Roadmap Designed For Implementation Of Indian Accounting Standards(Indas)

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03 Feb, 16 08:52
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Article by: dr. Nuzhat sadriwala

The Ministry of Corporate Affairs during its budget announcement has presented a road map on 18 January 2016 for implementation of Indian Accounting Standards (Ind AS) converged with International Financial Reporting Standards (IFRS) for
• Scheduled commercial banks (excluding RRBs),
• insurers/insurance companies and
• Non-Banking Financial Companies (NBFC’s).
The Scheduled commercial banks (excluding Regional Rural Banks (RRBs), All-India Term-lending Refinancing Institutions (i.e. Exim Bank, NABARD, NHB and SIDBI) and Insurers/Insurance companies would be required to prepare Ind AS based financial statements for accounting periods beginning from April 1, 2018 onwards, with comparatives for the periods ending March 31, 2018 or thereafter. Ind AS would be applicable to both consolidated and individual financial statements.
“Notwithstanding the roadmap for companies, the holding, subsidiary, joint venture or associate companies of Scheduled commercial banks (excluding RRBs) would be required to prepare Ind AS-based financial statements for accounting periods beginning from April 1, 2018 onwards,” the corporate ministry said.
Urban Cooperative Banks (UCBs) and Regional Rural Banks (RRBs) shall not be required to apply Ind AS and shall continue to comply with the existing Accounting Standards, for the present.
NBFCs will be required to prepare Ind AS based financial statements in two phases:
• Under Phase I, NBFCs having net worth of Rs 500 crores or more and their associated companies would be required to prepare Ind AS based financial statements for accounting periods beginning from April 1, 2018.
• Under Phase II, the NBFCs whose networth is less than Rs 500 crore, would be required to prepare Ind AS based financial statements for accounting periods beginning from April 1, 2019.
Draft Notification/Rules, as required, would be issued by the Ministry of Corporate Affairs, RBI and IRDA in due course.
The new Accounting Standards is set to remove variations in the treatment of several accounting aspects and to bring about standardization in presentation. They intent to harmonize the diverse accounting policies followed in the preparation and presentation of financial statements by different reporting enterprises so as to facilitate intra-firm and inter-firm comparison.
Reference
http://pib.nic.in/newsite/erelease.aspx?relid=134578
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