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First-time Adoption of Indian Accounting Standards

Ind AS - 101 - Rules - B. Indian Accounting Standards (Ind AS) - Companies (Indian Accounting Standards) Rules, 2015 - Ind AS - 101 - Indian Accounting Standard (Ind AS) 101 (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Objective 1 The objective of this Ind AS is to ensure that an entity s first Ind AS financial statements, and its interim financial reports for part of the p .....

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ance with Ind AS 34, Interim Financial Reporting, for part of the period covered by its first Ind AS financial statements. 3 An entity s first Ind AS financial statements are the first annual financial statements in which the entity adopts Ind ASs, in accordance with Ind ASs notified under the Companies Act, 2013 and makes an explicit and unreserved statement in those financial statements of compliance with Ind ASs. 4 [Refer to Appendix 1] 4A [Refer to Appendix 1] 4B [Refer to Appendix 1] 5 This .....

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the starting point for its accounting in accordance with Ind ASs subject to the requirements of paragraphs D13AA and D22. Accounting policies 7 An entity shall use the same accounting policies in its opening Ind AS Balance Sheet and throughout all periods presented in its first Ind AS financial statements. Those accounting policies shall comply with each Ind AS effective at the end of its first Ind AS reporting period, except as specified in paragraphs 13-19 and Appendices B-D. 8 An entity shal .....

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ning of business on 1 April 2015 (or, equivalently, close of business on 31 March 2015). Entity A presented financial statements in accordance with its previous GAAP annually to 31 March each year up to, and including, 31 March 2016. Application of requirements Entity A is required to apply the Ind ASs effective for periods ending on 31 March 2017 in: a) preparing and presenting its opening Ind AS balance sheet at 1 April 2015; and b) preparing and presenting its balance sheet for 31 March 2017 .....

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ements. 9 The transitional provisions in other Ind ASs apply to changes in accounting policies made by an entity that already uses Ind ASs; they do not apply to a first-time adopter s transition to Ind ASs, except as specified in Appendices B-D. 10 Except as described in paragraphs 13-19 and Appendices B-D, an entity shall, in its opening Ind AS Balance Sheet: (a) recognise all assets and liabilities whose recognition is required by Ind ASs; (b) not recognise items as assets or liabilities if In .....

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e resulting adjustments arise from events and transactions before the date of transition to Ind ASs. Therefore, an entity shall recognise those adjustments directly in retained earnings (or, if appropriate, another category of equity) at the date of transition to Ind ASs. 12 This Ind AS establishes two categories of exceptions to the principle that an entity s opening Ind AS Balance Sheet shall comply with each Ind AS: (a) paragraphs 14-17 and Appendix B prohibit retrospective application of som .....

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GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. 15 An entity may receive information after the date of transition to Ind ASs about estimates that it had made under previous GAAP. In accordance with paragraph 14, an entity shall treat the receipt of that information in the same way as non-adjusting events after the reporting period in accordance with Ind AS 10, Events after the Reporting Period. For .....

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profit or loss (or, if appropriate, other comprehensive income) for the year ended 31 March 2016. 16 An entity may need to make estimates in accordance with Ind ASs at the date of transition to Ind ASs that were not required at that date under previous GAAP. To achieve consistency with Ind AS 10, those estimates in accordance with Ind ASs shall reflect conditions that existed at the date of transition to Ind ASs. In particular, estimates at the date of transition to Ind ASs of market prices, int .....

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entity shall not apply these exemptions by analogy to other items. 19 [Refer to Appendix 1] Presentation and disclosure 20 This Ind AS does not provide exemptions from the presentation and disclosure requirements in other Ind ASs. Comparative information 21 An entity s first Ind AS financial statements shall include at least three Balance Sheet, two Statements of profit and loss, two Statements of cash flows and two Statements of changes in equity and related notes, including comparative inform .....

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parative information required by Ind AS 1. In any financial statements containing historical summaries or comparative information in accordance with previous GAAP, an entity shall: (a) label the previous GAAP information prominently as not being prepared in accordance with Ind ASs; and (b) disclose the nature of the main adjustments that would make it comply with Ind ASs. An entity need not quantify those adjustments. Explanation of transition to Ind ASs 23 An entity shall explain how the transi .....

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resented in the entity s most recent annual financial statements in accordance with previous GAAP. (b) a reconciliation to its total comprehensive income in accordance with Ind ASs for the latest period in the entity s most recent annual financial statements. The starting point for that reconciliation shall be total comprehensive income in accordance with previous GAAP for the same period or, if an entity did not report such a total, profit or loss under previous GAAP. (c) if the entity recognis .....

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oss. If an entity presented a Statement of cash flows under its previous GAAP, it shall also explain the material adjustments to the Statement of cash flows. 26 If an entity becomes aware of errors made under previous GAAP, the reconciliations required by paragraph 24(a) and (b) shall distinguish the correction of those errors from changes in accounting policies. 27 Ind AS 8 does not apply to the changes in accounting policies an entity makes when it adopts Ind ASs or to changes in those policie .....

