Ind AS
Ind AS is India's set of accounting standards converged with IFRS, notified by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015. Converged, not identical: where Indian law or practice required it, the MCA departed from the international text, and those departures are called carve-outs.
The first thing to settle is whether any of it applies to you. Most private companies in India do not follow Ind AS at all. They follow the older Accounting Standards notified under the Companies (Accounting Standards) Rules, and nothing on the applicability roadmap below pulls them in. If you are a small or medium private company with no listed securities and no large group above you, the honest answer is usually that this page is background reading rather than an obligation.
For everyone else — listed companies, larger unlisted companies, and every company in their group — Ind AS is not an alternative presentation of the same numbers. It changes what goes on the balance sheet, when profit is recognised, and how much has to be explained in the notes.
This is a plain-language summary written for a general reader. It is not accounting advice, and it is not a substitute for the standards. Where this page and a standard differ, the standard governs; the authoritative text is published by ICAI and notified by the MCA. Every threshold, date and monetary limit mentioned here should be checked against the current MCA notification before you rely on it — the roadmap has been amended more than once, and separate roadmaps apply to banks, NBFCs and insurers. Take your auditor's view on anything that decides a treatment.
Do I even have to care?
Applicability follows a roadmap laid down by the MCA. It works on two tests taken together — whether the company's securities are listed, and what its net worth is — and then pulls in the rest of the group behind whichever company is caught. Once a company applies Ind AS it cannot go back to the earlier standards, even if it later falls below the threshold.
The structure below is stable and has been in force since the phased rollout began. The net worth figures are the ones in the notification as amended; they are stated here so the shape of the rule is visible, but confirm the current numbers, the reference date on which net worth is computed, and the wording of the group test against the MCA notification itself before you conclude anything about a particular company.
- Companies listed only on an SME exchange are excluded from the mandatory roadmap, though they may still adopt voluntarily — and having adopted, cannot revert. Check the current wording, since the exclusion is drafted narrowly.
- Net worth is computed as defined in the Companies Act and measured at a reference date fixed by the notification, not at whatever date is convenient. Getting the reference date wrong is the most common way a company decides it is out when it is in.
- The group test reaches upwards as well as downwards. A small subsidiary of a covered parent prepares Ind AS financial statements even though nothing about the subsidiary itself would have caught it.
- Everything outside the roadmap stays on the earlier Accounting Standards. That is the large majority of Indian companies by number.
- The Reserve Bank has separately introduced an expected-credit-loss basis for provisioning by banks. That is a prudential requirement layered on the existing framework and is not the same thing as adopting Ind AS — do not read one as implying the other.
- The set of standards is itself amended periodically, and a further presentation standard corresponding to the international IFRS 18 has been recommended but, at the time of writing, not notified. Check what is in force for the year you are reporting on.
| Who | From | The test |
|---|---|---|
| Voluntary adopters | Financial year 2015-16 | Any company could adopt early, and having done so could not revert |
| Phase I | Financial years beginning on or after 1 April 2016 | Listed or in the process of listing, and unlisted companies, with net worth at or above the higher threshold — Rs 500 crore in the notification as amended; verify |
| Phase II | Financial years beginning on or after 1 April 2017 | All listed companies, or those in the process of listing, whatever their net worth; and unlisted companies at or above the lower threshold — Rs 250 crore in the notification as amended; verify |
| Group companies | With the covered company | Holding, subsidiary, joint venture and associate companies of a company caught by either phase are pulled in with it |
| NBFCs | A separate roadmap, phased from financial year 2018-19 | Net-worth thresholds mirroring the two phases, with listing bringing a company into the later phase — check the NBFC notification for the dates and figures |
| Scheduled commercial banks | Deferred | The Reserve Bank has deferred implementation; banks continue under the existing framework until it directs otherwise |
| Insurers and reinsurers | Its own timetable, set by IRDAI | Long deferred, but the sector now has a notified path built on Ind AS 117 and Ind AS 109 — confirm the effective date, the scope and any forbearance window with IRDAI and the current MCA notification |
Every figure and date in this section must be checked against the current MCA notification. The roadmap has been amended, the NBFC roadmap is a separate instrument with its own dates, and the bank and insurer positions depend on regulators who have moved their timelines before.
