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THE NEW AXIS OF FINANCIAL REPORTING- IND AS AND ICDS

| The New Axis of Financial Reporting � Ind AS and ICDS RSM

About this publication

The publication 'The New Axis of Financial Reporting � Ind AS and ICDS' is prepared by RSM Astute Consulting Pvt. Ltd. (the Indian member of RSM) to provide readers a broad understanding of applicability of Ind AS and Income Computation and Disclosure Standards (ICDS) and some key differences with IFRS and Indian Standards. The publication is general in nature and does not cover all the requirements of Ind AS / (ICDS). The publication does not focus on other regulatory requirements that an Indian Entity needs to comply with. The preparation of financial statements complying with Ind AS is the responsibility of the management of the relevant entity and accordingly this publication does not replace the need for professional judgment which may be necessary for application of relevant standards and other disclosure requirements.

Although the publication has been compiled by RSM Astute Consulting Pvt. Ltd., the views expressed are those of RSM Astute - IFRS Champions.

The copyright in this published work shall belong to and vest in RSM Astute Consulting Pvt. Ltd. and all rights are reserved. Every effort has been made to ensure the contents are accurate and current. Information in this publication is no way intended to replace or supersede specific independent or other professional, legal, tax or accounting advice. This publication cannot and should not be relied upon for taking actions or decisions without appropriate professional advice. While all reasonable care has been taken in preparation of this publication, we accept no responsibility for any liability arising from any statements or errors contained in this publication.

Happy Reading!

|The New Axis of Financial Reporting � Ind AS and ICDS RSM

Table of Contents

Chapter 1 : Introduction 1Chapter 2 : Applicability of Ind AS 5Chapter 3 : Ind AS Vs. IFRS Vs. Indian GAAP (AS) 9 3.1 Ind AS Vs. IFRS and Indian GAAP (AS) � Listing 10 3.2 Ind AS Vs. IFRS � Carve-outs 13 3.3 Ind AS Vs. AS - Key Differences 22Chapter 4 : Ind AS Vs. ICDS � Key Differences 75 4.1 Brief Background of ICDS 76 4.2 Comparison of ICDS and Ind AS 76 4.3 Comparative list of ICDS Vs. corresponding Ind AS 77 4.4 Key differences � ICDS Vs. Ind AS 77Chapter 5 : First Time Adoption of Indian Accounting Standards (Ind AS 101) 96 5.1 Scope of Ind AS 101 97 5.2 Certain Key Aspects 97 5.2.1 Opening Ind AS balance sheet and accounting policies 97 5.2.2 Exceptions to the principles that an entity�s opening Ind AS balance sheet shall fully comply with each Ind AS effective at the reporting date 98 5.2.3 Exemptions from retrospective application of some aspects of other Ind AS 99 5.2.4 Exemptions from the requirements of certain Ind ASs 100 5.2.5 Comparative information 101 5.2.6 Explanation for transition to Ind AS 101 5.2.7 Use of fair value as deemed cost 102 5.2.8 Use of deemed cost for investments in subsidiaries, joint ventures and associates 102 5.2.9 Derecognition of financial assets and financial liabilities 103 5.2.10 Hedge accounting 103 5.2.11 Non-controlling interest 104 5.2.12 Interim financial reports 105 5.2.13 Presentation and disclosures 105Chapter 6 : Frequently Asked Questions (FAQs) by First Time Adopters of Ind AS 107 6.1 From which date Ind AS will be applicable in India? 108 6.2 Which entities in India need to comply with Ind AS with effect from 1 April 2016? 108 6.3 If an unlisted company has net worth less than Rs. 250 crores as at 31 March 2014, can Ind AS become applicable to it in future? 108

Table of Contents

6.4 What is the date of transition to Ind AS? 108 6.5 If the date of transition to Ind AS is 1 April 2015, what GAAP the Indian company needs to follow for the year 2015-2016? 109 6.6 What are the components of a complete set of Ind AS financial statements? 109 6.7 What would entity need to do in converting financial statements as per Indian GAAP to Ind AS financial statements? 109 6.8 Can any entity prepare Ind AS financial statements for period longer / shorter than one year? If yes, what are the disclosures required? 110 6.9 Which Ind AS would an entity need to comply with in its first Ind AS financial statements? 110 6.10 If an entity presents interim financial information for part of the period covered by its first Ind AS financial statements, what additional disclosures are required? 111 6.11 What is offsetting? 111

| The New Axis of Financial Reporting � Ind AS and ICDS RSM

Terms DefinitionAFS Available for saleAS Accounting Standards notified vide Companies (Accounting Standards) Rules, 2006BS Balance SheetCFS Consolidated Financial StatementsCGU Cash Generating UnitEPS Earning Per ShareFASB Financial Accounting Standards BoardFIFO First-In First-OutGAAP Generally Accepted Accounting PrinciplesGCA Going Concern AssumptionIAS The International Accounting StandardsIASB The International Accounting Standards BoardICAI The Institute of Chartered Accountants of IndiaICDS Income Computation and Disclosure StandardsIFRIC The International Financial Reporting Interpretations Committee IFRS The International Financial Reporting StandardsIND AS Indian Accounting Standards notified vide Companies (Accounting Standards) Rules, 2015MCA Ministry of Corporate Affairs NRV Net Realisable ValueOCI Other Comprehensive IncomeP&L Profit and LossPPE Property, Plant and EquipmentSFS Separate Financial StatementsSIC Standing Interpretations CommitteeSMC Small and Medium-Sized CompaniesSME Small and Medium-Sized EntitiesWAV Weighted Average Cost

Abbreviations

|The New Axis of Financial Reporting � Ind AS and ICDS RSMBack to Content

1.0 INTRODUCTION

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The financial reporting for Indian companies is set to change completely from financial year 2016-17 with India moving towards IFRS - the most commonly used global financial reporting standards. From the financial year 2016-17, companies whose equity or debt securities are listed or are in the process of listing on any stock exchange in India or outside India and having net worth of Rs. 500 crores or more (about US$ 75 million) as well as unlisted companies having net worth of Rs. 500 crores or more (about US$ 75 million) would be required to adopt Ind AS i.e. the Indian Accounting Standards which have been converged with the IFRS with certain minimal exceptions. This requirement will also be applicable to the holding, subsidiary, joint venture or associate companies of companies covered above. From the financial year 2017-18, companies whose equity or debt securities are listed or are in the process of listing on any stock exchange in India or outside India irrespective of net worth and all other companies having net worth of Rs. 250 crores or more (about US$ 38 million) would be required to adopt Ind AS. This is perhaps the most significant change in respect of financial reporting in the history of corporate India and will have far reaching implications in terms of assets, liabilities, income and expenses, disclosures and will also impact tax on book profits.

The term International Financial Reporting Standards (IFRSs) includes IFRSs, IASs and interpretations originated by the IFRIC or its predecessor, the former Standing Interpretations Committee (SIC). IFRS are increasingly being recognised as Global Reporting Standards for financial statements. �National GAAP� is becoming rare. As global capital markets become increasingly integrated, many countries are moving to IFRS. More than 130 countries such as European Union, Australia, New Zealand and Russia currently permit the use of IFRS in their countries.

IFRSs are accounting standards for reporting financial results and are applicable to general purpose financial statements and other financial reporting of all profit- oriented entities. Profit-oriented entities includes those engaged in commercial, industrial, financial and similar activities, whether organized in corporate or in other forms also includes mutual insurance companies, other mutual co-operative entities, etc. developed and approved by IASB (International Accounting Standard Board).

Chapter 1 Introduction

|The New Axis of Financial Reporting � Ind AS and ICDS 2RSMBack to Content

Chapter 1 Introduction

IASB is also working with FASB on joint project to align IFRS and US GAAP along with other projects to improve IFRS requirements. As a result, IFRS have under gone significant changes in recent past and more changes would be implemented in future.

