Financial Accounting Concepts

What are Ind-ASs and When They Are Applicable?

What is an Ind-AS?

An IND-AS is an accounting standard prepared in India in compliance with IFRS. IND AS is currently tracked by all listed firms and those unlisted companies whose net worth is more than equal to 250 crores.

Indian Accounting Standards (abbreviated as Ind-AS) in India accounting standards were established under the supervision and control of the Accounting Standards Board (ASB), which was constituted as a body in the year 1977.


The Ind AS are called and numbered in the same way as the relevant International Financial Reporting Standards (IFRS) (IFRS). National Advisory Committee on Accounting Standards (NACAS) suggest these standards to the Ministry of Corporate Affairs (MCA). MCA has to explain the accounting rules relevant to enterprises in India.

As of date, MCA has notified 39 Ind AS. This shall be applied to the companies of the financial year 2015-16 freely and from 2016-17 on a required basis. On 25 February 2011, the Ministry of Corporate Affairs notified 35 Accounting Standards that have been synchronised with IFRS. Although in the longer run, India wants to converge all its Ind-AS with IFRS, in the short run there are some significant discrepancies between Ind-AS and IFRS, a few important ones being emphasised in this article.

Applicability of Ind-ASs

The financial year 2016-17 has been a year of a significant shift in the financial reporting environment in India.

From 1 April 2016, Indian Accounting Standards (Ind AS), converged with International Financial Reporting Standards (IFRS) is a new accounting norm for listed and unlisted enterprises with a net worth in excess of Rs. 500 crores (phase I) (phase I). As per certain estimates, around 350 companies/groups, covered in phase I of the Ind AS roadmap, have presented their interim financial statements under Ind AS.

There exists a limited number of exemptions to the mandatory utilisation of Indian Accounting Standards (Ind-ASs). For instance, it is not mandatory for small and medium-sized firms (SMEs) to use Ind-ASs. Nevertheless, individuals are motivated to engage in such behaviour.

From 1 April 2017, approximately 8,500 Indian companies, i.e., balance listed companies and, unlisted enterprises having a net worth in excess of Rs. 250 crores, would be covered by Ind-AS (phase II) which is about 25 times the number of companies covered in Phase I.

Ind AS offers numerous new concepts and several standards are rather complicated. Therefore, it would be fitting for these Ind AS phase II enterprises to draw on the learning and experiences of bigger phase I companies.


The ASB develops IndAS (Indian Accounting Standards) in an attempt to reconcile IAS and IFRS with India’s applicable laws, customs, and business environment. As a result, we are not considered to have accepted IFRS but rather to be convergent with it.

Currently, Ind AS are not applicable to all business organisations in India, based on a number of conditions. While the remaining entities are subject to existing national GAAP, i.e. Accounting Standards as announced by the Companies Accounting Standards Rules, 2006.

In general, the adoption of Indian Accounting Standards (Ind-ASs) represents a favourable advancement for the Indian economy. The anticipated outcome is the enhancement of competitiveness among Indian enterprises and the attraction of increased international investment.

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