Various Phases of Implementation of Ind AS

MCA has notified a phase-wise convergence to IndAS from presently used accounting standards. As per the notification, from 1st April 2015, Ind AS shall be implemented on a voluntary basis and will be mandatory from 1st April 2016 A detailed description of each phase is discussed below:

Phase 1:

Mandatory applicability of Ind AS to companies :

• Whether listed or unlisted
• Having net worth greater than or equal to Rs. 500 Crores*
• Along with holding, subsidiaries, joint venture or associates of above companies
• Excluding all banking companies, Insurance companies and NBFCs

From 1^st April 2016

*net worth shall be computed for previous three financial years (i.e. 2013-14,2014-15 & 2015-16)

Phase 2:

Mandatory applicability of Ind AS to companies:

• That are listed or in the process of being listed(as on 31.03.2016)
• Having net worth greater than 250 crores and less than 500 crores*
• Excluding all banking companies, Insurance companies and NBFCs

From 1^st April 2017

*net worth shall be computed for previous four financial years (i.e. 2013-14,2014-15,2015-16 & 2016-17)

Phase 3:

Mandatory applicability of Ind as to all banks, NBFCs and insurance companies:

• Having net worth greater than or equal to 500 crores*

From 1^st April 2018

*net worth shall be computed for past three financial years (i.e. 2015-16,2016-17 & 2017-18)

Phase 4:

Mandatory applicability of Ind AS to all NBFCs

• Having net worth greater than or equal to 250 crores

From 1^st April 2019

Please note some important points while testing the applicability of Ind AS:-

• Securities listed or in process of listed in SME Exchange are not included in above companies.
• The net worth is calculated based on standalone financial statements of company as on 31st March or first audited financial statements after this date.
• The companies which were not in existence or exiting companies falling under above rules of applicability of Ind AS, the net worth is calculated based on the first audited financial statements ending after that date. If these companies are meeting the net worth limit for the first time at the end of financial year, then they shall follow the Indian AS from next accounting year. For example, if the companies meet the net worth limit as on 31st march 2019 then the Ind AS will be applicable from financial year 2019-20.
• Ind AS will be applied to both standalone financial statements and consolidated financial statements.
• Once any Indian company applies Ind AS voluntarily or mandatory, then it must follow them consistently for future years.

Following points should be kept in mind while implementing Ind-AS:-

• Ind AS are intended to be in conformity with the provisions of laws. However, if due to amendments in the law, a particular Ind AS is found to be not in conformity with such law, the provisions of the said law shall prevail and the financial statements shall be prepared in conformity with such law.
• Ind AS are intended to apply only to items which are material.

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