AS versus Ind AS — what actually changes
The older standards are largely historical cost and largely rule-driven. Ind AS keeps historical cost as a starting point but reaches for fair value far more often, asks the preparer to look through the legal form of a transaction to its economic substance, and routes a class of gains and losses around the profit and loss account entirely.
Four shifts account for most of the difference a finance team notices in the first year.
- Fair value. Financial assets, contingent consideration in an acquisition, share-based payments and biological assets are measured at fair value rather than cost, with Ind AS 113 supplying a single definition and a disclosure hierarchy. Earnings become more volatile because remeasurement is reported, not deferred.
- Substance over form. Consolidation follows control rather than shareholding; a lease is judged by whether the customer directs the use of an identified asset; a preference share carrying an unavoidable obligation to pay cash is a liability however it is named. The legal document stops being the last word.
- Other comprehensive income. Actuarial gains and losses on defined benefit plans, the translation of a foreign operation, and certain financial asset remeasurements go to OCI rather than profit. Some of those amounts are later recycled to profit and some never are, so total comprehensive income and profit for the year become two genuinely different numbers.
- Disclosure. The volume goes up substantially — judgements made, estimation uncertainty, fair value hierarchy levels, financial risk with sensitivity analysis, segment information on the management basis, and detailed related party and group disclosures. In practice the notes are where most of the first-year effort actually goes.
Transition — Ind AS 101 in outline
A company does not start applying Ind AS on the first day of its first Ind AS year. It reaches back a year and rebuilds. Ind AS 101 governs that one-off exercise, and it applies once.
The mechanics turn on three ideas. The date of transition is the beginning of the earliest period for which full comparative information is presented — for a company whose first Ind AS financial statements are for a year, that is the first day of the preceding year. At that date the company prepares an opening Ind AS balance sheet, applying the standards in force at its reporting date: items that Ind AS requires are recognised even if the earlier standards did not, items the earlier standards carried but Ind AS does not are removed, everything remaining is reclassified and remeasured, and the net effect goes to retained earnings or another appropriate component of equity rather than through profit.
The comparative year is then restated on the same basis. The result is a first Ind AS annual report carrying two Ind AS balance sheets — the opening one at the date of transition and the closing one — plus a restated comparative profit and loss account, together with reconciliations showing how equity and total comprehensive income moved from the earlier standards to Ind AS. Those reconciliations are usually the most scrutinised pages in the document.
- Mandatory exceptions prohibit retrospective application where hindsight would distort the result — estimates, for instance, are not revisited with what is known now.
- Optional exemptions relieve areas where full retrospection would be disproportionate. The most widely used lets a company carry the previous carrying amount of property, plant and equipment forward as deemed cost, rather than reconstructing depreciation from acquisition.
- Exemptions are choices, and they are disclosed. Two companies transitioning in the same year with the same assets can report visibly different fixed asset numbers because they chose differently.
Transition is a project with a long lead time, not a year-end adjustment. The opening balance sheet has to be built from records covering a period that was already closed and audited under the earlier standards.
