Accounting and Auditing

Indian Accounting Standards (IND AS)

Ind-AS applicability for NBFC, Banks and Insurance Companies

Ind AS	Applicability Criteria*
For Banks and Insurance Companies	With recent developments, the Ind AS implementation date has been deferred for banks by one year (applicable from April 1, 2020) and for insurance entities by two years (applicable from April 1, 2021).
For NBFCs	Ind AS is applicable in two phases: Ind AS is applicable from April 1, 2018 onwards with comparatives for the period ending March 31, 2018 - If net worth is equal to or more than ₹ 500 crores Ind AS is applicable from April 1, 2019 onwards with comparatives for the period ending March 31, 2019 – For listed companies or companies in the process of listing equity or debt securities on any stock exchange in India or outside India - If net worth is less than 500 crores For unlisted companies – If net worth is ₹ 250 crores or more but less than ₹ 500 crore. Holding subsidiary, joint venture or associates companies of the aforesaid non-banking finance companies other than those companies already covered under the corporate roadmap would also be required to prepare Ind AS based financial statements from April 1, 2018 or April 1, 2019, as the case may be Unlisted NBFCs having net worth below ₹ 250 crore and not covered under the above provisions shall continue to apply the Accounting Standards specified in the Annexure to the Companies (Accounting Standards) Rules, 2006. Non-Banking Financial Company means a NBFC defined in section 45-I(f) of the Reserve Bank of India, 1934 and includes Housing Finance Companies, Merchant Banking companies, Stock Brokers or Sub-Broker Companies, Nidhi Companies, etc.

Ind AS

Applicability Criteria*

For Banks and Insurance Companies

With recent developments, the Ind AS implementation date has been deferred for banks by one year (applicable from April 1, 2020) and for insurance entities by two years (applicable from April 1, 2021).

For NBFCs

Ind AS is applicable in two phases:

Ind AS is applicable from April 1, 2018 onwards with comparatives for the period ending March 31, 2018 - If net worth is equal to or more than ₹ 500 crores
Ind AS is applicable from April 1, 2019 onwards with comparatives for the period ending March 31, 2019 –
- For listed companies or companies in the process of listing equity or debt securities on any stock exchange in India or outside India - If net worth is less than 500 crores
- For unlisted companies – If net worth is ₹ 250 crores or more but less than ₹ 500 crore.

Holding subsidiary, joint venture or associates companies of the aforesaid non-banking finance companies other than those companies already covered under the corporate roadmap would also be required to prepare Ind AS based financial statements from April 1, 2018 or April 1, 2019, as the case may be

Unlisted NBFCs having net worth below ₹ 250 crore and not covered under the above provisions shall continue to apply the Accounting Standards specified in the Annexure to the Companies (Accounting Standards) Rules, 2006.

Non-Banking Financial Company means a NBFC defined in section 45-I(f) of the Reserve Bank of India, 1934 and includes Housing Finance Companies, Merchant Banking companies, Stock Brokers or Sub-Broker Companies, Nidhi Companies, etc.

Applicability of Ind-AS to Housing Finance Companies is not explicitly covered under the roadmap for banks, insurance companies and NBFCs. MCA is expected to clarify this position. The definition of net worth and dates for consideration of net worth have not been clarified by the MCA/regulators in the above roadmap.

The following are some of the amendments made in Ind AS:

Amendments in Ind AS	Applicable w.e.f	Key Changes
Format for Financial Statements		ICAI in its guidance note on Schedule III has carried out few changes in Division II for Ind AS companies
Ind AS 20 – Accounting for Government Grants	April 1, 2018	Option available to record non-monetary government grant and asset at a nominal amount.
Ind AS 115 – Revenue from Contracts with Customers	April 1, 2018	Establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Ind AS 115 has superseded the current revenue recognition standard Ind AS 18 – Revenue and Ind AS 11 - Construction Contracts.
Ind AS 21 – The Effect of Changes in Foreign Exchange Rates	April 1, 2018	Clarifies the accounting of transactions that include the receipt or payment of advance consideration in a foreign currency.
Ind AS 40 – Investment Property	April 1, 2018	The amendment lays down the principle regarding when a company should transfer asset to, or from, investment property : The amendment clarifies that a transfer is made when and only when: There is an actual change of use i.e. an asset meets or ceases to meet the definition of investment property and There is evidence of the change in use
Ind AS 116 – Leases	April 1, 2019	Ind AS 116 has replaced the existing leases Standard, Ind AS 17 Leases, and related interpretations. Ind AS 116 introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than twelve months, unless the underlying asset is of low value. It has enhanced disclosure requirements for lessees. For lessor, the requirements in Ind AS 116 and Ind AS 17 are same. The standard permits two possible methods of transition: Full retrospective Modified retrospective
Ind AS 12 – Income Taxes (Appendix C)	April 1, 2019	Appendix C, Uncertainty over Income Tax Treatments, has to be applied while performing the determination of taxable profit (or loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments.
Amendment to Ind AS 12 – Income Taxes (Appendix C)	April 1, 2019	The amendment clarifies that an entity shall recognise the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or events.
Amendment to Ind AS 19 – Employee Benefits	April 1, 2019	The amendments require an entity: To use updated assumptions to determine current service cost and net interest for the remainder of the period after a plan amendment, curtailment or settlement; and To recognize in profit or loss as part of past service cost, or a gain or loss on settlement, any reduction in surplus, even if that surplus was not previously recognized because of the impact of the asset ceiling.
Amendment to Ind AS 109 – Financial Instruments	April 1, 2019	The amendments relate to the existing requirements in Ind AS 109 regarding termination rights in order to allow measurement at amortised cost (or, depending on the business model, at fair value through other comprehensive income) even in the case of negative compensation payments.
Amendment to Ind AS 23 – Borrowing Costs	April 1, 2019	The amendments clarify that if any specific borrowing remains outstanding after the related asset is ready for its intended use or sale, that borrowing becomes part of the funds that an entity borrows generally when calculating the capitalization rate on general borrowings.
Amendment to Ind AS 28 – Investments in Associates and Joint Ventures	April 1, 2019	The amendments clarify that an entity applies Ind AS 109 Financial Instruments, to long-term interests in an associate or joint venture that form part of the net investment in the associate or joint venture but to which the equity method is not applied.
Amendments to Ind AS 103 – Business Combinations and Ind AS 111 – Joint Arrangements	April 1, 2019	The amendments to Ind AS 103 relating to re-measurement clarify that when an entity obtains control of a business that is a joint operation, it re-measures previously held interests in that business. The amendments to Ind AS 111 clarify that when an entity obtains joint control of a business that is a joint operation, the entity does not re-measure previously held interests in that business.
Additional Ind AS material	April 1, 2018	Ind AS – An overview (2018 edition) ICAI GN on accounting for Oil and Gas Producing Activities (Ind AS) Ind AS Transition Facilitation Group (IFTG) – 19 IFTGs issued so far Ind AS Educational Material Ind AS Disclosure Checklist Ind AS – Impact Analysis and Industry Experience

LIST OF IND AS

List of Ind-AS (alongwith relevant Appendix)

Ind AS 101 – First-time Adoption of Indian Accounting Standards

Appendix A Defined terms

Appendix B Exceptions to the retrospective application of other Ind ASs

Appendix C Exemptions for business combinations

Appendix D Exemptions from other Ind Ass

Appendix E Short-term exemptions from Ind ASs

Ind AS 102 – Share-based Payment

Appendix A Defined terms

Ind AS 103 – Business Combinations

Appendix A Defined terms

Appendix C Business combinations of entities under common control

Ind AS 104 – Insurance Contracts – effective for insurance companies from the date to be separately announced