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rdance with paragraph 23, and it shall update the reconciliations required by paragraph 24(a) and (b). 27AA If an entity adopts the first time exemption option provided in accordance with paragraph D7AA, the fact and the accounting policy shall be disclosed by the entity until such time that those items of Property, plant and equipment, investment properties or intangible assets, as the case may be, are significantly depreciated, impaired or derecognised from the entity s Balance Sheet. 28 If an .....

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carrying amount in the previous financial statements. 29A An entity is permitted to designate a previously recognised financial liability as a financial liability at fair value through profit or loss in accordance with paragraph D19. The entity shall disclose the fair value of financial liabilities so designated at the date of designation and their classification and carrying amount in the previous financial statements. Use of fair value as deemed cost 1[30 If an entity uses fair value in its op .....

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deemed cost in its opening Ind AS Balance Sheet for an investment in a subsidiary, joint venture or associate in its separate financial statements (see paragraph D15), the entity s first Ind AS separate financial statements shall disclose: (a) the aggregate deemed cost of those investments for which deemed cost is their previous GAAP carrying amount; (b) the aggregate deemed cost of those investments for which deemed cost is fair value; and (c) the aggregate adjustment to the carrying amounts r .....

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rmined under previous GAAP. Use of deemed cost after severe hyperinflation 31C If an entity elects to measure assets and liabilities at fair value and to use that fair value as the deemed cost in its opening Ind AS Balance Sheet because of severe hyperinflation (see paragraphs D26-D30), the entity s first Ind AS financial statements shall disclose an explanation of how, and why, the entity had, and then ceased to have, a functional currency that has both of the following characteristics: (a) a r .....

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of Ind AS 34: (a) Each such interim financial report shall, if the entity presented an interim financial report for the comparable interim period of the immediately preceding financial year, include: (i) a reconciliation of its equity in accordance with previous GAAP at the end of that comparable interim period to its equity under Ind ASs at that date; and (ii) a reconciliation to its total comprehensive income in accordance with Ind ASs for that comparable interim period (current and year to d .....

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(supplemented by the details required by paragraphs 25 and 26) or a cross-reference to another published document that includes these reconciliations. (c) If an entity changes its accounting policies or its use of the exemptions contained in this Ind AS, it shall explain the changes in each such interim financial report in accordance with paragraph 23 and update the reconciliations required by (a) and (b). 33 Ind AS 34 requires minimum disclosures, which are based on the assumption that users of .....

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t information or include a cross-reference to another published document that includes it. 9[Effective Date 34 * 35 * 36 * 37 * 38 * 39 * 39A * 39B * 39C * 39D * 39E * 39F * 39G * 39H * 39I * 39J * 39K * 39L * 39M * 39N * 39O * 39P * 39Q * 39R * 39S * 39T * 39U * 39V * 39W * 39X As a consequence of issuance of Ind AS 115, Revenue from Contracts with Customers, paragraphs D1(m),(u), D22 and heading after paragraph D33 are amended, paragraphs D34-D35 are added and earlier paragraph D36 in context .....

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efined terms This appendix is an integral part of this Ind AS. date of transition to Ind ASs The beginning of the earliest period for which an entity presents full comparative information under Ind ASs in first Ind AS financial statements deemed cost An amount used as a surrogate for cost or depreciated cost at a given date. Subsequent depreciation or amortisation assumes that the entity had initially recognised the asset or liability at the given date and that its cost was equal to the deemed c .....

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Ind AS financial statements first-time adopter An entity that presents its first Ind AS financial statements. Indian Accounting Standards (Ind ASs) Ind ASs are Accounting Standards prescribed under Section 133 of the Companies Act, 2013. opening Ind AS Balance Sheet An entity s Balance Sheet at the date of transition to Ind ASs. previous GAAP The basis of accounting that a first-time adopter used for its statutory reporting requirement in India immediately before adopting Ind AS s. For instance .....

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(c) non-controlling interests (paragraph B7); (d) classification and measurement of financial assets (paragraphs B8- B8C); (e) impairment of financial assets (paragraphs B8D-B8G); (f) embedded derivatives (paragraph B9); and (g) government loans (paragraphs B10-B12). Derecognition of financial assets and financial liabilities B2 Except as permitted by paragraph B3, a first-time adopter shall apply the derecognition requirements in Ind AS 109 prospectively for transactions occurring on or after .....

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on requirements in Ind AS 109 retrospectively from a date of the entity s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions. Hedge accounting B4 As required by Ind AS 109, at the date of transition to Ind ASs an entity shall: (a) measure all derivatives at fair value; and (b) eliminate all deferred losses and gains ar .....