40 of 40 standards
| Standard | What it governs | What it requires | IFRS / IAS |
|---|---|---|---|
| Presentation and general reporting | |||
| Ind AS 1Presentation of Financial Statements | What a complete set of financial statements is, and how it is laid out. | Sets the overall structure — balance sheet, statement of profit and loss including other comprehensive income, statement of changes in equity, cash flow statement and notes, with comparatives. Requires the going concern and accrual bases, consistency of presentation, and separate presentation of material items. Fixes the current and non-current split and the disclosure of judgements and estimation uncertainty. | IAS 1 |
| Ind AS 7Statement of Cash Flows | How cash movements are reported, split by the activity that caused them. | Cash flows are classified as operating, investing or financing, and the statement reconciles to cash and cash equivalents at both ends of the period. Operating flows may be presented directly or by adjusting profit for non-cash items and working capital movements. Also requires a reconciliation of movements in liabilities arising from financing activities, which is what makes debt movements traceable. | IAS 7 |
| Ind AS 8Accounting Policies, Changes in Accounting Estimates and Errors | Choosing policies, and what to do when a policy, an estimate or a past figure changes. | A policy change is applied retrospectively, restating comparatives as though the new policy had always been used, unless a standard says otherwise. A change in estimate is applied prospectively — no restatement. A material prior period error is corrected retrospectively, and the distinction between an error and a revised estimate decides which of the two treatments applies. | IAS 8 |
| Ind AS 10Events after the Reporting Period | Events between the balance sheet date and the date the accounts are approved. | Splits such events into those that give evidence of a condition existing at the reporting date, which are adjusted into the numbers, and those about conditions that arose afterwards, which are only disclosed. A customer's insolvency shortly after year end usually confirms a debt was already doubtful; a fire in the new year does not change the old year's assets. Dividends declared after the reporting date are not a liability at that date. | IAS 10 |
| Ind AS 21The Effects of Changes in Foreign Exchange Rates | Translating foreign currency transactions and foreign operations. | Transactions are recorded at the rate on the transaction date; at each reporting date monetary items are retranslated at the closing rate and the difference goes to profit or loss, while non-monetary items carried at cost stay at the historical rate. A foreign operation with a different functional currency is translated using closing rates for assets and liabilities and average rates for income, with the difference accumulated in equity through other comprehensive income. Determining the functional currency is a judgement, not a choice. | IAS 21 |
| Ind AS 24Related Party Disclosures | Who counts as a related party, and what must be told about dealings with them. | Requires disclosure of relationships between a parent and its subsidiaries even where there were no transactions, and of the amount, terms and outstanding balances of transactions with related parties. Key management personnel compensation is disclosed by category — short term, post-employment, other long term, termination and share-based. Disclosure is required whether or not the transaction was at arm's length; the standard does not permit a claim of arm's length pricing unless it can be substantiated. | IAS 24 |
| Ind AS 33Earnings per Share | Computing and presenting basic and diluted earnings per share. | Basic EPS is profit attributable to ordinary equity holders over the weighted average number of shares outstanding. Diluted EPS additionally assumes conversion of all dilutive potential shares — options, convertible instruments and contingently issuable shares. Bonus issues, share splits and rights issues require restatement of every period presented, so that the series stays comparable. | IAS 33 |
| Ind AS 34Interim Financial Reporting | The minimum content and the measurement basis of an interim report. | Permits condensed statements with selected explanatory notes, on the same accounting policies as the annual accounts. Measurement follows a discrete-period view for most items, so an interim period is not simply an annual figure apportioned; income tax, however, is accrued using the expected effective rate for the full year. Materiality is judged against the interim figures, not the annual ones. | IAS 34 |
| Ind AS 108Operating Segments | Reporting the business the way management actually runs it. | Segments are identified from the internal reports that the chief operating decision maker reviews — the management approach, rather than a classification invented for the accounts. Segment revenue, profit, assets and liabilities are disclosed on the same basis management sees them, with a reconciliation to the reported totals. Also requires entity-wide disclosures about products, geographies and reliance on major customers. | IFRS 8 |
| Ind AS 113Fair Value Measurement | What fair value means and how it is measured, wherever another standard requires it. | Defines fair value as an exit price in an orderly transaction between market participants at the measurement date, not an entity-specific or forced-sale value. Establishes the three-level hierarchy — quoted prices in active markets, other observable inputs, and unobservable inputs — and requires disclosure of where each measurement sits. It does not decide what is measured at fair value; it decides how, once another standard has said so. | IFRS 13 |