The legal recognition to the Accounting Standards in India was accorded for the companies in the Companies Act, 1956, by introduction of Section 211(3C) whereby it is required that the companies shall follow the Accounting Standards notified by the Central Government. The Accounting Standards were notified by Ministry of Corporate Affairs (MCA) vide the Companies (Accounting Standards) Rules, 2006 under the Companies Act, 1956. This Rule contained the standards to be applied by companies for preparation of general purpose financial statements for accounting periods commencing on or after 7 December 2006.

In February 2011, MCA had hosted 35 Ind AS (Indian Accounting Standards, which are converged with IFRS) on its website. However, date for implementation of these Ind AS by Indian companies was not notified.

In February 2015, MCA notified the Companies (Indian Accounting Standards) Rules2015. These rules require select class of companies and their auditors to comply with the Ind AS in specified manner. Other companies not required to comply with Ind AS are required to comply with Accounting Standards as specified in Annexure to the Companies (Accounting Standards) Rules, 2006.

Sub-section (1) of Section 145 of the Income-tax Act, 1961 (�the Act�) provides that the income chargeable under the head �Profits and gain of business or profession� or �Income from other sources� shall [subject to the provisions of sub-section (2)] be computed in accordance with either cash or mercantile system of accounting regularly employed by the assessee. Sub-section (2) of Section 145 provides that the Central Government may notify Income Computation and Disclosure Standards (ICDS) for any class of assessees or for any class of income. 10 ICDS were notified and are effective from 1 April 2015 and accordingly applicable from the assessment year 2016-17 onwards.

| The New Axis of Financial Reporting � Ind AS and ICDS 3 RSMBack to Content

What is Ind AS?

Ind AS stands for Indian Accounting Standards as notified by MCA vide Companies (Indian Accounting Standards) Rules, 2015. These are standards converged with International Financial Reporting Standards (IFRS).

Since India has not adopted IFRS as issued by IASB, Ind AS were formulated. In principle, Ind AS are very much same as IFRS, but with some exceptions (carveouts).

Ind AS are not approved by IASB, but are approved / notified by MCA for implementation by select class of Indian companies.

It can also be noted that the 39 Ind AS as notified by MCA in February 2015 are not same as 35 Ind AS published in February 2011.

The notified Ind AS would be mandatorily applied by select class of companies from financial year 2016-17, with comparatives for previous year ending 31 March 2016 or thereafter.

IFRS stands for �International Financial Reporting Standards� and includes International Accounting Standards (IAS) until they are replaced by any IFRS and interpretations originated by the IFRIC or its predecessor, the former Standing Interpretations Committee (SIC).

Chapter 1 Introduction

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2.0 APPLICABILITY OF IND AS

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Ind AS are applicable to companies meeting specified criteria as under:

Particulars Phase I (FY 2016-17) Phase II (FY 2017-18)

Covered companies

Year in which Ind AS to be applied

Comparative figures for preceding accounting period

a) Companies whose equity or debt securities are listed or are in the process of listing on any stock exchange in India or outside India and having net worth of Rs. 500 crores or more

Accounting period beginning on or after 1 April 2016

Required for period ending on 31 March 2016 or thereafter

a) Companies whose equity or debt securities are listed or are in the process of listing on any stock exchange in India or outside India and having net worth less than Rs. 500 crores

Accounting period beginning on or after 1 April 2017

Required for period ending on 31 March 2017 or thereafter

b) Companies not covered in (a) above and having net worth of Rs. 500 crores or more

b) Companies not covered in (a) above and having net worth of Rs. 250 crores or more but less than Rs. 500 crores

c) Holding, subsidiary, joint venture or associate companies of companies covered above

c) Holding, subsidiary, joint venture or associate companies of companies covered above

Notes:

1. Ind AS shall be applicable to both, standalone and consolidated financial statements of the company.

2. Any company may comply with the Ind AS for financial statements for accounting periods beginning on or after 1 April 2015, with the comparatives for the periods ending on 31 March 2015 or thereafter. Such company would prepare its financial statements as per Ind AS consistently.

3. Companies whose securities are listed or are in the process of being listed on SME exchange without initial public offering need not apply Ind AS.

Chapter 2 Applicability of Ind AS

|The New Axis of Financial Reporting � Ind AS and ICDS 6RSMBack to Content

4. 'Net Worth' means the aggregate value of the paid-up share capital and all reserves created out of the profits and securities premium account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of revaluation of assets, write-back of depreciation and amalgamation.

5. For the purpose of applicability of Ind AS the net worth shall be calculated in accordance with the standalone financial statements of the company as on 31 March 2014 or the first audited financial statements for accounting period which ends after that date.

6. Companies which are not in existence as on 31 March 2014 or an existing company falling under any of the thresholds specified in subsequent year, the net worth shall be calculated on the basis of first audited financial statements ending after 31 March 2014.

7. Overseas subsidiary, associates, joint venture and other similar entities of an Indian company may prepare its standalone financial statements in accordance with the requirements of the specific jurisdiction.

8. Once a company starts following Indian Accounting Standards (Ind AS) either voluntarily or mandatorily), it shall be required to follow the Indian Accounting Standards (Ind AS) for all the subsequent financial statements.

9. Once Indian Accounting Standards (Ind AS) are applied voluntarily, it shall be irrevocable and such companies shall not be required to prepare another set of financial statements in accordance with Accounting Standards specified in Annexure to Companies (Accounting Standards) Rules, 2006.

10. Ind AS are intended to be in conformity with the provisions of applicable laws. However, if due to subsequent amendments in the law, a particular Ind AS is found not to be inconformity with such law, the provisions of the said law shall prevail and the financial statements shall be prepared in conformity with such law.

Chapter 2 Applicability of Ind AS

| The New Axis of Financial Reporting � Ind AS and ICDS 7 RSMBack to Content

11. Ind AS are intended to apply only to items which are material.

Exemptions: The insurance companies, banking companies and non-banking finance companies shall not be required to apply Ind AS for preparation of their financial statements either voluntarily or mandatorily. It is expected that a separate roadmap would be announced by MCA for implementation of Ind AS by these classes of companies in near future.

Chapter 2 Applicability of Ind AS

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3.0 IND AS VS. IFRS VS. INDIAN GAAP (AS)

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3.1 Ind AS Vs. IFRS and Indian GAAP (AS) � Listing

As at 30 September 2015, 39 Ind AS corresponding to related IFRS have been notified. There are 43 IFRS of which 3 standards though issued would be applicable from future dates. Similarly there are 28 AS that are applicable as on this date.

A comparative listing of accounting standards under Ind AS, IFRS and AS, as at 30 September 2015 is given hereunder:

ASAS 1 - Disclosure of Accounting Policies

IFRSInd ASIAS 1 - Presentation of Financial Statements

Ind AS 1 - Presentation of Financial Statements

AS 2 - Valuation of Inventories

IAS 2 - InventoriesInd AS 2 - Inventories

AS 3 - Cash Flow Statements

IAS 7 - Statements of Cash Flows

Ind AS 7 - Statement of Cash Flows

AS 5 - Net Profit or Loss for the period, Prior period items and Changes in Accounting policies

IAS 8 - Accounting Policies, Changes in Accounting estimates and errors

Ind AS 8 - Accounting policies, Changes in Accounting estimates and errors

AS 4 � Contingencies and event occurring after the balance sheet date

IAS 10 - Events After the Balance Sheet Date

Ind AS 10 � Event after the reporting period

AS 7 - Construction Contracts

IAS 11 - Construction Contracts (will be superseded by IFRS 15 � Revenue from Contract with Customers)