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reign currency risk). However, if an entity designated a net position as a hedged item in accordance with previous GAAP, it may designate as a hedged item in accordance with Ind ASs an individual item within that net position, or a net position if that meets the requirements in paragraph 6.6.1 of Ind AS 109, provided that it does so no later than the date of transition to Ind ASs. B6 If, before the date of transition to Ind ASs, an entity had designated a transaction as a hedge but the hedge doe .....

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me is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance; (b) the requirements in paragraphs 23 and B96 for accounting for changes in the parent s ownership interest in a subsidiary that do not result in a loss of control; and (c) the requirements in paragraphs B97-B99 for accounting for a loss of control over a subsidiary, and the related requirements of paragraph 8A of Ind AS 105, Non-curren .....

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of transition to Ind ASs. B8A If it is impracticable to assess a modified time value of money element in accordance with paragraphs B4.1.9B-B4.1.9D of Ind AS 109 on the basis of the facts and circumstances that exist at the date of transition to Ind ASs, an entity shall assess the contractual cash flow characteristics of that financial asset on the basis of the facts and circumstances that existed at the date of transition to Ind ASs without taking into account the requirements related to the mo .....

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ancial assets are derecognized. B8B If it is impracticable to assess whether the fair value of a prepayment feature is insignificant in accordance with paragraph B4.1.12(c) of Ind AS 109 on the basis of the facts and circumstances that exist at the date of transition to Ind-ASs, an entity shall assess the contractual cash flow characteristics of that financial asset on the basis of the facts and circumstances that existed at the date of transition to Ind-ASs without taking into account the excep .....

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AS 8) for an entity to apply retrospectively the effective interest method in Ind AS 109, the fair value of the financial asset or the financial liability at the date of transition to Ind ASs shall be the new gross carrying amount of that financial asset or the new amortised cost of that financial liability at the date of transition to Ind ASs. Impairment of financial assets B8D An entity shall apply the impairment requirements in Section 5.5 of Ind AS 109 retrospectively subject to paragraphs B .....

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of transition to Ind ASs (also see paragraphs B8EA- B8EB of this Ind AS. B8EA An entity should seek to approximate the credit risk on initial recognition by considering all reasonable and supportable information that is available without undue cost or effort. An entity is not required to undertake an exhaustive search for information when determining, at the date of transition to Ind ASs, whether there have been significant increases in credit risk since initial recognition. If an entity is una .....

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sk at initial recognition. In order to determine or approximate the initial credit risk, an entity may consider internal and external information, including portfolio information, in accordance with paragraphs B5.5.1-B5.5.6 of Ind AS 109. B8F When determining whether there has been a significant increase in credit risk since initial recognition, an entity may apply: (a) the requirements in paragraph 5.5.10 and B5.5.22-B5.5.24 of Ind AS 109; and (b) the rebuttable presumption in paragraph 5.5.11 .....

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l recognise a loss allowance at an amount equal to lifetime expected credit losses at each reporting date until that financial instrument is derecognised (unless that financial instrument is low credit risk at a reporting date, in which case paragraph B8F(a) applies). Embedded derivatives B9 A first-time adopter shall assess whether an embedded derivative is required to be separated from the host contract and accounted for as a derivative on the basis of the conditions that existed at the later .....

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ants and Disclosure of Government Assistance, prospectively to government loans existing at the date of transition to Ind ASs and shall not recognise the corresponding benefit of the government loan at a below-market rate of interest as a government grant. Consequently, if a first-time adopter did not, under its previous GAAP, recognise and measure a government loan at a below-market rate of interest on a basis consistent with Ind AS requirements, it shall use its previous GAAP carrying amount o .....

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accounting for that loan. B12 The requirements and guidance in paragraphs B10 and B11 do not preclude an entity from being able to use the exemptions described in paragraphs D19-D19C relating to the designation of previously recognised financial instruments at fair value through profit or loss. Appendix C Exemptions for business combinations This appendix is an integral part of this Ind AS. An entity shall apply the following requirements to business combinations that the entity recognised befor .....

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y Ind AS 110 from that same date. For example, if a first-time adopter elects to restate a business combination that occurred on 30 June 2010, it shall restate all business combinations that occurred between 30 June 2010 and the date of transition to Ind ASs, and it shall also apply Ind AS 110 from 30 June 2010. C2 An entity need not apply Ind AS 21, The Effects of Changes in Foreign Exchange Rates, retrospectively to fair value adjustments and goodwill arising in business combinations that occu .....

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ous GAAP. C3 An entity may apply Ind AS 21 retrospectively to fair value adjustments and goodwill arising in either: (a) all business combinations that occurred before the date of transition to Ind ASs; or (b) all business combinations that the entity elects to restate to comply with Ind AS 103, as permitted by paragraph C1 above. C4 If a first-time adopter does not apply Ind AS 103 retrospectively to a past business combination, this has the following consequences for that business combination: .....