| Assets | |||
| Ind AS 2Inventories | What inventory costs include, and the floor its carrying amount cannot exceed. | Inventory is carried at the lower of cost and net realisable value, item by item rather than in aggregate. Cost includes purchase, conversion and the costs of bringing inventory to its present location and condition; it excludes abnormal waste, most storage, and selling costs. Cost formulas are first-in-first-out or weighted average — LIFO is not permitted. | IAS 2 |
| Ind AS 16Property, Plant and Equipment | Recognising, componentising, depreciating and revaluing tangible fixed assets. | An asset is recognised at cost including directly attributable costs and the estimated cost of dismantling and restoring the site. Parts of an asset with a significantly different useful life are depreciated separately, which is the componentisation requirement. After recognition an entity chooses cost or revaluation as its policy for a whole class, and residual value, useful life and depreciation method are reviewed at least at each year end. | IAS 16 |
| Ind AS 23Borrowing Costs | When interest becomes part of the cost of an asset rather than an expense. | Borrowing costs directly attributable to acquiring, constructing or producing a qualifying asset — one that necessarily takes a substantial period to get ready for its intended use or sale — are capitalised as part of its cost. For specific borrowings, actual costs less income earned on temporary investment of the funds; for general borrowings, a capitalisation rate applied to the expenditure. Capitalisation starts when expenditure and activity both begin, is suspended during extended interruptions, and ceases when the asset is substantially ready. | IAS 23 |
| Ind AS 36Impairment of Assets | Making sure an asset is not carried above what it can actually recover. | At each reporting date an entity looks for indicators of impairment, and where they exist compares carrying amount to recoverable amount — the higher of fair value less costs of disposal and value in use. Goodwill and indefinite-life intangibles are tested annually whether or not there is an indicator. Where an asset does not generate independent cash inflows, the test is done at the level of the cash-generating unit; impairments other than those on goodwill may be reversed if the estimates that caused them change. | IAS 36 |
| Ind AS 38Intangible Assets | Which intangibles go on the balance sheet, and how they are amortised. | An intangible is recognised only if it is identifiable, controlled, and expected to generate future economic benefits whose cost can be measured reliably. Research is expensed; development is capitalised only once specified criteria on feasibility, intention and resources are all met. Internally generated goodwill, brands, mastheads and customer lists cannot be recognised; assets with a finite life are amortised, and those with an indefinite life are not amortised but are tested for impairment annually. | IAS 38 |
| Ind AS 40Investment Property | Land and buildings held for rentals or capital appreciation rather than for use. | Property held to earn rentals or for appreciation is separated from owner-occupied property under Ind AS 16 and from property held for sale in the ordinary course under Ind AS 2. Ind AS 40 permits only the cost model for subsequent measurement, unlike IAS 40 which also allows the fair value model — but fair value must still be disclosed. Transfers into and out of the category are made only when there is a change in use evidenced by something more than management's intention. | IAS 40 |
| Ind AS 105Non-current Assets Held for Sale and Discontinued Operations | Assets and businesses on their way out, and how they are shown until they go. | An asset or disposal group is classified as held for sale when it is available for immediate sale in its present condition and the sale is highly probable; it is then measured at the lower of carrying amount and fair value less costs to sell, and depreciation stops. Held-for-sale assets and liabilities are presented separately on the face of the balance sheet. A discontinued operation — a separate major line of business or geographical area — is reported as a single amount in profit or loss, with comparatives re-presented. | IFRS 5 |
| Ind AS 116Leases | Bringing leases onto the balance sheet of the lessee.Replaced Ind AS 17. The low-value exemption is described qualitatively — the standard's own text sets no rupee or dollar limit. | A lessee recognises a right-of-use asset and a lease liability for substantially all leases, ending the old operating and finance lease split for lessees. The liability is the present value of unpaid lease payments; the asset is depreciated and the liability unwound as interest, so a single straight-line rent expense becomes front-loaded depreciation plus interest. Optional exemptions exist for short-term leases and for leases of low-value assets; lessor accounting is largely unchanged and still distinguishes finance from operating leases. | IFRS 16 |
| Liabilities, provisions and taxes | |||
| Ind AS 12Income Taxes | Current tax, and deferred tax on the difference between book and tax carrying amounts. | Deferred tax is computed on the balance sheet approach — temporary differences between the carrying amount of an asset or liability and its tax base — rather than on timing differences in the profit and loss account. Deferred tax assets, including those from unused losses and credits, are recognised only to the extent future taxable profit is probable. Tax follows the item it relates to, so tax on a gain routed through other comprehensive income is itself presented there. | IAS 12 |
