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Indian Accounting Standards (Ind AS) are standard protocols adopted by the Indian companies mentioned under Section 133 of the Companies Act of 2013 with the aim of aligning Indian accounting standards with international ones. Implementation of Indian accounting standards in an appropriate manner is necessary for improving credibility and for making better financial decisions. This article deals with the implementation of Indian accounting standards (Ind AS) and everything related to it.
Accounting standards standardize the entire accounting procedure of the economy. They are developed to harmonize and align Indian accounting standards with international accounting standards and reporting. All Indian companies follow the same accounting standards for reporting to avoid any inconsistencies and mishaps. Accounting standards govern the manner and provide a pre-defined specific protocol for how the preparation and presentation of financial statements.
There are many core objectives for introducing Indian accounting standards. These core objectives are given below:-
The implementation of accounting standards is crucial for several reasons. These reasons are given below:-
These are some of the importance of Ind AS.
The Ministry of Corporate Affairs in 2016 issued a roadmap which includes a strategic plan regarding implementation of Ind AS by Non-Banking Financial Companies. NBFCs will be required to comply with these standards in a phased manner from accounting periods beginning on or after 1st of April of 2018 for the first phase and 1st of April 2019 for the second phase. These phases are described in great details below:-
Phase 1 starts from 1st of April 2018 onwards and ends on or after 31st of March 2018.
Phase II starts from 1st of April 2019 onwards and ends no or after 31st to March 2019.
Non-Banking Finance Companies having net worth lower than Rs 250 crores are not covered in any of the above-mentioned phases. These companies will continue to comply with the existing standards.
There are several benefits of implementing Ind AS. These benefits are given below:-
To conclude, it can be said that the Ind AS is very crucial for companies who want a thorough and in-depth understanding of the new standards and changes in accounting policies, practices and reporting requirements. These standards are as par with International standards, which in turn increases the financial reporting and thus eliminates the chances of fraud and misconduct.
Also Read: Comprehensive Understanding of Ind AS (Indian Accounting Standards)
Seep is a lawyer by profession. She has done BA LLB and now shifted to full-time legal writing. She has extensive prior experience of freelance content writing and has worked for both Indian and international clients. She is vehemently curious and overtly passionate about so many things like blogging, reading, writing and travelling. She always wanted to explore the domains of the unconventional field of law. She has extensive experience in the area of corporate law and in drafting both Indian and International agreements as well. Her driving force is versatility and flexibility. She doesn’t restrict herself only to the field of law.
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