Appendix A Defined terms

Appendix B Definition of an insurance contract

Ind AS 105 – Non-current Assets Held for Sale and Discontinued Operations

Appendix A Defined terms

Appendix B Extension of the period required to complete a sale

Ind AS 106 – Exploration for and Evaluation of Mineral Resources

Appendix A Defined terms

Ind AS 107 – Financial Instruments: Disclosures

Appendix A Defined terms

Appendix B Classes of financial instruments and level of disclosure

Ind AS 108 – Operating Segments

Appendix A Defined term

Ind AS 109 – Financial Instruments

Appendix A Defined terms

Appendix C Hedges of a Net Investment in a Foreign Operation

Appendix D Extinguishing Financial Liabilities with Equity Instruments

Ind AS 110 – Consolidated Financial Statements

Appendix A Defined terms

Ind AS 111 – Joint Arrangements

Appendix A Defined terms

Ind AS 112 – Disclosure of Interests in Other Entities

Appendix A Defined terms

Ind AS 113 – Fair Value Measurement

Appendix A Defined terms

Ind AS 114 – Regulatory Deferral Accounts

Appendix A Defined terms

Ind AS 115 – Revenue from Contracts with Customers (applicable w.e.f. April 1, 2018)

Appendix A Defined terms

Appendix D Service Concession Arrangements

Appendix E Service Concession Arrangements: Disclosures

Ind AS 116 – Leases (applicable w.e.f. April 1, 2019)

Appendix A Defined terms

Ind AS 1 – Presentation of Financial Statements

Ind AS 2 – Inventories

Ind AS 7 – Statement of Cash Flows

Ind AS 8 – Accounting Policies, Changes in Accounting Estimates and Errors

Ind AS 10 – Events after the Reporting Period

Appendix A Distribution of Non-cash Assets to Owners

Ind AS 11 – Construction Contracts (withdrawn w.e.f. April 1, 2018)

Ind AS 12 – Income Taxes

Appendix A Income Taxes – Changes in the Tax Status of an Entity or its Shareholders

Appendix C Uncertainty over Income Tax Treatments

Ind AS 16 – Property, Plant and Equipment

Appendix A Changes in Existing Decommissioning, Restoration and Similar Liabilities

Appendix B Stripping Costs in the Production Phase of a Surface Mine

Ind AS 17 – Leases (withdrawn w.e.f. April 1, 2019)

Appendix A Operating Leases—Incentives

Appendix B Evaluating the Substance of Transactions Involving the Legal Form of a Lease

Appendix C Determining whether an Arrangement contains a Lease

Ind AS 18 – Revenue (withdrawn w.e.f. April 1, 2018)

Ind AS 19 – Employee Benefits

Appendix B The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

Ind AS 20 – Accounting for Government Grants and Disclosure of Government Assistance

Appendix A Government Assistance – No Specific Relation to Operating Activities

Ind AS 21 – The Effects of Changes in Foreign Exchange Rates

Appendix B Foreign Currency Transactions and Advance Consideration

Ind AS 23 – Borrowing Costs

Ind AS 24 – Related Party Disclosures

Ind AS 27 – Separate Financial Statements

Ind AS 28 – Investments in Associates and Joint Ventures

Appendix A Illustrative Example – Long-term Interests in Associates and Joint Ventures

Ind AS 29 – Financial Reporting in Hyperinflationary Economies

Appendix A Applying the Restatement Approach under Ind AS 29 Financial Reporting in Hyperinflationary Economies

Ind AS 32 – Financial Instruments: Presentation

Ind AS 33 – Earnings Per Share

Ind AS 34 – Interim Financial Reporting

Appendix A Interim Financial Reporting and Impairment

Ind AS 36 – Impairment of Assets

Appendix A Using present value techniques to measure value in use

Appendix C Impairment testing cash-generating units with goodwill and non-controlling interests

Ind AS 37 – Provisions, Contingent Liabilities and Contingent Assets

Appendix A Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds

Appendix B Liabilities arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment

Appendix C Levies

Ind AS 38 – Intangible Assets

Appendix A Intangible Assets - Web Site Costs

Ind AS 40 – Investment Property

Ind AS 41 – Agriculture