| Ind AS 37Provisions, Contingent Liabilities and Contingent Assets | When an uncertain obligation becomes a liability in the accounts. | A provision is recognised when there is a present obligation from a past event, an outflow is probable, and the amount can be reliably estimated; otherwise the item is a contingent liability and is only disclosed. The amount is the best estimate of the expenditure required to settle, discounted where the effect of the time value of money is material. Contingent assets are not recognised and are disclosed only when an inflow is probable; provisions for future operating losses are not permitted, and restructuring provisions require a detailed formal plan and a valid expectation raised in those affected. | IAS 37 |
| Revenue, grants and employee benefits | |||
| Ind AS 19Employee Benefits | Accounting for everything owed to employees, from leave encashment to pensions. | Short-term benefits are accrued undiscounted as service is rendered. Defined contribution plans are simply an expense as contributions fall due, while defined benefit plans require an actuarial valuation using the projected unit credit method, with the net defined benefit liability being the present value of the obligation less plan assets. Service cost and net interest go to profit or loss, but remeasurements — actuarial gains and losses and the return on plan assets beyond interest — go to other comprehensive income and are never recycled. | IAS 19 |
| Ind AS 20Accounting for Government Grants and Disclosure of Government Assistance | Grants, subsidies and other assistance received from government. | A grant is recognised only when there is reasonable assurance the conditions will be met and the grant will be received, and is then matched with the costs it is intended to compensate. Grants related to income are presented as income or netted against the related expense; grants related to assets are presented as deferred income, and Ind AS 20 does not permit the alternative of deducting the grant from the asset's carrying amount. A non-monetary grant is accounted for at fair value. | IAS 20 |
| Ind AS 102Share-based Payment | The cost of paying people in shares or in amounts linked to share price. | Equity-settled awards are measured at the fair value of the instruments granted at grant date and charged over the vesting period, with a corresponding credit in equity — the charge is not reversed for a fall in share price. Cash-settled awards create a liability remeasured to fair value at every reporting date until settlement. Market-based vesting conditions are built into the grant-date fair value, while service and non-market performance conditions are handled by revising the number of awards expected to vest. | IFRS 2 |
| Ind AS 115Revenue from Contracts with Customers | When revenue is recognised, and how much of it.Replaced the earlier separate treatment of revenue and construction contracts. | A single five-step model: identify the contract, identify the distinct performance obligations, determine the transaction price, allocate it to the obligations on relative standalone selling prices, and recognise revenue as each obligation is satisfied. Variable consideration — discounts, rebates, penalties, refunds — is estimated and constrained so that a significant reversal is not probable. Revenue is recognised over time only where specified criteria are met, otherwise at the point control transfers; the standard also brings contract assets, contract liabilities and capitalised contract costs onto the balance sheet. | IFRS 15 |
| Financial instruments | |||
| Ind AS 32Financial Instruments: Presentation | Whether an instrument is a liability or equity, and when amounts may be offset. | Classification follows the substance of the contractual arrangement rather than its legal form, so an instrument carrying an unavoidable obligation to deliver cash is a liability even if it is called a share. Compound instruments such as convertible debentures are split into their liability and equity components at issue. A financial asset and a financial liability are offset only where there is a legally enforceable right of set-off and an intention to settle net; treasury shares are deducted from equity, and no gain or loss on them reaches profit. | IAS 32 |
| Ind AS 107Financial Instruments: Disclosures | Telling the reader what the financial instruments are and what risk they carry. | Requires disclosure of the significance of financial instruments for financial position and performance — carrying amounts by category, fair values, and items of income and expense. Also requires qualitative and quantitative disclosure of credit risk, liquidity risk and market risk, including how each is managed. Credit risk disclosure extends to the expected credit loss allowance, its movements and the basis on which it was estimated, and market risk requires sensitivity analysis. | IFRS 7 |
| Ind AS 109Financial Instruments | Classifying, measuring and impairing financial assets and liabilities, and hedge accounting. | Financial assets are classified by the entity's business model and the contractual cash flow characteristics into amortised cost, fair value through other comprehensive income, or fair value through profit or loss. Impairment is forward-looking: an expected credit loss allowance is recognised from initial recognition, at twelve-month losses, moving to lifetime losses when credit risk has increased significantly, with a simplified lifetime approach available for trade receivables. Hedge accounting is aligned to risk management, and an entity's own credit risk on liabilities designated at fair value is presented in other comprehensive income. | IFRS 9 |
