IND AS stands for Indian Accounting Standards. This is nothing but standardized accounting policies and procedures that the Indian companies follow. Again, the Indian Accounting Standards is harmonized with the International Financial Reporting Committee (IFRC), which has already issued a set of standard accounting rules globally.
As notified by the Ministry of Corporate Affairs, the adoption of IND AS will be phase-wise and only on special cases depending on the net worth and listing of the company. Let us understand each of the phases in detail under IND AS’ adaptability.
The regulations and rules under the IND AS is mandated for all companies starting from 1st April 2016. However, the net worth of that company should be greater than or equal to Rs. 500 crore.
Here, IND AS can be adapted by companies that either listed or in the process of listing, as of 31st March 2016. However, in such cases the net worth of the company should be greater than or equal to Rs.250 crore.
In this phase, IND AS as applicability was made a mandate to all banks, insurance companies, and NBFCS starting from 1st April 2018. However, there still remains a condition. The net worth of these banks or insurance companies should be more than or equal to Rs.500 crore.
Those NBFCs having a net worth more than or equal to Rs. 250 crore will have IND AS mandatorily applicable from 1st April 2019.
There are certain things that have to be understood here. If IND AS is applicable to any certain company, it is equally applicable to all its subsidiaries, holding companies, associate companies sister companies, and even joint ventures.
Similarly, in the case of Indian companies that have foreign operations, the stand-alone financial statement may continue within the company’s jurisdictional requirement and would also include a statement adhering to the rules of IND AS. However, these companies will have to report their IND AS adjusted numbers of its Indian parent company in order to prepare consolidated IND AS accounts.
Another important point to be noted here is that the net worth calculation of the companies or entity is determined based on the stand-alone account of the company. This rule has been put into effect starting from 31st March 2014. The total of Paid-up share Capital after the deduction of accumulated losses and deferred expenditure is known as Net worth.