AS 22 - Accounting for Taxes on Income

IAS 12 - Income TaxesInd AS 12 - Income Taxes

AS 10 � Accounting for Fixed AssetsAS 6 - Depreciation Accounting

IAS 16 - Property, Plant and Equipment

Ind AS 16 - Property, Plant and Equipment

AS 19 � LeasesIAS 17 - LeasesInd AS 17 - Leases

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

AS 9 - Revenue Recognition

IAS 18 - Revenue (will be superseded by

|The New Axis of Financial Reporting � Ind AS and ICDS 10RSM

Ind AS 115 - Revenue from Contract with Customers

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Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

ASIFRSInd ASIFRS 15 � Revenue from Contract with Customers)

AS 15 - Employee BenefitsIAS 19 - Employee Benefits

Ind AS 19 - Employee Benefits

AS 12 - Accounting for Government Grants

IAS 20 - Accounting for Government Grants and Disclosure of Government Assistance

Ind AS 20 - Accounting for Government Grants and Disclosure of Government Assistance

AS 11 - The Effects of Changes in Foreign Exchange Rates

IAS 21 - The Effect of Changes in Foreign Exchange Rates

Ind AS 21 - The Effects of Changes in Foreign Exchange Rates

AS 16 - Borrowing CostsIAS 23 - Borrowing CostsInd AS 23 - Borrowing Costs

AS 18 - Related Party Disclosures

IAS 24 - Related Party Disclosures

Ind AS 24 - Related Party Disclosures

IAS 26 - Accounting and Reporting by Retirement Benefit PlansIAS 27 - Separate Financial Statements

Ind AS 27 - Separate Financial Statements

AS 23 - Accounting for Investments in Associates in Consolidated Financial Statements

IAS 28 - Investments in Associates and Joint Ventures

Ind AS 28 - Investments in Associates and Joint Ventures

IAS 29 - Financial Reporting in Hyperinflationary Economies

Ind AS 29 - Financial Reporting in Hyperinflationary Economies

AS 27 - Financial reporting of Interests in Joint Ventures

IAS 32 - Financial Instruments - Presentation

Ind AS 32 - Financial Instruments - Presentation

AS 20 - Earnings per share

IAS 33 - Earnings per share

Ind AS 33 - Earnings per share

| The New Axis of Financial Reporting � Ind AS and ICDS 11 RSMBack to Content

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

ASIFRSInd ASAS 25 - Interim Financial Reporting

IAS 34 - Interim Financial Reporting

Ind AS 34 - Interim Financial Reporting

AS 28 - Impairment of Assets

IAS 36 - Impairment of Assets

Ind AS 36 - Impairment of Assets

AS 29 - Provisions, Contingent Liabilities and Contingent Assets

IAS 37 - Provisions, Contingent Liabilities and Contingent Assets

Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets

AS 26 - Intangible AssetsIAS 38 - Intangible AssetsInd AS 38 - Intangible Assets

AS 13 - Accounting for Investments

IAS 39 - Financial instruments - Recognition and Measurement

AS 13 - Accounting for Investments

IAS 40 - Investment Property

Ind AS 40 - Investment Property

IAS 41 - AgricultureInd AS 41 - AgricultureIFRS 1 - First Time Adoption of International Financial Reporting Standards

Ind AS 101 - First Time Adoption of Indian Accounting Standards

IFRS 2 - Share based payment

Ind AS 102 - Share based payment

AS 14 - Accounting for Amalgamations

IFRS 3 - Business combinations

Ind AS 103 - Business Combinations

IFRS 4 - Insurance Contracts

Ind AS 104 - Insurance Contracts

IFRS 5 - Non Current Assets Held for Sale and Discontinued Operations

AS 24 � Discontinued Operations

Ind AS 105 - Non Current Assets Held for Sale and Discontinued Operations

IFRS 6 - Exploration for and evaluation of Mineral Resources

Ind AS 106 - Exploration for and evaluation of Mineral Resources

IFRS 7 - Financial Instruments - Disclosures

Ind AS 107 - Financial Instruments - Disclosures

AS 17 � Segment Reporting

IFRS 8 - Operating Segments

Ind AS 108 - Operating Segments

|The New Axis of Financial Reporting � Ind AS and ICDS 12RSMBack to Content

IFRS 9 - Financial Instruments (effective from 1 Jan 2018)

Ind AS 109 � Financial Instruments

AS 21 - Consolidated Financial Statements

IFRS 10 - Consolidated Financial statements

Ind AS 110 � Consolidated Financial Statements

AS 27 - Financial reporting of Interests in Joint Ventures

IFRS 11 - Joint Arrangements

Ind AS 111 � Joint Arrangements

IFRS 12 - Disclosure of Interests in other entities

Ind AS 112 � Disclosure of Interest in other entities

IFRS 13 - Fair value measurement

Ind AS 113 � Fair value measurement

IFRS 14 - Regulatory Deferral Accounts (effective from 1 Jan 2016)

Ind AS 114 � Regulatory Deferral Accounts

AS 7 - Construction ContractsAS 9 - Revenue Recognition

IFRS 15 - Revenue from Contracts with Customers (effective from 1 Jan 2018)

Ind AS 115 � Revenue from Contracts with Customers

Chapter 3

ASIFRSInd AS

Standards that would be mandatory from a future datea

Standards that would be superseded

No corresponding Standards

3.2 Ind AS Vs. IFRS � Carve-outs

India has not adopted IFRS as issued by IASB, instead IFRS converged standards (Ind AS) were formulated and notified. Though in principle, Ind AS�s are similar to IFRS, certain differences still exist which are popularly called carve-outs. In order to facilitate easy comparison and understanding, at the end of each Ind AS an Appendix is given summarizing the differences, if any, between Ind AS and corresponding IFRS

A brief summary of significant carve-outs (differences between IFRS and Ind AS) is as follows:

Ind AS Vs. IFRS Vs. Indian GAAP (AS)

| The New Axis of Financial Reporting � Ind AS and ICDS 13 RSMBack to Content

IFRS

Ind

ASPa

rtic

ular

sBa

lanc

e sh

eet

Ind

AS-1

Te

rmin

olog

y

used

Stat

emen

t of f

inan

cial

pos

ition

(SO

FP)

Stat

emen

t of p

rofit

and

loss

Stat

emen

t of p

rofit

or l

oss

(SO

PL) a

nd o

ther

co

mpr

ehen

sive

inco

me(

SOCI

)Ap

prov

al o

f fin

anci

al s

tate

men

ts fo

r iss

ueAu

thor

izat

ion

of fi

nanc

ial s

tate

men

ts fo

r iss

ueTr

ue a

nd fa

ir vi

ewFa

ir pr

esen

tatio

nIn

d AS

requ

ires

all e

ntiti

es to

use

term

inol

ogy

for t

he ti

tle o

f the

fina

ncia

l sta

tem

ents

as

give

n in

the

stan

dard

IAS

1 giv

es th

e op

tion

to in

divi

dual

ent

ities

to

follo

w d

iffer

ent t

erm

inol

ogy

for t

he ti

tle o

f the

fin

anci

al s

tate

men

ts

Ind

AS 1

allo

ws

only

sin

gle

stat

emen

t app

roac

h fo

r pre

sent

ing

stat

emen

t of p

rofit

and

loss

and

ot

her c

ompr

ehen

sive

inco

me,

i.e. c

ompo

nent

s of

pro

fit o

r los

s an

d co

mpo

nent

s of

oth

er

com

preh

ensi

ve in

com

e sh

all b

e pr

esen

ted

as a

pa

rt o

f the

sta

tem

ent o

f pro

fit a

nd lo

ss.