| Group accounts and business combinations | |||
| Ind AS 27Separate Financial Statements | How investments in subsidiaries, associates and joint ventures appear in the parent's own accounts. | Applies to the standalone financial statements a parent presents in addition to consolidated ones. Such investments are carried at cost, or in accordance with Ind AS 109, or using the equity method, with the policy applied consistently by category. Dividends from these investments are recognised in profit or loss in the separate statements when the right to receive is established. | IAS 27 |
| Ind AS 28Investments in Associates and Joint Ventures | The equity method, for investments carrying significant influence or joint control. | Significant influence is presumed from a holding of a fifth or more of the voting power, and rebutted only with clear evidence; it can also exist below that through board representation or participation in policy decisions. The investment starts at cost and is then adjusted for the investor's share of post-acquisition profits, losses and other comprehensive income, with dividends reducing the carrying amount. Losses are recognised only down to the carrying amount unless the investor has obligations beyond it, and the whole investment is tested for impairment as a single asset. | IAS 28 |
| Ind AS 103Business Combinations | Accounting for an acquisition, and for the goodwill it creates. | Requires the acquisition method: identify the acquirer, fix the acquisition date, recognise the identifiable assets acquired and liabilities assumed at fair value, and recognise goodwill or a bargain purchase gain. Contingent consideration is measured at fair value at acquisition, with subsequent changes usually going through profit or loss; acquisition-related costs are expensed rather than capitalised. Goodwill is not amortised and is instead tested for impairment annually, and there is a measurement period during which provisional amounts may be finalised. | IFRS 3 |
| Ind AS 110Consolidated Financial Statements | Which entities are consolidated, and how. | Control is the single basis for consolidation, and rests on three elements together — power over the investee, exposure to variable returns, and the ability to use that power to affect those returns. A majority of votes is neither necessary nor always sufficient; potential voting rights and de facto control are considered. Consolidation is line by line with intragroup balances and transactions eliminated, uniform accounting policies, and non-controlling interests presented within equity separately from the owners of the parent. | IFRS 10 |
| Ind AS 111Joint Arrangements | Arrangements under joint control, and which of the two forms they take. | A jointly controlled arrangement is either a joint operation, where the parties have rights to the assets and obligations for the liabilities, or a joint venture, where they have rights to the net assets. A joint operator recognises its own share of assets, liabilities, revenue and expenses directly. A joint venturer applies the equity method under Ind AS 28; proportionate consolidation is not available. | IFRS 11 |
| Ind AS 112Disclosure of Interests in Other Entities | What must be disclosed about subsidiaries, associates, joint arrangements and unconsolidated structured entities. | Collects in one place the disclosures about the group's composition and the judgements made in deciding control, joint control and significant influence. Requires summarised financial information for material subsidiaries with significant non-controlling interests, and for material associates and joint ventures. Also requires disclosure of the nature and extent of risks arising from interests in structured entities, including those not consolidated. | IFRS 12 |
| First-time adoption | |||
| Ind AS 101First-time Adoption of Indian Accounting Standards | The one-off move from the previous standards to Ind AS. | An entity fixes a date of transition — the beginning of the earliest period for which full comparatives are presented — and prepares an opening balance sheet at that date applying the Ind AS in force at the reporting date, recognising and derecognising items as those standards require and taking the net effect to retained earnings or another appropriate component of equity. Comparative figures are restated on the same basis, so the transition year presents two Ind AS balance sheets and one restated comparative period. The standard supplies mandatory exceptions, where retrospective application is prohibited, and optional exemptions, where it would be onerous — including the widely used option to carry forward the previous carrying amount of property, plant and equipment as deemed cost — and requires reconciliations of equity and total comprehensive income from the previous standards to Ind AS. | IFRS 1 |
| Sector-specific and rarely encountered | |||
| Ind AS 29Financial Reporting in Hyperinflationary Economies | Restating accounts where the functional currency is that of a hyperinflationary economy.Rarely encountered — relevant only to entities with operations in a hyperinflationary economy. | Where an economy is hyperinflationary, the financial statements are restated into the measuring unit current at the reporting date using a general price index, and the gain or loss on the net monetary position is recognised in profit or loss. The standard sets out indicators of hyperinflation rather than a single trigger. It bites in practice only where a group has an operation in such an economy. | IAS 29 |
