The Companies (Indian Accounting Standards) Rules, 2015

The Companies (Indian Accounting Standards) Rules, 2015 has been made effective from 1

st April 2015. Present article contains the provisions relating to applicability of the same.

Stage-Wise Applicability of the Indian Accounting Standards -

Rule governing applicability of the Indian Accounting Standards are contained under rule 4 of the Companies (Indian Accounting Standards) Rules, 2015. According to rule 4 (1) (i), from accounting period beginning on or after 1

st April 2015, any company and its holding, joint venture, subsidiary or associate company can voluntarily comply with the Indian Accounting Standards, however, the mandatory applicability of the same are summarized hereunder:

Following are the companies which are required to comply with the Indian Accounting Standards for the accounting period on or after 1st April 2016:
- The company having a net worth of Rs. 500 Crore or more and the equity or debt securities of such companies are being listed or are in the process of being listed on any of the stock exchange in India or Outside India;
- Unlisted companies having a net worth of more than Rs. 500 Crore;
- Holding, joint ventures, subsidiaries or associate companies of above mentioned companies.

Following are the companies which are required to comply with the Indian Accounting Standards for the accounting period on or after 1st April 2017 –
- The company having a net worth of less than Rs. 500 Crore and the equity or debt securities of such companies are being listed or is in the process of being listed on any of the stock exchange in India or Outside India;
- Unlisted companies having a net worth between Rs. 250 Crore and Rs. 500 Crore;

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

Applicability of Indian Accounting Standard to NBFCs

Following are the list of Non-Banking Financial Companies which are required to comply with the Indian Accounting Standards for the accounting period on or after 1st April 2018 –
- Non-Banking Financial Companies having a net worth of Rs. 500 Crore or more;
- Holding, joint ventures, subsidiaries or associate companies of NBFCs covered above.

Following are the list of Non-Banking Financial Companies which are required to comply with the Indian Accounting Standards for the accounting period on or after 1st April 2019 –
- Non-Banking Financial Companies, having net-worth of less than Rs. 500 Crore, whose equity or debt securities are being listed or are in the process of being listed on any of the stock exchange in India or Outside India;
- Unlisted Non-Banking Financial Companies having net-worth between Rs. 250 Crore and Rs. 500 Crore;

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

It must be noted that the Non-Banking Financial Company shall apply the Indian Accounting Standard from the immediate next accounting year in which the NBFC reaches the specified threshold limit as mentioned above. For example, if the NBFCs reaches the threshold limit on 31

st March 2019, for the first time, then, Indian Accounting Standards shall apply to such NBFC for the financial year 2019-2020.

Other Important Points

Indian Accounting Standards would apply to both stand-alone financial statements and consolidated financial statements;
Overseas associate, joint venture, subsidiary and other entity of Indian Company are allowed to prepare their standalone financial statements as per the requirement of their jurisdictions;
In case Indian Accounting Standards are applicable to any Indian company which is subsidiary, joint venture, associate and other similar entities of a foreign company, then, such Indian company is required to prepare its financial statements in accordance with the Indian Accounting Standards;
The company which voluntarily opts for the Indian Accounting Standards are required to consistently follow the same and prepare its financial statements accordingly;
Following is the list of Indian Accounting Standards –
- IND AS 1 – Presentation of Financial Statements
- IND AS 2 – Inventories
- IND AS 7 – Statement of Cash Flows
- IND AS 8 – Accounting Policies, Changes in Accounting Estimates and Errors
- IND AS 10 – Events after the reporting period
- IND AS 11 – Construction contracts
- IND AS 12 – Income Tax
- IND AS 16 – Property, plant and equipment
- IND AS 17 – Lease
- IND AS 18 – Revenue
- IND AS 19 – Employee Benefits
- IND AS 20 – Accounting for Government Grants and Disclosure of Government assistance
- IND AS 21 – Effect of change in foreign exchange rates
- IND AS 23 – Borrowing costs
- IND AS 24 – Related parties disclosure
- IND AS 27 – Separate financial statements
- IND AS 28 – Investment in joint venture and associates
- IND AS 29 – Financial reporting in hyperinflationary economies
- IND AS 32 – Financial instruments presentation
- IND AS 33 – Earning Per Share
- IND AS 34 – Interim Financial Reporting
- IND AS 36 – Impairment of Assets
- IND AS 37 – Provisions, contingent liabilities and assets
- IND AS 38 – Intangible asset
- IND AS 40 – Investment Property
- IND AS 41 – Agriculture
- IND AS 101 – First-time adoption of IND AS
- IND AS 102 – Share-based payment
- IND AS 103 – Business combination
- IND AS 104 – Insurance contract
- IND AS 105 – Non-current assets held for sale and discontinued operations
- IND AS 106 – Exploration and evaluation of mineral resources
- IND AS 107 – Financial instruments disclosure
- IND AS 108 – Operating segments
- IND AS 109 – Financial instruments
- IND AS 110 – Consolidated financial statements
- IND AS 111 – Joint agreement
- IND AS 112 – Disclosure of interests in other entities
- IND AS 113 – Fair value measurement
- IND AS 114 – Regulatory Deferral Accounts
- IND AS 115 – Revenue from Contracts with Customers

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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.