Pres

enta

tion

of

Fina

ncia

l St

atem

ents

IAS

1 pro

vide

s an

opt

ion

eith

er to

follo

w th

e si

ngle

sta

tem

ent a

ppro

ach

or to

follo

w th

e tw

o st

atem

ent a

ppro

ach

i.e. e

ntity

may

eith

er

pres

ent a

sin

gle

stat

emen

t of

prof

it or

loss

and

ot

her c

ompr

ehen

sive

inco

me

pres

ente

d in

two

sect

ion

or p

rese

nt s

epar

ate

stat

emen

t of p

rofit

or

loss

whi

ch s

hall i

mm

edia

tely

pre

cede

the

stat

emen

t pre

sent

ing

com

preh

ensi

ve in

com

e,

whi

ch s

hall b

egin

with

pro

fit o

r los

s.O

nly

natu

re-w

ise

clas

sific

atio

n of

exp

ense

is

allo

wed

.Ex

pens

es c

lass

ifica

tion

base

d on

eith

er n

atur

e or

func

tion

is a

llow

ed.

Long

term

loan

s ne

ed n

ot b

e cl

assi

fied

as

curr

ent l

iabi

litie

s on

acc

ount

of b

reac

h of

a

mat

eria

l pro

visi

on, f

or w

hich

the

lend

er h

as

agre

ed to

wai

ve b

efor

e th

e ap

prov

al o

f fin

anci

al

stat

emen

ts fo

r iss

ue.

Und

er IF

RS, e

ntiti

es n

eed

to c

lass

ify s

uch

long

te

rm lo

an a

s cu

rren

t, ev

en if

the

lend

er a

gree

d,

afte

r the

repo

rtin

g pe

riod

and

befo

re th

e au

thor

isat

ion

of th

e fin

anci

al s

tate

men

ts fo

r is

sue,

not

to d

eman

d pa

ymen

t as

a co

nseq

uenc

e of

the

brea

ch.

Ind

AS 7

doe

s no

t pro

vide

an

optio

n to

cla

ssify

th

e in

tere

st p

aid

and

inte

rest

/ d

ivid

ends

St

atem

ent o

f Ca

sh F

low

IAS

7 gi

ves

an o

ptio

n to

cla

ssify

the

inte

rest

pai

d an

d in

tere

st /

divi

dend

s re

ceiv

ed a

s ite

m o

f

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 14RSMBack to Content

IFRS

Ind

ASPa

rtic

ular

sre

ceiv

ed a

s ite

m o

f ope

ratin

g ca

sh fl

ows

and

requ

ires

thes

e ite

m to

be

clas

sifie

d as

item

of

finan

cing

act

ivity

and

inve

stin

g ac

tivity

re

spec

tivel

y.

oper

atin

g ca

sh fl

ows.

Ind

AS 7

requ

ires

divi

dend

pai

d to

be

clas

sifie

d as

an

item

of f

inan

cing

act

ivity

onl

y.IA

S 7

give

s an

opt

ion

to c

lass

ify th

e di

vide

nd

paid

as

an it

em o

f ope

ratin

g ac

tivity

.

Even

ts a

fter

the

Repo

rtin

g Pe

riod

Whe

n an

ent

ity b

reac

hes

a m

ater

ial p

rovi

sion

of

a lo

ng-t

erm

loan

arr

ange

men

t on

or b

efor

e th

e en

d of

the

repo

rtin

g pe

riod

with

the

effe

ct th

at

the

liabi

lity

beco

mes

pay

able

on

dem

and

on th

e re

port

ing

date

and

if th

e le

nder

, bef

ore

the

appr

oval

of t

he fi

nanc

ial s

tate

men

ts fo

r iss

ue,

agre

es to

wai

ve th

e br

each

, it s

hall b

e co

nsid

ered

as

an a

djus

ting

even

t.

Whe

n an

ent

ity b

reac

hes

the

prov

isio

n of

a lo

ng

term

loan

arr

ange

men

t on

or b

efor

e th

e en

d of

th

e re

port

ing

perio

d w

ith th

e ef

fect

that

liabi

lity

beco

mes

pay

able

on

dem

and,

an

agre

emen

t by

the

lend

er a

fter

the

repo

rtin

g pe

riod

and

befo

re

the

auth

roris

atio

n of

the

finan

cial

sta

tem

ents

fo

r iss

ue, n

ot to

dem

and

paym

ent i

s no

t co

nsid

ered

as

an a

djus

ting

even

t.

Leas

esIn

d AS

17 e

scal

atio

n of

ope

ratin

g le

ase

rent

als

that

are

in lin

e w

ith th

e ex

pect

ed g

ener

al

infla

tion,

the

incr

ease

s in

the

rent

als

shal

l not

be

stra

ight

line.

IAS

17 re

quire

s re

cogn

ition

of o

pera

ting

leas

e ex

pens

es /

inco

me

on s

trai

ght l

ine

basi

s un

less

an

othe

r sys

tem

atic

bas

is is

mor

e re

pres

enta

tive

of th

e tim

e pa

tter

n of

the

user

�s

bene

fit.

Empl

oyee

Be

nefit

sIn

d AS

19 re

quire

s th

e ra

te u

sed

to d

isco

unt

post

-em

ploy

men

t ben

efit

oblig

atio

ns to

be

dete

rmin

ed b

y re

fere

nce

to m

arke

t yie

lds

on

gove

rnm

ent b

onds

. How

ever

, sub

sidi

arie

s,

asso

ciat

es, jo

int v

entu

res

and

bran

ches

do

mic

iled

outs

ide

Indi

a sh

all d

isco

unt p

ost-

empl

oym

ent b

enef

it ob

ligat

ions

aris

ing

on

acco

unt o

f pos

t-em

ploy

men

t ben

efit

plan

s

IAS

19 ra

te u

sed

to d

isco

unt p

ost-

empl

oym

ent

bene

fit o

blig

atio

ns a

re d

eter

min

ed b

y re

fere

nce

to m

arke

t yie

lds

on th

e hi

gh q

ualit

y co

rpor

ate

bond

s. G

over

nmen

t bon

ds y

ield

can

be

used

on

ly w

here

ther

e is

no

deep

mar

ket o

f hig

h qu

ality

cor

pora

te b

onds

.

| The New Axis of Financial Reporting � Ind AS and ICDS 15 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

IFRS

Ind

ASPa

rtic

ular

sus

ing

the

rate

det

erm

ined

by

refe

renc

e to

m

arke

t yie

lds

on h

igh

qual

ity c

orpo

rate

bon

ds.

Gov

ernm

ent

Gra

nts

Ind

AS 2

0 re

quire

s m

easu

rem

ent o

f non

-m

onet

ary

gove

rnm

ent g

rant

s on

ly a

t the

ir fa

ir va

lue.

IAS

20 g

ives

an

optio

n to

mea

sure

non

-m

onet

ary

gove

rnm

ent g

rant

s ei

ther

at t

heir

fair

valu

e or

at n

omin

al v

alue

.In

d AS

20

does

not

per

mit

dedu

ctio

n of

the

gran

t in

arriv

ing

at th

e ca

rryi

ng a

mou

nt o

f the

as

set.

Thus

gra

nts

rela

ted

to a

sset

s, n

eeds

to

be a

ccou

nted

as

defe

rred

inco

me

only

.

IAS

20 g

ives

an

optio

n to

pre

sent

the

gran

ts

rela

ted

to a

sset

s, in

clud

ing

non-

mon

etar

y gr

ants

at f

air v

alue

in th

e ba

lanc

e sh

eet e

ither

by

set

ting

up th

e gr

ant a

s de

ferr

ed in

com

e or

by

dedu

ctin

g th

e gr

ant i

n ar

rivin

g at

the

carr

ying

am

ount

of t

he a

sset

.Ef

fect

s of

Ch

ange

s in

Fo

reig

n Ex

chan

ge R

ate

Whe

n th

ere

is a

cha

nge

in fu

nctio

nal c

urre

ncy,

In

d AS

21 r

equi

res

disc

losu

re o

f tha

t fac

t and

the

reas

on fo

r the

cha

nge.

Add

ition

ally

Ind

AS 2

1 re

quire

s di

sclo

sure

of t

he d

ate

of c

hang

e in

fu

nctio

nal c

urre

ncy.