| Ind AS 41Agriculture | Biological assets and produce harvested from them.Applies only to agricultural activity. | Biological assets are generally measured at fair value less costs to sell, with changes recognised in profit or loss, which brings unrealised gains from growth into earnings. Agricultural produce is measured the same way at the point of harvest and then becomes inventory under Ind AS 2. Bearer plants are outside this standard and are accounted for as property, plant and equipment under Ind AS 16, though the produce growing on them stays here. | IAS 41 |
| Ind AS 104Insurance Contracts | Superseded — the interim standard for contracts under which one party accepts significant insurance risk from another.Superseded by Ind AS 117. Confirm the effective dates and any transitional relief against the current MCA notification. | An interim standard rather than a complete model: it largely permitted existing practices for insurance contracts to continue, while requiring a liability adequacy test, prohibiting certain provisions such as catastrophe and equalisation reserves, and requiring disclosure of the amounts and risks arising from insurance contracts. It has since been omitted from the Companies (Indian Accounting Standards) Rules and replaced by Ind AS 117, mirroring the international replacement of IFRS 4 by IFRS 17. It is kept in this list only because a reader will still meet it in older financial statements and in commentary written before the change. | IFRS 4 |
| Ind AS 106Exploration for and Evaluation of Mineral Resources | Spending on searching for and evaluating mineral, oil and gas resources.Extractive industries only. | Allows an entity to continue its existing accounting policy for exploration and evaluation expenditure, subject to consistency, rather than imposing a single model. Such assets are classified as tangible or intangible according to their nature and are tested for impairment when facts suggest the carrying amount may not be recovered, and always before reclassification once technical feasibility and commercial viability are demonstrable. It does not address expenditure before the legal right to explore is obtained, or development and production once viability is established. | IFRS 6 |
| Ind AS 114Regulatory Deferral Accounts | Rate-regulated balances carried forward under a previous set of standards.Optional, and only for first-time adopters who already carried such balances — most entities never apply it. | Available only to a first-time adopter that recognised regulatory deferral account balances under its previous standards; an entity that did not cannot start under this standard. Those who qualify may continue their previous policy for such balances, presenting them as separate line items on the balance sheet and in profit or loss so a reader can see the effect of removing them. Extensive disclosure of the nature of the rate regulation and the risks attaching to the balances is required. | IFRS 14 |
| Ind AS 117Insurance Contracts | The measurement model for insurance and reinsurance contracts.Insurance sector only. Check the MCA notification and the IRDAI regulations for the effective date and any transitional relief. | Replaces the interim approach of Ind AS 104 with a single model: groups of insurance contracts are measured as the present value of expected future cash flows, plus a risk adjustment for non-financial risk, plus a contractual service margin representing unearned profit that is released to income as service is provided. A simplified premium allocation approach is available for short-duration contracts, and onerous groups are recognised as a loss immediately. It changes both the pattern of insurer profit and the shape of the insurer's income statement, which no longer opens with written premium. | IFRS 17 |
The handful that change the numbers most
The list above runs to forty entries, but in most companies five of them account for the bulk of the difference between an AS profit and an Ind AS profit.
Ind AS 115, revenue from contracts with customers. Revenue is recognised by working through five steps — identify the contract, identify the distinct performance obligations in it, determine the transaction price, allocate that price across the obligations on relative standalone selling prices, and recognise revenue as each obligation is satisfied. The consequences show up wherever a contract bundles things: hardware sold with installation and a support period is no longer one revenue event, and a discount on the bundle is spread across its parts. Variable consideration — rebates, volume discounts, penalties, expected returns — is estimated up front and constrained so that a later reversal is not probable, which is a real change for anyone who previously recognised gross and adjusted when the claim arrived.
Ind AS 116, leases. For the lessee the operating lease disappears as a category. Almost every lease produces a right-of-use asset and a lease liability on the balance sheet, measured at the present value of the unpaid lease payments. Rent, which used to be one straight-line expense, becomes depreciation on the asset plus interest on the liability — so total charges are higher in the early years and lower later, and EBITDA rises simply because rent has moved below it. A retailer or a logistics business with a long lease portfolio can see its balance sheet total and its gearing ratio change materially with no commercial event behind it.