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GAAP (see paragraph B2); and (ii) assets, including goodwill, and liabilities that were not recognised in the acquirer s consolidated Balance Sheet in accordance with previous GAAP and also would not qualify for recognition in accordance with Ind ASs in the separate Balance Sheet of the acquiree (see (f)-(i) below). The first-time adopter shall recognise any resulting change by adjusting retained earnings (or, if appropriate, another category of equity), unless the change results from the recog .....

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ble asset an item that does not qualify for recognition as an asset in accordance with Ind AS 38, Intangible Assets. It shall reclassify that item (and, if any, the related deferred tax and noncontrolling interests) as part of goodwill (unless it deducted goodwill directly from equity in accordance with previous GAAP, see (g)(i) and (i) below) or capital reserve to the extent not exceeding the balance available in that reserve. (ii) the first-time adopter shall recognise all other resulting chan .....

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ather than goodwill/capital reserve. (e) Immediately after the business combination, the carrying amount in accordance with previous GAAP of assets acquired and liabilities assumed in that business combination shall be their deemed cost in accordance with Ind ASs at that date. If Ind ASs require a cost-based measurement of those assets and liabilities at a later date that deemed cost shall be the basis for cost-based depreciation or amortisation from the date of the business combination. (f) If .....

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ombination, it shall capitalise those leases in its consolidated financial statements, as Ind AS 17, Leases, would require the acquiree to do in its Ind AS Balance Sheet. Similarly, if the acquirer had not, in accordance with its previous GAAP, recognised a contingent liability that still exists at the date of transition to Ind ASs, the acquirer shall recognise that contingent liability at that date unless Ind AS 37, Provisions, Contingent Liabilities and Contingent Assets, would prohibit its re .....

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ccordance with previous GAAP at the date of transition to Ind ASs, after the following two adjustments: (i) If required by (c)(i) above, the first-time adopter shall increase the carrying amount of goodwill or decrease the carrying amount of capital reserve when it reclassifies an item that it recognised as an intangible asset in accordance with previous GAAP. Similarly, if (f) above requires the first-time adopter to recognise an intangible asset that was subsumed in recognised goodwill or capi .....

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t loss in retained earnings (or, if so required by Ind AS 36, in revaluation surplus). The impairment test shall be based on conditions at the date of transition to Ind ASs. (h) No other adjustments shall be made to the carrying amount of goodwill / capital reserve at the date of transition to Ind ASs. For example, the first-time adopter shall not restate the carrying amount of goodwill / capital reserve: (i) to exclude in-process research and development acquired in that business combination (u .....

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e with previous GAAP as a deduction from equity: (i) it shall not recognise that goodwill in its opening Ind AS Balance Sheet. Furthermore, it shall not reclassify that goodwill to profit or loss if it disposes of the subsidiary or if the investment in the subsidiary becomes impaired. (ii) adjustments resulting from the subsequent resolution of a contingency affecting the purchase consideration shall be recognised in retained earnings. (j) In accordance with its previous GAAP, the first-time ado .....

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Ss between: (i) the parent s interest in those adjusted carrying amounts; and (ii) the cost in the parent s separate financial statements of its investment in the subsidiary. (k) The measurement of non-controlling interests and deferred tax follows from the measurement of other assets and liabilities. Therefore, the above adjustments to recognised assets and liabilities affect non-controlling interests and deferred tax. C5 The exemption for past business combinations also applies to past acquisi .....

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ous GAAP, the entity (a) deducted goodwill directly from equity or (b) did not treat the business combination as an acquisition or (c) recognised capital reserve in a business combination accounted for as an acquisition and the amount of reclassification mentioned in (i) above exceeds the balance available in that reserve. Appendix D Exemptions from other Ind ASs This appendix is an integral part of thisInd AS. D1. An entity may elect to use one or more of the following exemptions: (a) share-bas .....

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signation of previously recognised financial instruments (paragraphs D19-D19C); (k) fair value measurement of financial assets or financial liabilities at initial recognition (paragraph D20); (l) decommissioning liabilities included in the cost of property, plant and equipment (paragraphs D21 and D21A); 10[(m) financial assets or intangible assets accounted for in accordance with Appendix D to Ind AS 115 Service Concession Arrangements (paragraph D22);] (n) borrowing costs (paragraph D23); (o) [ .....

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urrency transactions and advance consideration (paragraph D36).] An entity shall not apply these exemptions by analogy to other items. Share-based payment transactions D2 A first-time adopter is encouraged, but not required, to apply Ind AS 102 Share-based payment to equity instruments that vested before date of transition to Ind ASs. However, if a first-time adopter elects to apply Ind AS 102 to such equity instruments, it may do so only if the entity has disclosed publicly the fair value of th .....