Whe

n th

ere

is a

cha

nge

in fu

nctio

nal c

urre

ncy,

IA

S 21

requ

ires

disc

losu

re o

f tha

t fac

t and

the

reas

on fo

r the

cha

nge

only

.

Ind

AS 2

1 has

bee

n am

ende

d to

sco

pe o

ut th

e lo

ng-t

erm

fore

ign

curr

ency

mon

etar

y ite

ms

for

whi

ch a

n en

tity

has

opte

d fo

r the

exe

mpt

ion

give

n in

Ind

AS 10

1.

IAS

21 d

o no

t pro

vide

for s

uch

scop

e ex

clus

ion

for l

ong-

term

fore

ign

curr

ency

mon

etar

y ite

ms.

Rela

ted

Part

y D

iscl

osur

esD

iscl

osur

e re

quire

men

t of I

nd A

S 24

, do

not

appl

y in

circ

umst

ance

s w

here

pro

vidi

ng s

uch

disc

losu

res

wou

ld c

onfli

ct w

ith th

e re

port

ing

entit

y�s

dutie

s of

con

fiden

tialit

y as

spe

cific

ally

re

quire

d in

term

s of

a s

tatu

te o

r by

any

regu

lato

r or s

imila

r com

pete

nt a

utho

rity

and

a st

atut

e or

a re

gula

tor o

r sim

ilar c

ompe

tent

IAS

24 d

oes

not p

rovi

de fo

r suc

h sc

ope

excl

usio

n.

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 16RSMBack to Content

IFRS

Ind

ASPa

rtic

ular

sau

thor

ity g

over

ning

an

entit

y pr

ohib

its th

e en

tity

to d

iscl

ose

cert

ain

info

rmat

ion

requ

ired

by th

e st

anda

rd.

Sepa

rate

Fi

nanc

ial

Stat

emen

ts

The

Com

pani

es A

ct m

anda

tes

prep

arat

ion

of

sepa

rate

fina

ncia

l sta

tem

ents

by

each

co

mpa

ny. A

ccor

ding

ly In

d AS

27

has

rem

oved

re

quire

men

t of d

iscl

osin

g th

e re

ason

for

prep

arin

g se

para

te fi

nanc

ial s

tate

men

ts if

not

re

quire

d by

law

.

IAS

27 re

quire

s ce

rtai

n cl

ass

of e

ntity

bei

ng a

Pa

rent

or i

nves

tor w

ith jo

int c

ontr

ol o

f or

sign

ifica

nt in

fluen

ce o

ver,

an in

vest

ee to

di

sclo

se th

e re

ason

for p

repa

ring

sepa

rate

fin

anci

al s

tate

men

ts if

not

requ

ired

by la

w

Def

initi

on o

f clo

se m

embe

rs o

f the

fam

ily o

f a

pers

on a

s pe

r IFR

S is

am

ende

d to

incl

ude

brot

her,

sist

er, f

athe

r and

mot

her.

Clo

se m

embe

rs o

f the

fam

ily o

f a p

erso

n ar

e th

ose

fam

ily m

embe

rs w

ho m

ay b

e ex

pect

ed to

in

fluen

ce, o

r be

influ

ence

d by

, tha

t per

son

in

thei

r dea

lings

with

the

entit

y in

clud

ing:

(a) t

hat i

ndiv

idua

l�s d

omes

tic p

artn

er a

nd

ch

ildre

n,

(b) c

hild

ren

of th

e in

divi

dual

�s d

omes

tic p

artn

er;

an

d(c

) dep

enda

nts

of th

e in

divi

dual

or t

he

in

divi

dual

�s d

omes

tic p

artn

er.

Opt

ion

to u

se th

e eq

uity

met

hod

to a

ccou

nt fo

r in

vest

men

t in

subs

idia

ry, jo

int v

entu

re a

nd

asso

ciat

es in

sep

arat

e fin

anci

al s

tate

men

ts is

no

t giv

en in

Ind

AS 2

7.

IAS

27 a

llow

s th

e en

titie

s to

use

the

equi

ty

met

hod

to a

ccou

nt fo

r inv

estm

ent i

n su

bsid

iarie

s, jo

int v

entu

res

and

asso

ciat

es in

th

eir S

epar

ate

Fina

ncia

l Sta

tem

ents

(SFS

).

Inve

stm

ents

in

Ass

ocia

tes

and

Join

t Ven

ture

s

Ind

AS 2

8 re

quire

s us

e of

uni

form

acc

ount

ing

polic

ies,

unl

ess,

in c

ase

of a

n as

soci

ate,

it is

im

prac

ticab

le.

IAS

28 re

quire

s an

inve

stor

to m

ake

appr

opria

te

adju

stm

ents

to th

e as

soci

ate�

s fin

anci

al

stat

emen

ts to

con

form

them

to th

e in

vest

or�s

ac

coun

ting

polic

ies

for r

epor

ting

like

| The New Axis of Financial Reporting � Ind AS and ICDS 17 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

IFRS

Ind

ASPa

rtic

ular

s

Exce

ss o

f the

ent

ity�s

sha

re o

f the

net

fair

valu

e of

the

inve

stee

�s id

entif

iabl

e as

sets

and

lia

bilit

ies

over

the

cost

of t

he in

vest

men

t is

reco

gnis

ed d

irect

ly in

equ

ity a

s ca

pita

l res

erve

.

Exce

ss o

f the

ent

ity�s

sha

re o

f the

net

fair

valu

e of

the

inve

stee

�s id

entif

iabl

e as

sets

and

lia

bilit

ies

over

the

cost

of t

he in

vest

men

t is

reco

gnis

ed in

pro

fit o

r los

s.

Fina

ncia

l Re

port

ing

in

Hyp

erin

flatio

n-ar

y Ec

onom

ies

Ind

AS 2

9 re

quire

s an

add

ition

al d

iscl

osur

e re

gard

ing

the

dura

tion

of th

e hy

perin

flatio

nary

si

tuat

ion

exis

ting

in th

e ec

onom

y.

IAS

29 d

oes

not r

equi

re s

uch

a di

sclo

sure

.

Fina

ncia

l In

stru

men

ts:

Pres

enta

tion

As

an e

xcep

tion

to th

e de

finiti

on o

f �fin

anci

al

liabi

lity�

, Ind

AS 3

2 co

nsid

ers

the

equi

ty

conv

ersi

on o

ptio

n em

bedd

ed in

a c

onve

rtib

le

bond

den

omin

ated

in fo

reig

n cu

rren

cy to

ac

quire

a fi

xed

num

ber o

f ent

ity�s

ow

n eq

uity

in

stru

men

ts a

s an

equ

ity in

stru

men

t if t

he

exer

cise

pric

e is

fixe

d in

any

cur

renc

y.

This

exc

eptio

n to

the

defin

ition

of �

finan

cial

lia

bilit

y� is

not

pro

vide

d in

IAS

32.

Earn

ings

per

Sh

are

Ind

AS 3

3 is

app

licab

le to

all c

ompa

nies

that

ha

ve o

rdin

ary

shar

es a

nd a

re re

quire

d to

app

ly

Ind

AS.

IAS

33 is

app

licab

le to

ent

ity/

grou

p w

ith a

pa

rent

:i)

Who

se o

rdin

ary

shar

es o

r pot

entia

lly

or

dina

ry s

hare

s ar

e tr

aded

in p

ublic

mar

ket

(a

dom

estic

or f

orei

gn s

tock

exc

hang

e or

an

ov

er-t

he�

coun

ter m

arke

t, in

clud

ing

loca

l

and

regi

onal

mar

kets

); or

ii)

That

file

s or

is in

the

proc

ess

of fi

ling,

its

fin

anci

al s

tate

men

ts w

ith a

sec

uriti

es

co

mm

issi

on o

r oth

er re

gula

tory

tran

sact

ions

and

oth

er e

vent

s in

sim

ilar

circ

umst

ance

s.

