What we offer?

  • Preparation of Accounting Policy in compliance with IND AS
  • Conversion of Opening Balancesheets
  • Impact Analysis on implementation of IND AS
  • Training to employees with respect to accounting and presentation as per IND AS
  • Implementation of IND AS in the Financial Statements
  • Preparation of Financials as per IND AS
  • Advisory and Consultation with respect to a particular IND AS

Process of IND AS Implimentation


The Ministry of Corporate Affairs has notified the Companies (Indian Accounting Standards) Rules 2015. These rules specify the obligation to comply with Indian Accounting Standards in the following phased manner:

Applicability will be checked on Standalone basis. Once applicable to one company it is applicable for Holding, Subsidiary, Associate company or Joint Venture


  • The requirements for presentation of financial statements are set out in Schedule III of Companies Act 2013.
  • Comparative figures are presented for one year.
  • Some items such as revaluation surplus which are treated as OCI in IND AS are directly recognised in equity
  • IND AS 1 does not include any illustrative format for presentation of financial statements. The ICAI has issued an exposure draft of the IND AS-compliant Schedule III.
  • Comparative figures are presented for one year. When a change in accounting policy has been applied retrospectively or items in financials are restated/reclassified, a balance sheet is required as at the beginning of the earliest period presented
  • An entity is required to present all items of income and expense including components of other comprehensive income in a period in a single statement of profit and loss
  • Cash Discounts received from Creditors are shown as Discount received in P&L
  • Subsequent upward and Downward Revaluation of Inventory Impacts Inventory.
  • Inventories purchased on deferred settlement terms are not explicitly dealt with in AS 2
  • Trade Discounts, rebates and other similar items are to be deducted in determining Cost of Purchases.
  • Initial downward revaluation and subsequent upward revaluation is to be reduced from Stock expense booked for the year in the year of upward revaluation.
  • Difference between the purchase price for normal credit period and the amount paid for deferred settlement terms is recognised as interest expense
  • Prior Period items are included in determination of profit or loss of the period in which the error was discovered
  • Does not consider Constructive Obligations
  • Prior Period items are corrected by restating the comparative amounts for prior periods presented in which the error occurred
  • Provisions for constructive obligations must be created
IND AS-16 Spare Parts and Servicing:
  • Currently spare parts are held as inventories and as and when it is consumed it is treated as Consumption.
  • Special Tools are held as Other Current Assets
  • Component Approach
  • Components which increases the capacity is capitalized
  • Fixed Assets are depreciated together with the all the major components
  • Dismantling Cost: Treated as Expense during the year incurred
  • Replacements: Are capitalised at cost
  • Derecognition: Derecognized when the asset is disposed
  • Spare Parts and Servicing: Major spare part, must be recognized as Property, Plant and Equipment
  • Component Approach: Components must be treated as a separate PPE and depreciation is charged as per the useful life of the component
  • Dismantling Cost: Estimation of the cost of dismantling must be done and added to cost of the Asset, for which depreciation will be charged along with the Asset
  • Replacements:
  • Carrying amount of the existing part replaced should be derecognized
  • New part must be recognized as per the Cost/Fair Value
  • Derecognition:
  • Can be derecognized on disposal
  • Derecognized when there are no future economic benefits
IND AS-17 Excluded Land Lease: Land Lease is included. Therefore, accounting treatment is similar to that of other leasehold items (operating and finance lease)
IND AS-18 Excise Duty: It is shown as a deduction from revenue Excise Duty:
  • This standard requires inclusion of excise duty in revenue.
  • Excise duty will be added to cost of raw material consumed.
IND AS-20 Non-monetary grants:
  • AS 12 requires that government grants in the form of nonmonetary assets, given at a concessional rate, should be accounted for on the basis of their acquisition cost.
  • • In case a non-monetary asset is given free of cost, it should be recorded at a nominal value
Non-monetary grants:
  • IND AS 20 requires to value non-monetary grants at their fair value, since it results into presentation of more relevant information and is conceptually superior as compared to valuation at a nominal amount.
IND AS-24 Post-employment benefit plans are not included as related parties Related Party includes post-employment benefit plans for the benefit of employees of the reporting entity or any entity that is related to the reporting entity
IND AS-33 No separate disclosure for EPS from continuing and discontinued operations Separate disclosure for EPS from continuing and discontinued operations

Provisions: Provisions are not recognised based on constructive obligations

Contingent Asset: Contingent assets are neither recognised nor disclosed in the financial statements.

