IND AS - Indian Accounting Standard

Indian Accounting Standards are issued by the Institute of Chartered Accountants of India (ICAI). IND AS are issued under the ASB (Accounting Standard Board) which is governed by the ICAI. Till date Ministry of Corporate Affairs (MCA) has notified 41 accounting standards.  The application of these standards was voluntary for the year 2015-2016 and mandatory from 2016-2017.

APPLICABILITY:Every listed company.

Unlisted companies whose net worth lies between Rs. 250 crore-Rs 500 crore. [Net worth here is calculated from four previous years financial statements].

IND AS becomes mandatory not only to the parent company but also to its subsidiary, holding, joint and associate company.

EXCEPTIONS: Insurance companies, banking companies and non-banking finance companies (NBFC) need not follow these accounting standards.

The general purpose financial statements are useful to the stakeholders of the company (i. e employees, shareholders, creditors, government and the general public). The set of financial statements include

-Balance sheet at the end of period

-profit and loss statement at the end of the period

-cash flows for the period, notes to accounts providing explanatory information.

-statement showing fluctuations in equity.

WHY IND AS?

India invited Foreign Direct Investment (FDI) and opened doors for globalisation. This encouraged cross border trading and introduced the concept of global village. The government realised that the accounting standards, rules and regulations need to be altered according to the practices at par with the world. Since 2007, the government has been initiating the formulation. Finally on 16^th February, 2015, the MCA notified the set of rules that align with global trades and helps organisations for easy accounting called Indian Accounting Standards with an aim to blend it with IFRS (International Finance Reporting Standards).

Thank You
Regards
Author - Kaushal Shah
Kautilya
IBS Mumbai