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ity is not required to apply paragraphs 26-29 of Ind AS 102 if the modification occurred before the date of transition to Ind ASs. D3 A first-time adopter is encouraged, but not required, to apply Ind AS 102 to liabilities arising from share-based payment transactions that were settled before the date of transition to Ind ASs. Insurance contracts D4 An entity shall apply Ind AS 104 Insurance Contracts for annual periods beginning on or after date of transition to Ind ASs. Earlier application is .....

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est period for which an entity presents full comparative information that complies with this Ind AS, the entity shall disclose that fact. When an insurer changes its accounting policies for insurance liabilities, it is permitted, but not required, to reclassify some or all of its financial assets as at fair value through profit or loss . This reclassification is permitted if an insurer changes accounting policies when it first applies Ind AS 104 and if it makes a subsequent policy change permitt .....

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on, if the revaluation was, at the date of the revaluation, broadly comparable to: ( a ) fair value; or ( b ) cost or depreciated cost in accordance with Ind ASs, adjusted to reflect, for example, changes in a general or specific price index. 3[D7 The elections in paragraphs D5 and D6 are also available for: (a) Omitted*; (b) intangible assets that meet: (i) the recognition criteria in Ind AS 38 (including reliable measurement of original cost); and (ii) the criteria in Ind AS 38 for revaluation .....

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he date of transition after making necessary adjustments in accordance with paragraph D21 and D21A, of this Ind AS. For this purpose, if the financial statements are consolidated financial statements, the previous GAAP amount of the subsidiary shall be that amount used in preparing and presenting consolidated financial statements. Where a subsidiary was not consolidated under previous GAAP, the amount required to be reported by the subsidiary as per previous GAAP in its individual financial stat .....

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ay have established a deemed cost in accordance with previous GAAP for some or all of its assets and liabilities by measuring them at their fair value at one particular date because of an event such as a privatization or initial public offering. (a) If the measurement date is at or before the date of transition to Ind ASs, the entity may use such event-driven fair value measurements as deemed cost for Ind ASs at the date of that measurement. (b) If the measurement date is after the date of trans .....

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es in accordance with the other requirements in this Ind AS. D8A Under some GAAP s exploration and development costs for oil and gas properties in the development or production phases are accounted for in cost centers that include all properties in a large geographical area. A first-time adopter using such accounting under previous GAAP may elect to measure oil and gas assets at the date of transition to Ind ASs on the following basis: (a) exploration and evaluation assets at the amount determin .....

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106, Exploration for and Evaluation of Mineral Resources, or Ind AS 36 respectively and, if necessary, reduce the amount determined in accordance with (a) or (b) above. For the purposes of this paragraph, oil and gas assets comprise only those assets used in the exploration, evaluation, development or production of oil and gas. D8B Some entities hold items of property, plant and equipment or intangible assets that are used, or were previously used, in operations subject to rate regulation. The c .....

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AS 36 each item for which this exemption is used. For the purposes of this paragraph, operations are subject to rate regulation if they are governed by a framework for establishing the prices that can be charged to customers for goods or services and that framework is subject to oversight and/or approval by a rate regulator (as defined in Ind AS 114, Regulatory Deferral Accounts). Leases D9 A first-time adopter may apply paragraphs 6-9 of the Appendix C of Ind AS 17 Determining whether an Arrang .....

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st-time adopter need not reassess that determination when it adopts Ind ASs. For an entity to have made the same determination of whether the arrangement contained a lease in accordance with previous GAAP, that determination would have to have given the same outcome as that resulting from applying Ind AS 17, Leases, and Appendix C of Ind AS 17. D9AA When a lease includes both land and building elements, a first time adopter may assess the classification of each element as finance or an operating .....

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comprehensive income and accumulate these in a separate component of equity; and (b) on disposal of a foreign operation, to reclassify the cumulative translation difference for that foreign operation (including, if applicable, gains and losses on related hedges) from equity to profit or loss as part of the gain or loss on disposal. D13 However, a first-time adopter need not comply with these requirements for cumulative translation differences that existed at the date of transition to Ind ASs. I .....

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ing for exchange differences arising from translation of long-term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period as per the previous GAAP. Investments in subsidiaries, joint ventures and associates D14 When an entity prepares separate financial statements, Ind AS 27 requires it to account for its investments in subsidiaries, joint ventures and associates either: (a) at c .....

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amount at that date. A first-time adopter may choose either (i) or (ii) above to measure its investment in each subsidiary, joint venture or associate that it elects to measure using a deemed cost. Assets and liabilities of subsidiaries, associates and joint ventures D16 If a subsidiary becomes a first-time adopter later than its parent, the subsidiary shall, in its financial statements, measure its assets and liabilities at either: (a) the carrying amounts that would be included in the parent s .....