  • Provisions for constructive obligations should also be recognised
  • A constructive obligation is an obligation that derives from an entity's actions where, by an established pattern of past practice, published policies or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain responsibilities; and as a result, the entity has created a valid expectation on the part of those other parties that it will discharge those responsibilities.
  • Contingent Asset: Contingent assets are not recognised but disclosed in the financial statements when an inflow of economic benefits is probable.
IND AS-38 Intangible Assets
  • Measurement: Measured only at cost.
  • Useful Life: Useful life of an intangible asset will not exceed ten years
Intangible Assets:
  • Measurement: Intangible assets can be measured at either cost or revalued amounts
  • Useful Life: Useful life may be finite or indefinite
IND AS-40 Investment Properties:
  • Definition: AS 13 defines investment property as an investment in land or buildings that are not intended to be occupied substantially for use by, or in the operations.
  • Measurement: Measured at cost less impairment
Investment properties:
  • Definition: Investment property is land or building (or part thereof) or both held (whether by owner or by a lessee under a finance lease) to earn rentals or for capital appreciation or both.
  • Measurement: Measured using the cost model. Fair value model is not permitted. Detailed disclosures pertaining to fair value must be given.
IND AS-101 Property, Plant and Equipment’s:
  • Entities have an option to use previous GAAP carrying values of property, plant and equipment, intangible assets and investment properties as on the date of transition as deemed cost under IND AS.
  • Non-Current Assets Held for Sale or discontinued Operations: Under IND AS 101, an entity may measure such assets or operations at the lower of carrying value and fair value less cost to sell
  • Leases: Also, if there is any land lease newly classified as finance lease then the first-time adopter may recognize assets and liability at fair value on the transition date; any difference between those fair values is recognised in retained earnings.

Roadmap or Planning

Planning is very important as it helps in completing the tasks in the timely manner and everything is well informed for taking actions. It also helps comply with SEBI by giving the reports/results on time.

Impact Analysis

The next step is to identify the differences, analyse the impact of the differences in the Financials Statements of the Company

Major changes that may impact in the Financials Statements of most of the company’s due to IND AS

IND AS 40:

Investment Property: Investment property is property (land or a building—or part of a building—or both) held (by the owner or by the lessee under a finance lease) to earn rentals or for capital appreciation or both.

Examples of Investment Property:

  • A building owned by the entity and leased out under one or more operating leases
  • A building that is vacant but is held to be leased out under one or more operating leases

Examples that are not Investment property:

  • Owner occupied property, which included property held for future use as owner occupied property
  • Property occupied by employees

Duel Use Properties:

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. For example, an office could be sub divided by the owner with some floors being rented to tenants while retaining others for own use.

IND AS 40 states that if the two portions could be sold separately, an entity should account for the portions separately. In the event that no separation is possible, the property is an investment property only if an insignificant proportion is used for non-investment property purposes.

IND AS 105:

Discontinued operations:


A component of an entity that either has been disposed of or is classified as held for sale


  • A single amount in the statement of profit or loss comprising the total of post-tax profit or loss of discontinued operations
  • Analysis of single amount into
    • The revenue, expense and pre-tax profit or loss of discontinued operations
    • The related income tax expense as

    The analysis shall be presented in the notes.

  • The net cash flows attributable to the operating, investing and financing activities of discontinued operations. These disclosers may be presented in notes or in Financial Statements

Non Current Assets Held for Sale

Conditions for classification of Non-Current Assets held for sale

  • It must be available for immediate sale in the present condition
  • Its sale must be highly probable
  • It must be genuinely be sold and not abandoned

If the Land and Building is held for the sale then it must be classified as Non-Current Assets held for Sale. Depreciation for the same must not be provided after it is decided that it is held for Sale. The value of Non-Current Asset held Sale shall be the carrying value or the fair value less cost of sales whichever is lower.

Liabilities associate with the above Asset will be also be disclosed separately on the face of Balance sheet.

IND AS 32:

Financial Assets: A financial asset is any asset that is:

  • cash;
  • an equity instrument of another entity;
  • a contractual right to receive cash or another financial asset from another entity

Financial Liabilities: A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another entity.

IND AS 109

As per IND AS the concept of provision for IND AS is changed and is computed as Expected Credit Loss. The below mentioned example illustrates the same:

Expected Credit Loss

An entity must frame a provision matrix (risk matrix) to estimate the Expected Credit Loss (ECL).

For example: ABC Ltd a manufacturer has a portfolio of trade receivables of Rs 6 Crores. ABC Ltd uses a provision matrix to estimate the ECL. The matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. Every year, the historically observed default rates are observed and changes in the estimates are analysed. ABC Ltd has the following provision matrix and calculated the ECL on its Trade receivables of Rs 6 Crores as follows:

Default Rate Gross carrying amount Lifetime expected Credit Loss (Gross carrying amount X Default Rate)
Current 0.3% 3,00,00,000 90,000
1-30 days past due 1.6% 1,50,00,000 2,40,000
31-60 days past due 3.6% 80,00,000 2,88,000
61-90 days past due 6.6% 50,00,000 3,30,000
More than 90 days past due 10.6% 20,00,000 2,12,000
Total 6,00,00,000 11,60,000

Preference Share Capital: As per IND AS 109 Preference Share Capital shall be classified either as Share Capital or as Financial Liability as per its nature. Ex: Convertible Preference Share is classified as Share Capital as after the expiry of the said period the shares are converted as equity shares which is part of Share Capital. If the Preference share capital is in the nature of finance like non-convertible redeemable preference share it will be classified as Financial Liability and disclosed separately in the face of Balance Sheet.

Preference Share Capital with below market rate of dividend: If Preference Share are issued with below market rate of dividends then the Equity portion and Financial Liability portion will be classified separately. The difference between the Fair Value of the Preference Share Capital and the carrying value will be the Equity Component. The Equity Component will be amortised over the period of the Preference Share Capital