Deviation from ICDS-I allowed
only if
Deviation from requirement of
an Ind AS allowed if
| The New Axis of Financial Reporting IND AS and ICDS77 RSM
Back to Content

THE NEW AXIS OF FINANCIAL REPORTING - IND AS AND ICDS

THE NEW AXIS OF FINANCIAL REPORTING - IND AS AND ICDS

Recommended

Recommended

More Related Content

What's hot

What's hot (19)

Viewers also liked

Viewers also liked (14)

Similar to THE NEW AXIS OF FINANCIAL REPORTING - IND AS AND ICDS

Similar to THE NEW AXIS OF FINANCIAL REPORTING - IND AS AND ICDS (20)

More from RSM India

More from RSM India (17)

Recently uploaded

Recently uploaded (20)

THE NEW AXIS OF FINANCIAL REPORTING - IND AS AND ICDS