In pursuance of the Budget statement the Ministry of Corporate Affairs, after wide consultations with various stakeholders and regulators, has drawn up a revised Road Map for companies other than Banking Companies, Insurance Companies and Non- Banking Finance Companies ( NBFC’s) for implementation of Indian Accounting Standards (Ind AS) converged with the International Financial Reporting Standards (IFRS)
This roadmap was developed after consultations with various stakeholders and regulators. It comes as a follow up to the announcement by the Finance Minister in his budget speech that Ind AS will be made mandatory from the financial year 2016-2017.
Overview of the revised roadmap
The MCA, through a press release, on 2 January 2015 issued a revised roadmap for companies other than banking companies, insurance companies and non -banking finance companies for implementation of Ind AS converged with IFRS.
The Ind AS shall be applicable to companies as follows:
On voluntary basis
For accounting periods beginning on or after 1 April 2015, with the comparatives for the periods ending 31 March 2015 or thereafter.
On mandatory basis
i. For accounting periods beginning on or after 1 April 2016, with comparatives for the periods ending 31 March 2016, or thereafter:
a. companies having net worth of INR500 crore or more whether their equity and/or debt securities are listed or otherwise
b. holding, subsidiary, joint venture or associate companies of the class of companies covered in (a) above.
i. For the accounting periods beginning on or after 1 April 2017, with comparatives for the periods ending 31 March 2017, or thereafter:
a. companies whose equity and/or debt securities are listed or are in the process of being listed on any stock exchange in India or outside India and having net worth of less than INR500 crore
b. unlisted companies having net worth of INR250 crore or more but less than INR500 crore
c. holding, subsidiary, joint venture or associate companies of the above class of companies.
Companies whose securities are listed or in the process of listing on the Small and Medium Enterprises (SME) exchanges will not be required to apply Ind AS and can continue to comply with the existing accounting standards unless they choose otherwise.
• Once a company opts to follow the Ind AS, it will be required to follow the Ind AS standards for all the subsequent financial statements.
• Companies not covered by the revised roadmap could continue to apply existing accounting standards prescribed in the Indian GAAP