IND AS is also known as Indian Accounting Standards or Indian version of IFRS. Indian AS or IND AS is used in the context of Indian companies.
In 2015, the Ministry of Corporate Affairs (MCA) issued notice to companies regarding the adoption of IND AS by Indian Accounting Standards Rules 2015.
The applicability of the IND AS started in a phased manner starting from the accounting period 2016-17. The MCA has issued three amendments to the rules with each amendment passed in 2016, 2017 and 2018.
IND AS are a set of accounting standards that are a modified form of IFRS in order to make reports prepared by Indian Companies more accessible for the global market.
Most companies are now expanding overseas and along with that brings about the necessity of merging Indian accounting standards with the International standards. This led to the formation of IND AS.
Phases of Implementation
MCA has issued a notice to all the companies for phase wise implementation of the IND AS from the existing IND GAAP. This included directives for the classes of the company, which was based on the net worth and listing status.
Phase 1: In this phase, IND AS was made mandatory from 1st April 2016 for the following class of companies
- Listed or Unlisted Company
- Having a net worth which is greater than or equal to 500 crores.
Phase 2: This phase started from 1st April 2017 and included the following companies
- Listed or in the process of getting listed (upto 31st March 2016)
- Having a net worth which is greater than or equal to 250 crores but less than 500 crores for any of the accounting periods (2014-17)
Phase 3: The 3rd phase of implementation made it mandatory for certain classes of companies such as Banks, Insurance companies, NBFC (Non-Banking Financial Corporation) that have a net worth more than or equal to 500 Crores effective from 1st April 2018.
Phase 4: This phase which started on 1st April, 2019 made it mandatory for those NBFCs having net worth of 250 crores but less than 500 crores and to have the rule applicable from 1st May, 2019.
This concludes the topic of Applicability of IND AS, which is an important topic of Accountancy for Commerce students. For more such interesting articles, stay tuned to BYJU’S.