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ate of transition to Ind ASs. These carrying amounts could differ from those described in (a): (i) when the exemptions in this Ind AS result in measurements that depend on the date of transition to Ind ASs. (ii) when the accounting policies used in the subsidiary s financial statements differ from those in the consolidated financial statements. For example, the subsidiary may use as its accounting policy the cost model in Ind AS 16 Property, Plant and Equipment, whereas the group may use the rev .....

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statements of the subsidiary (or associate or joint venture), after adjusting for consolidation and equity accounting adjustments and for the effects of the business combination in which the entity acquired the subsidiary. Notwithstanding this requirement, a non-investment entity parent shall not apply the exception to consolidation that is used by any investment entity subsidiaries. Similarly, if a parent becomes a first-time adopter for its separate financial statements earlier or later than f .....

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of equity. The first portion is in retained earnings and represents the cumulative interest accreted on the liability component. The other portion represents the original equity component. However, in accordance with this Ind AS, a first-time adopter need not separate these two portions if the liability component is no longer outstanding at the date of transition to Ind ASs. Designation of previously recognised financial instruments D19 Ind AS 109 permits a financial liability (provided it meets .....

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the basis of the facts and circumstances that exist at the date of transition to Ind ASs. D19B An entity may designate an investment in an equity instrument as at fair value through other comprehensive income in accordance with paragraph 5.7.5 of Ind AS 109 on the basis of the facts and circumstances that exist at the date of transition to Ind ASs. D19C For a financial liability that is designated as a financial liability at fair value through profit or loss, an entity shall determine whether th .....

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ion to Ind ASs. Decommissioning liabilities included in the cost of property, plant and equipment D21 Appendix A to Ind AS 16 Changes in Existing Decommissioning, Restoration and Similar Liabilities requires specified changes in a decommissioning, restoration or similar liability to be added to or deducted from the cost of the asset to which it relates; the adjusted depreciable amount of the asset is then depreciated prospectively over its remaining useful life. A first-time adopter need not com .....

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hat date using its best estimate of the historical riskadjusted discount rate(s) that would have applied for that liability over the intervening period; and (c) calculate the accumulated depreciation on that amount, as at the date of transition to Ind ASs, on the basis of the current estimate of the useful life of the asset, using the depreciation policy adopted by the entity in accordance with Ind ASs. D21A An entity that uses the exemption in paragraph D8A(b) (for oil and gas assets in the dev .....

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nd ASs determined under the entity s previous GAAP. 14[Financial assets or intangible assets accounted for in accordance with Appendix D, Service Concession Arrangements to Ind AS 115] D22 A first-time adopter may apply the following provisions while applying the 15[Appendix D to Ind AS 115:] i) Subject to paragraph (ii), changes in accounting policies are accounted for in accordance with Ind AS 8, i.e. retrospectively, except for the policy adopted for amortization of intangible assets arising .....

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; (b) use the previous carrying amounts of those financial and intangible assets (however previously classified) as their carrying amounts as at that date; and (c) test financial and intangible assets recognised at that date for impairment, unless this is not practicable, in which case the amounts shall be tested for impairment as at the start of the current period. iii) There are two aspects to retrospective determination: reclassification and remeasurement. It will usually be practicable to de .....

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Instruments from the date of transition to Ind ASs. Severe hyperinflation D26 If an entity has a functional currency that was, or is, the currency of a hyperinflationary economy, it shall determine whether it was subject to severe hyperinflation before the date of transition to Ind ASs. This applies to entities that are adopting Ind ASs for the first time, as well as entities that have previously applied Ind ASs. D27 The currency of a hyperinflationary economy is subject to severe hyperinflatio .....

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n paragraph D27, or when there is a change in the entity s functional currency to a currency that is not subject to severe hyperinflation. D29 When an entity s date of transition to Ind ASs is on, or after, the functional currency normalisation date, the entity may elect to measure all assets and liabilities held before the functional currency normalisation date at fair value on the date of transition to Ind ASs. The entity may use that fair value as the deemed cost of those assets and liabiliti .....

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o the equity method, an entity shall recognise its investment in the joint venture at transition date to Ind ASs. That initial investment shall be measured as the aggregate of the carrying amounts of the assets and liabilities that the entity had previously proportionately consolidated, including any goodwill arising from acquisition. If the goodwill previously belonged to a larger cashgenerating unit, or to a group of cash-generating units, the entity shall allocate goodwill to the joint ventur .....

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ition to Ind ASs, regardless of whether there is any indication that the investment may be impaired. Any resulting impairment shall be recognised as an adjustment to retained earnings at the date of transition to Ind ASs. The initial recognition exception in paragraphs 15 and 24 of Ind AS 12 Income Taxes does not apply when the entity recognises an investment in a joint venture resulting from applying the transition requirements for joint ventures that had previously been proportionately consoli .....

