Applicability of Indian Accounting Standard (IND AS) - Companies (Indian Accounting Standards) Rules, 2015​

[Deepak Aggarwal]

Applicability of Indian Accounting Standard (IND AS)

Companies (Indian Accounting Standards) Rules, 2015​

Key Points

• As per Rule 3 of Companies (Indian Accounting Standards) Rules, 2015, these standards are applicable only on classes of companies specified in Rule 4. (Refer summary below)
• On rest classes of companies old Companies (Accounting Standards) Rules, 2006 will be applicable and consequently old AS will be applied.
• All companies are allowed to follow only one set of accounting standards, combination of both are strictly not allowed.
• Comparatives figures of preceding accounting year as per IND AS are also required to be given while presenting financial statements. 
• Special provisions / exemption have been introduced for those companies who are listed or in process of being listed on Small & Medium Enterprise (SME) exchange. Here SME exchange means a trading platform of a recognized stock exchange or a dedicated exchange permitted by SEBI to list the securities issued in accordance with Chapter XA of SEBI (ICDR) Regulations and this excludes the Main Board (which is in turn is defined as a recognized stock exchange having nationwide trading terminals, other than SME exchange). 
• These standards will be applicable on both i.e. standalone as well as consolidated financial statements.

 

Classes of companies specified in Rule 4 (Summary)

 

1) Specific Exempt companies

• Insurance  companies
• Banking companies
• NBFCs

Even these companies are not allowed to voluntarily adopt IND AS.

 

2) Covered companies 

S. NO.	Class of companies	Particulars	Applicable w.e.f.	Remark
1	Any company	Voluntarily	01/04/2015	Non reversible decision / irrevocable Need to be followed consistently
2	All listed companies or companies in process of listing in India or abroad	Net worth > = 500 crores	01/04/2016	Criteria need to be checked only at first time adoption i.e. in 1st year only.
	All other companies i.e. unlisted companies	Net worth >= 500 crores	01/04/2016	Criteria need to be checked only at first time adoption i.e. in 1st year only.
	Holding company, Subsidiaries , Joint ventures or associate companies  of above mentioned companies	No such condition	01/04/2016	Not covered overseas subsidiaries, joint ventures, associates or any other similar entities of an Indian company IND As will be applicable on Consolidated financials of such Indian company In case of vice versa case, IND AS will be applicable on Indian subsidiary, joint venture, associate or similar entities of a foreign company
3	All listed companies or companies in process of listing in India or abroad	Net worth < 500 crores	01/04/2017	Criteria need to be checked only at first time adoption i.e. in 1st year only.
	All other companies i.e. unlisted companies	Net worth >=  250 crores <500 crores	01/04/2017	Criteria need to be checked only at first time adoption i.e. in 1st year only.
	Holding company, Subsidiaries , Joint ventures or associate companies  of above mentioned companies	No such condition	01/04/2017	Not covered overseas subsidiaries, joint ventures, associates or any other similar entities of an Indian company IND As will be applicable on Consolidated financials of such Indian company In case of vice versa case, IND AS will be applicable on Indian subsidiary, joint venture, associate or similar entities of a foreign company