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 18RSMBack to Content

IFRS

Ind

ASPa

rtic

ular

s

Inta

ngib

le

Ass

ets

Ind

AS 3

8 al

low

s on

ly fa

ir va

lue

for r

ecog

nisi

ng

the

inta

ngib

le a

sset

and

gra

nt in

acc

orda

nce

with

Ind

AS 2

0.

With

rega

rd to

the

acqu

isiti

on o

f an

inta

ngib

le

asse

t by

way

of a

gov

ernm

ent g

rant

, IAS

38,

Inta

ngib

le A

sset

s, p

rovi

des

the

optio

n to

an

entit

y to

reco

gnis

e bo

th a

sset

and

gra

nt in

itial

ly

at fa

ir va

lue

or a

t a n

omin

al a

mou

nt p

lus

any

expe

nditu

re th

at is

dire

ctly

att

ribut

able

to

prep

arin

g th

e as

set f

or it

s in

tend

ed u

se.

Ind

AS 3

3 re

quire

s EP

S re

late

d in

form

atio

n to

be

disc

lose

d bo

th in

con

solid

ated

fina

ncia

l st

atem

ents

and

sep

arat

e fin

anci

al

stat

emen

ts.

IAS

33 p

rovi

des

that

whe

n an

ent

ity p

rese

nts

both

con

solid

ated

fina

ncia

l sta

tem

ents

and

se

para

te fi

nanc

ial s

tate

men

ts, it

may

giv

e EP

S re

late

d in

form

atio

n in

con

solid

ated

fina

ncia

l st

atem

ents

onl

y.In

d AS

33

requ

ires

amou

nt o

f inc

ome

or

expe

nse

debi

ted

or c

redi

ted

to s

ecur

ities

pr

emiu

m a

ccou

nt/o

ther

rese

rves

(whi

ch is

ot

herw

ise

requ

ired

to b

e re

cogn

ised

in p

rofit

or

loss

in a

ccor

danc

e w

ith In

d A

ss) t

o be

adj

uste

d fr

om p

rofit

or l

oss

from

con

tinui

ng o

pera

tions

fo

r the

pur

pose

of c

alcu

latin

g ba

sic

EPS.

Such

situ

atio

n is

not

cov

ered

und

er IA

S 33

.

The

amor

tizat

ion

met

hod

spec

ified

in th

e st

anda

rd d

oes

not a

pply

to a

mor

tizat

ion

of

inta

ngib

le a

sset

s ar

isin

g fr

om s

ervi

ce

conc

essi

on a

rran

gem

ents

in re

spec

t of t

oll

road

s re

cogn

ised

in th

e fin

anci

al s

tate

men

ts o

f en

tity

befo

re t

he b

egin

ning

of t

he fi

rst I

nd A

S re

port

ing

perio

d of

the

entit

y.

IAS

38 d

oes

not c

onta

in s

uch

exem

ptio

n.

or

gani

satio

n fo

r the

pur

pose

of i

ssui

ng

or

dina

ry s

hare

s in

a p

ublic

mar

ket.

| The New Axis of Financial Reporting � Ind AS and ICDS 19 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

IFRS

Ind

ASPa

rtic

ular

sIn

vest

men

t Pr

oper

tyA

s pe

r Ind

AS

40 In

vest

men

t pro

pert

ies

are

acco

unte

d on

ly b

ased

on

the

cost

mod

el. F

air

valu

e m

odel

is n

ot p

erm

itted

.

IAS

40 p

erm

its b

oth

cost

mod

el a

nd fa

ir va

lue

mod

el (e

xcep

t in

som

e si

tuat

ions

) for

m

easu

rem

ent o

f inv

estm

ent p

rope

rtie

s af

ter

initi

al re

cogn

ition

.

Ind

AS a

lso

prov

ides

cer

tain

opt

iona

l exe

mpt

ion

rela

ting

to th

e lo

ng-t

erm

fore

ign

curr

ency

m

onet

ary

item

s an

d se

rvic

e co

nces

sion

ar

rang

emen

ts re

latin

g to

toll r

oads

.

IFRS

doe

s no

t pro

vide

any

opt

iona

l exe

mpt

ion

rela

ting

to th

e lo

ng-t

erm

fore

ign

curr

ency

m

onet

ary

item

s an

d se

rvic

e co

nces

sion

ar

rang

emen

ts re

latin

g to

toll r

oads

.

Firs

t-tim

e ad

optio

nA

s pe

r Ind

AS

101 a

n en

tity�

s fir

st In

d AS

fin

anci

al s

tate

men

ts a

re th

e fir

st a

nnua

l fin

anci

al s

tate

men

ts in

whi

ch th

e en

tity

adop

ts

Ind

ASs.

The

firs

t-tim

e ad

opte

r sha

ll acc

ount

for

the

resu

lting

cha

nge

in th

e re

tain

ed e

arni

ngs

as

at th

e tr

ansi

tion

date

exc

ept i

n ce

rtai

n sp

ecifi

c in

stan

ces

whe

re it

requ

ires

adju

stm

ent i

n Ca

pita

l res

erve

to th

e ex

tent

suc

h ad

just

men

t am

ount

doe

s no

t exc

eed

the

bala

nce

avai

labl

e in

Cap

ital r

eser

ve.

IFRS

1 pr

ovid

es v

ario

us e

xam

ples

of f

irst I

FRS

finan

cial

sta

tem

ents

. It a

lso

prov

ides

exa

mpl

es

of in

stan

ces

whe

n an

ent

ity d

oes

not a

pply

IF

RS 1.

The

firs

t-tim

e ad

opte

r sha

ll acc

ount

for

the

resu

lting

cha

nge

in th

e re

tain

ed e

arni

ngs

as

at th

e tr

ansi

tion

date

exc

ept i

n ce

rtai

n sp

ecifi

c in

stan

ces

whe

re it

requ

ires

adju

stm

ent i

n th

e go

odw

ill.

Busi

ness

Co

mbi

natio

nsIn

cas

e of

bus

ines

s co

mbi

natio

ns o

f ent

ities

un

der c

omm

on c

ontr

ol In

d AS

103

prov

ides

that

su

ch b

usin

ess

com

bina

tion

tran

sact

ions

sho

uld

be a

ccou

nted

for u

sing

the

pool

ing

of in

tere

st

met

hod.

IFRS

3 e

xclu

des

from

its

scop

e bu

sine

ss

com

bina

tions

of e

ntiti

es u

nder

com

mon

con

trol

.

Ind

AS 10

3 re

quire

s th

e ba

rgai

n pu

rcha

se to

be

reco

gnis

ed in

oth

er c

ompr

ehen

sive

inco

me

and

accu

mul

ated

in e

quity

as

capi

tal r

eser

ve, u

nles

s th

ere

is n

o cl

ear e

vide

nce

for t

he u

nder

lyin

g

IFRS

3 re

quire

s ba

rgai

n pu

rcha

se g

ain

aris

ing

on

busi

ness

com

bina

tion

to b

e re

cogn

ized

in p

rofit

or

loss

.

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 20RSMBack to Content

IFRS

Ind

ASPa

rtic

ular

s re

ason

for c

lass

ifica

tion

of th

e bu

sine

ss

com

bina

tion

as a

bar

gain

pur

chas

e, in

whi

ch

case

, it s

hall b

e re

cogn

ised

dire

ctly

in e

quity

as

capi

tal r

eser

ve.

Reve

nue

from

co

ntra

cts

with

cu

stom

er

Und

er In

d AS

115,

pen

altie

s sh

ould

be

acco

unte

d fo

r as

per t

he s

ubst

ance

of t

he c

ontr

act.