Ind AS 109, financial instruments. Financial assets are classified by the business model under which they are held and by the nature of their contractual cash flows, which determines whether they sit at amortised cost, at fair value through other comprehensive income, or at fair value through profit or loss. The change most companies feel is impairment: the expected credit loss model requires a loss allowance from the day a receivable is recognised, based on what is expected to happen, rather than waiting for evidence that a specific customer has gone bad. For trade receivables a simplified lifetime approach is available, typically implemented as a provision matrix built from the entity's own ageing and historical loss experience, adjusted for what is expected ahead.
Ind AS 16, property, plant and equipment. The requirement that bites is componentisation: where a part of an asset has a cost significant in relation to the whole and a useful life different from it, that part is depreciated separately. An aircraft's engines, a building's lifts and air-conditioning plant, the lining of a furnace — each becomes its own depreciable unit with its own life, and its replacement is capitalised while the carrying amount of the part replaced is derecognised. The standard also brings the estimated cost of dismantling and site restoration into the asset's cost at the outset, with a matching provision.
Ind AS 36, impairment of assets. At each reporting date the company looks for indicators that an asset is carried above what it can recover, and where indicators exist compares carrying amount with recoverable amount, being the higher of fair value less costs of disposal and value in use. Goodwill and indefinite-life intangibles are tested every year regardless. Where an asset does not generate cash inflows on its own, the test moves up to the cash-generating unit that does — which is why an impairment discussion usually turns into an argument about how the business is divided rather than about the asset.
Where AS and Ind AS most visibly diverge
A short list of the differences a finance manager is most likely to meet, stated as the direction of travel rather than as a complete comparison.
| Area | Broadly, under AS | Under Ind AS |
|---|---|---|
| Operating leases (lessee) | Rent charged to profit on a straight-line basis; nothing on the balance sheet | A right-of-use asset and a lease liability recognised, with depreciation and interest replacing rent |
| Revenue on bundled contracts | Recognised on transfer of significant risks and rewards, often for the contract as a whole | Allocated across distinct performance obligations and recognised as each is satisfied |
| Receivable provisions | Provided when a loss event has occurred and the debt is identified as doubtful | An expected credit loss allowance from initial recognition, forward-looking |
| Consolidation trigger | Driven principally by ownership of voting power and composition of the board | Driven by control — power, exposure to variable returns, and the ability to use the power to affect them |
| Actuarial gains and losses | Recognised in profit or loss | Recognised in other comprehensive income and never recycled to profit |
| Deferred tax | Computed on timing differences in the profit and loss account | Computed on temporary differences between carrying amounts and tax bases, on the balance sheet |
| Goodwill on acquisition | Amortised over its useful life | Not amortised; tested for impairment at least annually |
| Depreciation of fixed assets | Usually applied to the asset as a whole | Significant components with different useful lives depreciated separately |
| Preference shares with a fixed redemption | Presented within shareholders' funds by legal form | Classified as a financial liability where the obligation to deliver cash is unavoidable |
| Proposed dividend | Historically provided for at the reporting date | Not a liability until declared; disclosed only |
This table shows the direction of a difference, not its full extent. Several of these areas carry Indian carve-outs from the corresponding IFRS, and a treatment that is right for one contract can be wrong for another with slightly different terms.
Two things worth not repeating
Ind AS 116 offers a lessee an optional exemption for leases of low-value assets, letting the payments be expensed instead of capitalised. The standard describes low value qualitatively — by reference to the value of the underlying asset when new, judged absolutely rather than against the size of the lessee — and its own text contains no rupee or dollar figure. A specific amount is widely quoted in commentary because it appears in the international board's non-mandatory background material, not in the standard. Treat it as an indication of magnitude that somebody else found useful, and set the policy on the standard's own wording.
The short-term lease exemption is a separate one, and is drawn by lease term rather than by asset value. It is applied by class of underlying asset, while the low-value exemption is applied lease by lease.
No paragraph numbers appear anywhere on this page, deliberately. Cite the standard by number and title, and take the wording from the notified text rather than from a summary — including this one.