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ained earnings at the date of transition to Ind ASs. The entity shall disclose this fact, along with its cumulative unrecognised share of losses of its joint ventures at the date of transition to Ind ASs. D31AE An entity shall disclose a breakdown of the assets and liabilities that have been aggregated into the single line investment balance at the date of transition to Ind ASs. That disclosure shall be prepared in an aggregated manner for all joint ventures at the date of transition to Ind ASs. .....

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was previously accounted for using the equity method and any other items that formed part of the entity s net investment in the arrangement in accordance with paragraph 38 of Ind AS 28 and recognise its share of each of the assets and the liabilities in respect of its interest in the joint operation, including any goodwill that might have formed part of the carrying amount of the investment. D31AH An entity shall determine its interest in the assets and liabilities relating to the joint operati .....

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ther items that formed part of the entity s net investment in the arrangement in accordance with paragraph 38 of Ind AS 28, and the net amount of the assets and liabilities, including any goodwill, recognised shall be: a. offset against any goodwill relating to the investment with any remaining difference adjusted against retained earnings at the date of transition to Ind ASs, if the net amount of the assets and liabilities, including any goodwill, recognised is higher than the investment (and a .....

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gnised, and the assets and liabilities recognised, together with any remaining difference adjusted against retained earnings, at the date of transition to Ind ASs. D31AK The initial recognition exception in paragraphs 15 and 24 of Ind AS 12 does not apply when the entity recognises assets and liabilities relating to its interest in a joint operation. Transition provisions in an entity s separate financial statements D31AL An entity that, in accordance with paragraph 10 of Ind AS 27, was previous .....

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sted in retained earnings, at the date of transition to Ind ASs. Stripping costs in the production phase of a surface mine D32 A first-time adopter may apply the Appendix B of Ind AS 16 Stripping Costs in the Production Phase of a Surface Mine from the date of transition to Ind ASs. As at transition date to Ind ASs, any previously recognised asset balance that resulted from stripping activity undertaken during the production phase ( predecessor stripping asset ) shall be reclassified as a part o .....

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ll be recognised in opening retained earnings at the transition date to Ind ASs. Designation of contracts to buy or sell a non-financial item D33 Ind AS 109 permits some contracts to buy or sell a non-financial item to be designated at inception as measured at fair value through profit or loss (see paragraph 2.5 of Ind AS 109). Despite this requirement an entity is permitted to designate, at the date of transition to Ind ASs, contracts that already exist on that date as measured at fair value th .....

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of Ind AS 115. D35 A first-time adopter is not required to restate contracts that were completed before the earliest period presented. A completed contract is a contract for which the entity has transferred all of the goods or services identified in accordance with previous GAAP.] 5[Paragraphs D34, D34AA and D35 - Omitted] Non-current assets held for sale and discontinued operations D35AAInd AS 105 requires non-current assets (or disposal groups) that meet the criteria to be classified as held f .....

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ctly in retained earnings any difference between that amount and the carrying amount of those assets at the date of transition to Ind ASs determined under the entity s previous GAAP. 17[Foreign Currency Transactions and Advance Consideration D36 A first-time adopter need not apply Appendix B, Foreign Currency Transactions and Advance Consideration of Ind AS 21 to assets, expenses and income in the scope of that Appendix initially recognised before the date of transition to Ind AS Standards.] App .....

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f Ind AS 101 specifies that an entity s first Ind AS financial statements are the first annual financial statements in which the entity adopts Ind ASs in accordance with Ind ASs notified under the Companies Act, 2013 whereas IFRS 1 provides various examples of first IFRS financial statements. 2. Paragraph 4, 4A, 4B, 23A and 23B of IFRS 1 provide various examples of instances when an entity does not apply this IFRS. Ind AS 101 does not provide the same. In order to maintain consistency with parag .....

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ied Indian accounting standards as was applicable to them as previous GAAP when it transitions to Ind ASs. 4. Under IFRS 1, para C4(c) requires, the first-time adopter shall exclude from its opening Ind AS Balance Sheet any item recognised in accordance with previous GAAP that does not qualify for recognition as an asset or liability under Ind ASs. The first-time adopter shall account for the resulting change in the retained earnings as at the transition date except in certain specific instances .....

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Accordingly, paragraphs 6 and D22 have been modified. Further a heading and paragraph D13AA have been added after paragraph D13. 6. Certain IFRS 1 exceptions to the retrospective application of other IFRS refer to transitional provisions of other IFRSs. However Ind ASs does not provide transitional provisions, accordingly transitional provisions in other IFRSs have been incorporated in the paragraphs B8A, B8B, B8D, B8E, B8EA and B8EB of Ind AS 101. 7. Certain exemptions in Appendix D of IFRS 1 .....