Whe

re

the

pena

lty is

inhe

rent

in th

e de

term

inat

ion

of

tran

sact

ion

pric

e, it

sho

uld

form

par

t of v

aria

ble

cons

ider

atio

n, o

ther

wis

e th

e sa

me

shou

ld n

ot

be c

onsi

dere

d fo

r det

erm

inin

g th

e co

nsid

erat

ion

and

the

tran

sact

ion

pric

e sh

ould

con

side

red

as

fixed

.

IFRS

15 a

mou

nt o

f con

side

ratio

n, a

mon

g ot

her

thin

gs, c

an v

ary

beca

use

of p

enal

ties.

As

such

pe

nalti

es a

re re

quire

d to

be

cons

ider

ed in

de

term

inat

ion

of tr

ansa

ctio

n pr

ice.

Ind

AS 11

5 re

quire

s an

ent

ity to

pre

sent

se

para

tely

the

amou

nt o

f exc

ise

duty

incl

uded

in

the

reve

nue

reco

gnis

ed in

the

stat

emen

t of

prof

it an

d lo

ss.

IFRS

15 d

oes

not r

equi

re s

uch

disc

losu

re.

Ind

AS 11

5 re

quire

s to

pre

sent

reco

ncilia

tion

of

the

amou

nt o

f rev

enue

reco

gnis

ed in

the

stat

emen

t of p

rofit

and

loss

with

the

cont

ract

ed

pric

e sh

owin

g se

para

tely

eac

h of

the

adju

stm

ents

mad

e to

the

cont

ract

pric

e sp

ecify

ing

the

natu

re a

nd a

mou

nt o

f eac

h su

ch

adju

stm

ent s

epar

atel

y.

IFRS

15 d

oes

not r

equi

re s

uch

disc

losu

re.

| The New Axis of Financial Reporting � Ind AS and ICDS 21 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

3.3

Ind

AS V

s. A

S -

Key

Diff

eren

ces

Th

e ac

coun

ting

stan

dard

s as

spe

cifie

d in

the

Anne

xure

to th

e Co

mpa

nies

(Ind

ian

Acco

untin

g St

anda

rds)

Rul

es,

20

15 a

re c

alle

d th

e In

dian

Acc

ount

ing

Stan

dard

s (In

d AS

). T

he A

ccou

ntin

g st

anda

rds

as s

peci

fied

in A

nnex

ure

to

the

Com

pani

es (A

ccou

ntin

g St

anda

rds)

Rul

es, 2

006

are

refe

rred

as

AS in

this

sec

tion.

A

sum

mar

y of

key

diff

eren

ces

betw

een

som

e of

the

Ind

AS a

nd A

S is

giv

en h

ereu

nder

: Requ

irem

ents

as

per

AS

Cate

gory

Topi

c

Gen

eral

In

d AS

gen

eral

ly d

eals

with

pres

enta

tion

of fi

nanc

ial

st

atem

ents

.

Ind

ASRe

quire

men

ts

as p

er In

d AS

Ind

AS 1

Scop

e

AS

1 dea

ls o

nly

with

disc

losu

re o

f acc

ount

ing

po

licie

s.

Com

plia

nce

with

G

AA

P

Ent

ities

sho

uld

mak

e an

ex

plic

it an

d un

rese

rved

st

atem

ent i

n th

e no

tes

that

th

e fin

anci

al s

tate

men

ts

com

ply

with

Ind

AS.

Ind

AS 1

Pres

enta

tion

and

Dis

clos

ure

T

here

is a

pre

sum

ptio

n th

at

finan

cial

sta

tem

ents

sho

uld

be p

repa

red

in c

ompl

ianc

e w

ith A

S to

giv

e a

true

and

fa

ir vi

ew.

A

n en

tity

cann

ot d

escr

ibe

finan

cial

sta

tem

ents

as

com

plyi

ng w

ith In

d AS

un

less

they

com

ply

with

all

the

requ

irem

ents

of e

ach

appl

icab

le s

tand

ard

and

inte

rpre

tatio

n.

N

on-c

ompl

ianc

e w

ith a

ny o

f th

e ap

plic

able

AS

need

s to

be

dis

clos

ed in

the

finan

cial

st

atem

ents

.

Com

pone

nts

of

Fina

ncia

l st

atem

ents

Fi

nanc

ial s

tate

men

ts

com

pris

e of

1.

Bala

nce

shee

t as

at th

e en

d

Ind

AS 1

Pres

enta

tion

and

Dis

clos

ure

T

he re

quire

men

ts fo

r the

fin

anci

al s

tate

men

ts a

re s

et

out u

nder

the

Act s

uch

as

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 22RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

of

the

perio

d 2.

Sta

tem

ent o

f pro

fit a

nd lo

ss

for t

he p

erio

d3.

Sta

tem

ent o

f cha

nges

in

equi

ty fo

r the

per

iod

4. S

tate

men

t of c

ash

flow

for

the

perio

d 5.

Not

es c

ompr

isin

g a

sum

mar

y of

sig

nific

ant

acco

untin

g po

licie

s an

d ot

her e

xpla

nato

ry

info

rmat

ion

6. C

ompa

rativ

e in

form

atio

n in

re

spec

t of t

he p

rece

ding

pe

riod

7. B

alan

ce s

heet

as

at th

e be

ginn

ing

of th

e pr

eced

ing

perio

d w

hen

an e

ntity

ap

plie

s an

acc

ount

ing

polic

y re

tros

pect

ivel

y or

mak

es

rest

atem

ent o

r rec

lass

ifies

in

its

finan

cial

sta

tem

ents

.

Sc

hedu

le III

of t

he

Com

pani

es A

ct, 2

013.

Fi

nanc

ial s

tate

men

ts u

nder

th

e Co

mpa

nies

Act

, 201

3 in

clud

e:

- Ba

lanc

e sh

eet

- St

atem

ent o

f Pro

fit a

nd

Loss

- Ca

sh fl

ow s

tate

men

t (no

t m

anda

tory

for O

ne P

erso

n Co

mpa

ny, S

mal

l Com

pany

an

d D

orm

ant C

ompa

ny)

- Ac

coun

ting

polic

ies

and

Not

es to

fina

ncia

l st

atem

ents

.

Fair

pres

enta

tion

In

ext

rem

ely

rare

ci

rcum

stan

ces

in w

hich

m

anag

emen

t con

clud

es

Ind

AS 1

Pres

enta

tion

and

Dis

clos

ure

D

epar

ture

s fr

om A

S is

pe

rmitt

ed if

requ

ired

by la

w.

| The New Axis of Financial Reporting � Ind AS and ICDS 23 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

re

quire

men

t in

an In

d AS

w

ould

be

so m

isle

adin

g th

at

it w

ould

con

flict

with

the

obje

ctiv

e of

fina

ncia

l st

atem

ents

set

out

in th

e Fr

amew

ork,

the

entit

y sh

all

depa

rt fr

om th

at

requ

irem

ent i

f the

rele

vant

re

gula

tory

fram

ewor

k re

quire

s, o

r oth

erw

ise

does

no

t pro

hibi

t, su

ch a

de

part

ure.

In

d AS

pre

scrib

es

disc

losu

res

in c

ase

an e

ntity

de

part

s fr

om a

requ

irem

ent

of In

d AS

.Ca

pita

l

An

entit

y sh

all d

iscl

ose

info

rmat

ion

that

ena

bles

us

ers

of it

s fin

anci

al

stat

emen

ts to

eva

luat

e th

e en

tity�

s ob

ject

ives

, pol

icie

s an

d pr

oces

ses

for m

anag

ing

capi

tal.

Ind

AS 1

Dis

clos

ure

A

S do

es n

ot re

quire

suc

h a

disc

losu

re.

