Ind AS Practices Demystified - 2nd Edition

Ind AS Practices Demystified - 2nd Edition

Ind AS Practices Demystified - 2nd Edition By CA Santosh Maller

Need for the book
With effect from 1 April 2016, Indian Accounting Standards (Ind AS), is new accounting norm for listed and unlisted companies with net worth in excess of Rs 500 crore (phase I). As per some estimates, approximately 370 companies/groups, covered in phase I of Ind AS roadmap, have applied Ind AS in financial year 2016-17. With effect from financial years beginning from 1 April 2017, remaining listed companies and those with net worth in excess of Rs. 250 crores (phase I) would be applying Ind AS.

Further, on 28 March, 2018, the Ministry of Corporate Affairs (MCA) issued Companies (Indian Accounting Standards) Amendment Rules, 2018 which amended the Ind AS standards and issued new Ind AS standards. These amendments and new standards are effective from financial year beginning from 1 April, 2018. The new/ revised Ind AS standards/ appendices include: Ind AS 115 Revenue from Contracts with Customers including consequential amendments to other Ind AS standards; Appendix B, Foreign Currency Transactions and Advance Consideration to Ind AS 21 The Effects of Changes in Foreign Exchange Rates; and amendments to a few other standards.

Ind AS transition had significant impact on, not only, the financial results of many of these companies, but has also caused far reaching consequential business impact. Many companies reported a change in their key financial ratios, such as earnings per share, price-earnings ratio, return on capital employed and gross margin ratio. The new requirements under Ind AS with regards to classification of debt and equity caused changes, such as net worth, debt–equity ratio and interest coverage ratios. Companies were initially spooked by the uncertainties around tax consequences of the Ind AS, which have been largely put to rest by the Financial Act, 2017. In many cases, there have been significant regulatory issues, such as control assessment under Ind AS being different from that under regulations such as the Companies Act, IRDA, SEBI takeover code, etc.