The Companies (Indian Accounting Standards) Rules, 2015

The Companies (Indian Accounting Standards) Rules, 2015 were enforced starting from 1st April 2015. This article provides detailed provisions related to their applicability.

Stage-Wise Applicability of the Indian Accounting Standards

The applicability of the Indian Accounting Standards (Ind AS) is primarily governed by Rule 4 under the Companies (Indian Accounting Standards) Rules, 2015.

According to rule 4 (1) (i), starting from the accounting period beginning on or after 1st April 2015, companies including their holding, joint venture, subsidiary, or associate companies, can voluntarily comply with the Indian Accounting Standards. However, mandatory applicability is detailed below:

The following companies must comply with the Indian Accounting Standards for the accounting period on or after 1st April 2016:
- Companies with a net worth of Rs. 500 Crore or more whose equity or debt securities are listed, or are in the process of being listed, in any stock exchange in India or abroad.
- Unlisted companies with a net worth exceeding Rs. 500 Crore.
- Holding, joint ventures, subsidiaries, or associate companies of the companies mentioned above.

For the accounting period on or after 1st April 2017, the following companies are required to comply with Indian Accounting Standards:
- Companies with a net worth of less than Rs. 500 Crore whose equity or debt securities are listed or are in the process of being listed on any stock exchange in India or outside.
- Unlisted companies with a net worth between Rs. 250 Crore and Rs. 500 Crore.

Holding, joint ventures, subsidiaries, or associate companies of the companies mentioned above.

Applicability of Indian Accounting Standards to NBFCs

The requirements for Non-Banking Financial Companies (NBFCs) to comply with Indian Accounting Standards are as follows:

From the accounting period on or after 1st April 2018:
- NBFCs having a net worth of Rs. 500 Crore or more.
- Holding, joint ventures, subsidiaries, or associate companies of the NBFCs mentioned above.

For the accounting period on or after 1st April 2019:
- NBFCs with a net worth of less than Rs. 500 Crore whose securities are listed or are in process of listing on any stock exchange in India or globally.
- Unlisted NBFCs with a net worth between Rs. 250 Crore and Rs. 500 Crore.

Holding, joint ventures, subsidiaries, or associate companies of the NBFCs mentioned above.

NBFCs must adopt the Indian Accounting Standards in the immediate fiscal year following the year they meet the specified net worth threshold. For example, if an NBFC meets the threshold on 31st March 2019, the standards apply from the 2019-2020 financial year.

Other Important Points

Indian Accounting Standards apply to both standalone and consolidated financial statements.
Overseas subsidiaries, joint ventures, and associates of Indian companies can prepare standalone statements as per their jurisdictional rules.
If an Indian company, being a subsidiary, joint venture, or associate of a foreign company, is covered under Indian Accounting Standards, it must prepare its financial statements accordingly.
Companies that choose to opt voluntarily for the Indian Accounting Standards must consistently prepare their financial statements accordingly.
For a comprehensive understanding of Indian Accounting Standards (Ind AS), consider visiting our detailed guide.
The complete list of Indian Accounting Standards includes:

IND AS 1 – Presentation of Financial Statements
IND AS 2 – Inventories
IND AS 7 – Statement of Cash Flows
... and others.

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Frequently Asked Questions

Common questions about Indian Accounting Standards Rules 2015 Applicability.

The Companies (Indian Accounting Standards) Rules, 2015 lay down the applicability and guidelines for Indian companies to adopt the Indian Accounting Standards (Ind AS). These rules aim to align the accounting practices of Indian companies with global standards, promoting transparency and comparability in financial reporting.

From April 1, 2016, the following companies are required to comply with Ind AS: companies with a net worth of Rs. 500 crore or more and listed (or in the process of being listed) in India or abroad, unlisted companies with a net worth exceeding Rs. 500 crore, and their respective holding, joint venture, subsidiary, or associate companies.

Unlisted companies with a net worth between Rs. 250 crore and Rs. 500 crore, as well as their holding, joint venture, subsidiary, or associate companies, are required to comply with Ind AS from the accounting period beginning on or after April 1, 2017.

NBFCs with a net worth of Rs. 500 crore or more, along with their holding, joint venture, subsidiary, or associate companies, must adopt Ind AS from the accounting period beginning on or after April 1, 2018. NBFCs with a net worth between Rs. 250 crore and Rs. 500 crore or listed (or in the process of being listed) in India or abroad, and their respective holding, joint venture, subsidiary, or associate companies, must comply with Ind AS from the accounting period beginning on or after April 1, 2019.

Yes, the Companies (Indian Accounting Standards) Rules, 2015 allow companies and their holding, joint venture, subsidiary, or associate companies to voluntarily comply with Ind AS from the accounting period beginning on or after April 1, 2015.

Yes, Ind AS apply to both standalone and consolidated financial statements of the companies falling under the applicability criteria.

Overseas associate, joint venture, subsidiary, and other entities of an Indian company are allowed to prepare their standalone financial statements as per the requirements of their respective jurisdictions.

The article lists 35 Indian Accounting Standards, ranging from Ind AS 1 (Presentation of Financial Statements) to Ind AS 115 (Revenue from Contracts with Customers).

No, the Companies (Indian Accounting Standards) Rules, 2015 require that companies which voluntarily opt for Ind AS must consistently follow the same and prepare their financial statements accordingly.

Ind AS 113 (Fair Value Measurement) provides guidance on how to measure fair value for financial reporting purposes, ensuring consistency and comparability in fair value measurements across different entities and transactions.