Comprehensive Understanding of Ind AS (Indian Accounting Standards)

With time accounting standards have been devised in India. It is also called Ind As. These standards should be adopted by different corporate form and NBFCs in India under the supervision of the board of Accounting Standards. In this article, we shall have a detailed outlook on Indian Accounting Standards.

What is Accounting Standards Board (ASB)?

This Board was established in 1977 as a regulator and body. It is a professional and autonomous body that is managed by the Institute of Chartered Accountants of India^[1].

There are other bodies other than this, such as Confederation of Indian Industry, Associated Chambers of Commerce & Industry of India, Federation of Indian Chambers of Commerce and Industry, which regulate ASB.

What is the objective of Ind AS?

The following are its objectives:

• To ensure that companies in India adopt such standards to implement internationally recognized best practices.
• To ensure that worldwide compliance is maintained.
• To have a single framework for a single accounting system.
• To serve as a guide for the implementation of the standard.
• Accounting systems in India can be analyzed and be known by global companies.
• To make the annual financial statements and company account transparent.
• The standards are harmonized to make sure that companies meet the global requirements.

A broader scope is acceptable through this Indian accounting standard because, as compared to the past, Indian companies have expanded their global scope.

Applicability of Ind AS

The Indian government and the Corporate Affairs Department have announced the recognition as well as the adoption of the Indian accounting standards by all companies in India. A notice was filed under the Company Accounting Standards Act (US IND) of 2015.

As per this notification, all companies that receive this notification will have to obtain Ind As in stages during the 2016-17 fiscal years. After its adoption, there have been three notification changes in 2016, 17 and 18.

Benefits of Ind AS

It has many advantages. Some of them are as follows:

 Harmonize

When companies adopt these standards, they can harmonize accounting rules. Global accounting principles can be made through harmonization.

Recognized Internationally

These are internationally recognized accounting standards. Hence, if a company wishes to expand internationally, these principles are adopted.

Effective Compliance

When companies adopt these standards, they can ensure effective compliance.

Accepted Globally

The existence of these standards guarantee international recognition of all government institutions and agencies.

Adoption of Indian Accounting Standards

It is in the process of adoption by the companies in India in phases. In the Ist and IInd phases, all listed and unlisted companies adopted these Standards.

In the IIIrd and IVth phases, banks and non-banking financial companies were supposed to adopt such standards. 

Although the NBFCs have come under the Ind AS, banks are yet to adopt them. It is due to the fact that the RBI deferred this on account of 2 factors:

• There was a need to amend the Banking Regulation Act, 1949;
• The banking sector was not itself deemed ‘prepared’ for this change.

The Reserve Bank of India postponed the Ind AS implementation on banks from April 2018 to April 2019. After that, it deferred this implementation again indefinitely in April 2019.

The banking sector always opposed the adoption of Ind AS due to many factors, apart from the already mentioned factors. The implementation of the Ind AS is expected to bring in numerous changes in the accounts of the companies. 

Services provided as per Ind Accounting Standards

The services are as follows:

• Business advisory services pertaining to the specific implementation of international financial reporting standards and IND AS., e.g. Mergers, Consolidations, Financial Instruments, Hedge Accounting, Revenue Recognition and Leases;
•  Planning, Execution and transformation of Ind AS.
•  Facilitate the change to the new Ind accounting standard.
•  Help in analyzing the differences between GAAP and Ind AS.
•  Help in determining new policies as well as procedures to be implemented as per Ind AS.
•  Staff training on the concepts and requirements of Ind AS.
•  Support in preparing annual financial reports as per the Ind AS.

List of Ind AS (Accounting Standards)

The list of major applicable Ind AS is provided in the table made below:

IND AS NO.		NAME
Ind-AS 1		Presentation of Financial Statements
Ind-AS 2		Inventories Accounting
Ind AS 7		Statement of Cash Flows
Ind AS 8		Accounting Policies, Changes in Accounting Estimates and Errors
Ind AS 10		Events after Reporting Period
Ind AS 11		Construction Contracts
Ind AS 12		Income Taxes
Ind AS 16		Property, Plant and Equipment
Ind AS 17		Leases
Ind AS 18		Revenue
Ind AS 19		Employee Benefits
Ind AS 20		Accounting for Government Grants and Disclosure of Government Assistance
Ind-AS 23		Borrowing Costs
Ind AS-24		Related Party Disclosures
Ind AS-27		Separate Financial Statements
Ind AS-28		Investments in Associates and Joint Ventures
Ind AS-29		Financial Reporting in Hyperinflationary Economies
Ind AS-32		Financial Instruments: Presentation
Ind AS-33		Earnings per Share
Ind AS-34		Interim Financial Reporting
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-41	Agriculture
Ind AS-101	First-time adoption of Ind AS
Ind AS-102	Share-Based payments
Ind AS-103	Business Combination
Ind AS-104	Insurance Contracts
Ind AS-105	Non-Current Assets Held for Sale & Discontinued Operations
Ind AS-106	Exploration for and Evaluation of Mineral Resources
Ind AS-107	Financial Instruments: Disclosures
Ind AS-108	Operating Segments
Ind AS-109	Financial Instruments
Ind AS-110	Consolidated Financial Statements
Ind AS-111	Joint Arrangements
Ind AS-112	Disclosure of Interests in Other Entities
Ind AS-113	Fair Value Measurement
Ind AS-114	Regulatory Deferral Accounts
Ind AS-115	Revenue from Contracts with Customers

Conclusion

These standards should be adopted by different corporate form and NBFCs in India under the supervision of the board of Accounting Standards. There have been certain amendments also in some of these Ind As recently.

Read our article:Guidelines for Ind AS Implementation by NBFC’s, ARC’s issued by RBI