Proposed New Roadmap for Implementation of Ind AS converged with IFRS

 Proposed New Roadmap for Implementation of Ind AS converged with IFRS

For convergence of Indian Accounting Standards with International Financial Reporting Standards (IFRSs), a Press Release (No.2/2010) laying down roadmap for application of converged IndianAccounting Standards (Ind AS) by companies(other than Banking companies, Insurance companies and Non-Banking Finance Companies) was issuedon

22nd January, 2010.  Further, a Press Release (No.3/2010) related to the roadmapfor the

application of the converged Indian Accounting Standards (Ind AS) by the Banking Companies, Insurance companies and Non- Banking Finance Companies was issuedon 31st March, 2010. Subsequently, in response to the requests seeking clarifications on the roadmaps, a Press Release (No. 4/2010) containing a consolidated statement on clarification of roadmap was issued on May 04, 2010. However,  the Ind AS placed on

the website of the MCA could not be implemented due to various reasons from 1stApril,

2011 as per the aforesaid roadmaps issued.

A revised roadmap for implementation of Indian Accounting Standards (Ind AS) finalised by the Council of the ICAI, at its last meeting, held on March 20-22, 2014, as follows, has been submitted to the Ministry of Corporate Affairs for its consideration:

1.    As stated in earlier roadmaps for achieving convergence, there shall be two separate sets of Accounting Standards notified under the Companies Act,  1956.  First  set would comprise the Indian Accounting Standards (Ind AS) converged  with  the IFRSs which shall be applicable for preparation of consolidated financial statements as definedin the Companies Act, 2013, of the specified class of companies. The second set would comprise the existing notified  Accounting  Standards  (AS)  and shall be applicable for  preparation of individual  financial  statements  of  the companies preparing consolidated financial statements as per Ind AS and for financial statements of  other companies.

2.        The first set of Accounting Standards i.e. converged IndianAccounting Standards (Ind AS) shall be applied to the following specified class of companies for preparing their first Indian AccountingStandards (Ind AS) consolidated financial statements for the accounting period beginning on or after April 1, 2016, with comparatives for the year ending 31st March 2016 or thereafter:

(a)              Whose equity and/or debt securities are listed or are in the process of listing on any stock exchange in India or outside India; or

(b)              Companies other than those covered in (a) above, having net worth of Rs.

500 crore or more

(c)              Holding,  subsidiary,  joint  venture  or  associate  companies  of  companies covered under (a) or (b) above.

3.       Companies to which Indian  Accounting  Standards  (Ind  AS)  are  applicable  shall prepare their first set of consolidated financial statements in accordance with the Indian Accounting Standards (Ind AS) effective  at  the  end  of  its  first  Ind  AS reporting period unless otherwise specified, i.e., companies preparing consolidated financial statements for the accounting period beginningon or after April 1, 2016

shall be  required to apply the  Ind AS effective for financial year ending on 31st

March 2017.

4.      Calculation of net worth

For the purpose of calculation of qualifying net worth of companies, the following rules shall apply:

(a)     The net worth shallbe calculated as per the stand alone audited balance sheet of the company falling under any of the categories covered under 2 above as at 31st March 2014 or the first balance sheet for accounting periods which end after that date.

(b)    The net worth shall be calculated as the paid-up Share Capital plus Reserves and Surplus less Revaluation Reserve.

(c)     For companies which are not in existence on 31st March 2014 or an existing company meets the criteria for the first time after 31st March, 2014, the net worth shall be calculated on the basis of the first balance sheet ending after that date.

5.        Voluntary Adoption

(a)    Companies not mandatorily required to follow Indian Accounting Standards (Ind AS)   shallhave the option to apply the Indian Accounting Standards (Ind AS) voluntarily for their consolidated financial statements provided they prepare consolidated financial statements under the Indian Accounting Standards (Ind AS) consistently thereafter.

(b)   The option to apply the Indian Accounting Standards (Ind AS) voluntarily, once exercised,  therefore,  shall  be  irrevocable.  Such  companies  would  not  be required to prepare another consolidated financial statements in accordance with existingAccounting Standards (AS).

6.      Discontinuing  use  of  the  first  set  of  Accounting  Standards  (i.e.  the  Indian Accounting Standards)

Once a company starts following the first set of  Accounting  Standards  for consolidated financial statements, i.e., the Indian Accounting Standards (Ind AS) on the basis of  the  eligibility criteria, it shall be required to follow such Accounting standards for all the subsequent Consolidated Financial Statements even if any of the eligibility criteria does not subsequently apply to it.

7.      The  roadmap  for  banks,  NBFCs  and  Insurance  Companies  will  be  decided  in consultation with RBI and IRDA.