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s the transitional provisions of IFRIC 4 Determining whether an Arrangement contains a Lease; (iii) Paragraph D22 includes the transitional provisions of IFRIC 12 Service Concession Arrangements; (iv) Paragraph D25 includes the transitional provisions of IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments; (v) Paragraph D31 includes the transitional provisions of IFRS 11 Joint Arrangements; (vi) Paragraph D32 includes the transitional provisions of IFRIC 20 Stripping Costs in th .....

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o Ind ASs. IFRS 1 provides for various dates from which a standard could have been implemented. For example, Paragraph D2 of IFRS 1 provides that an entity is encouraged, but not required, to apply IFRS 2 Share-based Payment to equity instruments that were granted on or before 7 November 2002 or to instruments that were granted after 7 November 2002 and vested before the later of (a) the date of transition to IFRSs and (b) 1 January 2005. However, for Ind AS 101 purposes, all these dates have be .....

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where it provided an option to expense out such borrowing cost. (c) Inclusion/modification of existing exemptions to make it relevant for India. For example, 1. Paragraph D7AA has been added to provide for transitional relief from the retrospective application of Ind AS 16: Property, Plant and Equipment. Paragraph D7AA, provides an entity option to use carrying values of all such assets as on the date of transition to Ind ASs, in accordance with previous GAAP as an acceptable starting point unde .....

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been added to provide for transitional relief while applying Ind AS 17: Leases. D9AA provides an entity to use the transition date facts and circumstances for lease arrangements which includes both land and building elements to assess the classification of each element as finance or an operating lease at the transition date to Ind ASs. Also, if there is any land lease newly classified as finance lease then the first time adopter may recognise assets and liability at fair value on that date; any .....

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ot provide the above said short-term exemption. In order to maintain consistency with Appendix numbers of IFRS 1, the Appendix E is retained in Ind AS 101. 7[10. IFRS 9 Financial Instruments is effective from annual period beginning on or after January 1, 2018. As the above said standard is not yet effective consequential amendments due to this standard have not been incorporated in current version of IFRS 1. However, corresponding Ind AS 109, Financial Instruments has been issued with consequen .....

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aragraph numbers are retained in Ind AS 101: (i) Paragraph 19 (ii) Paragraph D1(e) (iii) Paragraph D1(o) (iv) Paragraph D10-11 (v) Paragraph D 24 (vi) Paragraph D 31 8[13. IAS 40, Investment Property permits both cost model and fair value model (except in some situations) for measurement of investment properties after initial recognition. Ind AS 40, Investment Property permits only the cost model. As a consequence, paragraph 30 is amended and paragraph D7 (a) is deleted. 18[14. Paragraphs 34 to .....

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property, plant and equipment, an investment property or an intangible asset (see paragraphs D5 and D7), the entity s first Ind AS financial statements shall disclose, for each line item in the opening Ind AS Balance Sheet: (a) the aggregate of those fair values; and (b) the aggregate adjustment to the carrying amounts reported under previous GAAP." 2. Substituted vide F. No. 01/01/2009-CL-V(Part) - Dated 30-3-2016 before it was read as, "(m) financial assets or intangible assets acco .....

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al cost); and ( i i ) the criteria in Ind AS 38 for revaluation (including the existence of an active market). An entity shall not use these elections for other assets or for liabilities." 4. Substituted vide F. No. 01/01/2009-CL-V(Part) - Dated 30-3-2016 before it was read as, Financial assets or intangible assets accounted for in accordance with Appendix C, Service Concession Arrangements to Ind AS 115 D22 A first-time adopter may apply the following provisions while applying the Appendix .....

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e date the contract was completed rather than estimating variable consideration amounts in the comparative reporting periods; and (c) for all reporting periods presented before the beginning of the first Ind AS reporting period, an entity need not disclose the amount of the transaction price allocated to the remaining performance obligations and an explanation of when the entity expects to recognise that amount as revenue. D34AAFor any of the practical expedients in paragraph D34 that an entity .....

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a contract for which the entity has transferred all of the goods or services identified in accordance with previous GAAP. 6. Inserted vide F. No. 01/01/2009-CL-V(Part) - Dated 30-3-2016 7. Substituted vide F. No. 01/01/2009-CL-V(Part) - Dated 30-3-2016 before it was read as, 10. IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers are effective from annual period beginning on or after January 1, 2018 and January 1, 2017, respectively. As the above said standards are no .....

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o. 01/01/2009-CL-V(Part VI) - Dated 28-03-2018, w.e.f. 1st day of April, 2018, 10. Substituted vide F. No. 01/01/2009-CL-V(Part VI) - Dated 28-03-2018, w.e.f. 1st day of April, 2018, before it was read as, "2[(m) financial assets or intangible assets accounted for in accordance with Appendix A to Ind AS 11 Service Concession Arrangements (paragraph D22); ]" 11. Substituted vide F. No. 01/01/2009-CL-V(Part VI) - Dated 28-03-2018, w.e.f. 1st day of April, 2018, before it was read as, &qu .....

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