Extr

a-or

dina

ry it

ems

A

n en

tity

shal

l not

pre

sent

an

y ite

ms

of in

com

e or

ex

pens

es a

s ex

trao

rdin

ary

item

s in

the

sepa

rate

of

Ind

AS 1

Dis

clos

ure

A

n en

tity

shou

ld d

iscl

ose

in

stat

emen

t of p

rofit

and

loss

an

y in

com

e or

exp

ense

s th

at a

rise

from

eve

nts

or

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 24RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

Com

para

tives

A

n en

tity

shal

l dis

clos

e co

mpa

rativ

e in

form

atio

n in

re

spec

t of p

revi

ous

perio

d fo

r al

l am

ount

s re

port

ed in

cu

rren

t per

iod�

s fin

anci

al

stat

emen

ts.

A

n en

tity

shal

l als

o in

clud

e co

mpa

rativ

e in

form

atio

n fo

r na

rrat

ive

and

desc

riptiv

e in

form

atio

n w

hen

it is

re

leva

nt to

an

un

ders

tand

ing

of th

e

Ind

AS 1

Dis

clos

ure

A

n en

tity

shal

l dis

clos

e on

e ye

ar o

f com

para

tives

for a

ll nu

mer

ical

info

rmat

ion

in th

e fin

anci

al s

tate

men

ts.

tr

ansa

ctio

ns th

at a

re c

lear

ly

dist

inct

from

the

ordi

nary

ac

tiviti

es o

f the

ent

erpr

ise

and,

ther

efor

e, a

re n

ot

expe

cted

to re

cur

freq

uent

ly o

r reg

ular

ly a

s ex

trao

rdin

ary

item

s.

The

nat

ure

and

the

amou

nt

of e

ach

extr

aord

inar

y ite

m

shou

ld b

e se

para

tely

di

sclo

sed

in th

e pr

ofit

and

loss

acc

ount

in a

man

ner

that

its

impa

ct o

n cu

rren

t pr

ofit

or lo

ss c

an b

e pe

rcei

ved.

pr

ofit

and

loss

or i

n th

e no

tes.

| The New Axis of Financial Reporting � Ind AS and ICDS 25 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

Cons

iste

ncy

of

pres

enta

tion

cr

itica

l judg

emen

ts a

nd

estim

ates

mad

e by

the

man

agem

ent i

n ap

plyi

ng

acco

untin

g po

licie

s.

Ind

AS 1

Pres

enta

tion

and

disc

losu

re

No

such

requ

irem

ent.

Prev

ious

yea

rs fi

gure

s ar

e re

grou

ped

/rec

lass

ified

to

corr

espo

nd w

ith th

e cu

rren

t ye

ar�s

cla

ssifi

catio

n /

disc

losu

re.

estim

ates

sp

ecifi

cally

requ

ires

such

di

sclo

sure

.

A

n en

tity

shal

l ret

ain

the

pres

enta

tion

and

clas

sific

atio

n of

item

s in

the

finan

cial

sta

tem

ents

from

on

e pe

riod

to a

noth

er

unle

ss th

e ch

ange

is

requ

ired

by In

d AS

or d

ue to

chan

ge in

nat

ure

of th

e en

tity�

s op

erat

ion

havi

ng

rega

rds

to th

e cr

iteria

set

ou

t in

Ind

AS 8

, ano

ther

pr

esen

tatio

n or

cl

assi

ficat

ion

wou

ld b

e m

ore

appr

opria

te.

Off

sett

ing

Ind

AS 1

Gen

eral

T

here

is n

o sp

ecifi

c gu

idan

ce

avai

labl

e in

AS

in th

is

rega

rds.

A

n en

tity

shal

l off

set a

sset

s an

d lia

bilit

ies

or in

com

e an

d ex

pens

es o

nly

whe

n th

e sa

me

is re

quire

d or

pe

rmitt

ed b

y In

d AS

.

Repo

rtin

g cu

rren

cy fo

r pr

esen

tatio

n of

Ind

AS 1

and

Ind

AS 2

1Pr

esen

tatio

n an

d di

sclo

sure

A

S do

es n

ot s

peci

fy th

e cu

rren

cy in

whi

ch a

n en

terp

rise

pres

ents

its

T

he s

tand

ard

perm

its a

n en

tity

to p

rese

nt it

s fin

anci

al

stat

emen

ts in

any

cur

renc

y

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 26RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

(o

r cur

renc

ies)

. The

st

anda

rd a

lso

requ

ires

an

entit

y to

det

erm

ine

its

func

tiona

l cur

renc

y an

d its

re

sults

and

fina

ncia

l pos

ition

in

that

cur

renc

y.

finan

cial

st

atem

ents

fin

anci

al s

tate

men

ts.

How

ever

, an

ente

rpris

e no

rmal

ly u

ses

the

curr

ency

of

the

coun

try

in w

hich

it is

do

mic

iled.

T

he s

tand

ard

requ

ires

disc

losu

re o

f rea

son

for

usin

g ot

her c

urre

ncy

and

chan

ge in

the

repo

rtin

g cu

rren

cy.

If

an

entit

y se

lect

s a

pres

enta

tion

(rep

ortin

g)

curr

ency

whi

ch is

diff

eren

t fr

om th

e fu

nctio

nal

curr

ency

, the

sta

ndar

d re

quire

s th

e fin

anci

al

stat

emen

t to

be tr

ansl

ated

fr

om fu

nctio

nal c

urre

ncy

to

pres

enta

tion

curr

ency

.

Inve

ntor

ies

of a

se

rvic

e pr

ovid

erIn

d AS

2Sc

ope

A

S 2

excl

udes

wor

k in

pr

ogre

ss a

risin

g in

the

ordi

nary

cou

rse

of b

usin

ess

of s

ervi

ce p

rovi

ders

.

In

d AS

2 in

clud

es p

rovi

sion

s re

latin

g to

the

wor

k-in

-pr

ogre

ss o

f a s

ervi

ce

prov

ider

. Ser

vice

pro

vide

rs

gene

rally

acc

umul

ate

cost

in

resp

ect o

f eac

h se

rvic

e fo

r w

hich

a s

epar

ate

sellin

g pr

ice

will

be c

harg

ed.

Ther

efor

e, e

ach

such

se

rvic

e is

trea

ted

as a

se

para

te it

em.

| The New Axis of Financial Reporting � Ind AS and ICDS 27 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

ASIn

vent

orie

s of

co

mm

odity

br

oker

-tra

ders

Ind

AS 2

Scop

e

No

such

gui

danc

e in

AS

2.

Ind

AS 2

doe

s no

t app

ly to

th

e m

easu

rem

ent o

f in

vent

orie

s he

ld b

y co

mm

odity

bro

ker-

trad

ers

who

mea

sure

thei

r in

vent

orie

s at

fair

valu

e le

ss

cost

to s

ell.

Inve

ntor

ies

acqu

ired

on

defe

rred

se

ttle

men

t te

rms

Ind

AS 2

Valu

atio

n

The

re is

no

spec

ific

guid

ance

un

der

AS 2

for t

he

trea

tmen

t of i

nven

torie

s ac

quire

d on

def

erre

d se

ttle

men

t ter

ms.

As

such

pu

rcha

se p

rice

unde

r de

ferr

ed s

ettle

men

t is

gene

rally

con

side

red

as c

ost

of in

vent

ory

unle

ss in

tere

st

is s

peci

fied

in th

e ar

rang

emen

t.

AS

prov

ides

that

Inte

rest

an

d ot

her b

orro

win

g co

sts

are

usua

lly c

onsi

dere

d as

no

t rel

atin

g to

brin

ging

the

inve

ntor

ies

to th

eir p

rese

nt

loca

tion

and

cond

ition

and

ar

e, th

eref

ore,

usu

ally

not

in

clud

ed in

the

cost

of

inve

ntor

ies.

W

hen

arra

ngem

ent

effe

ctiv

ely

cont

ains

fin

anci

ng e

lem

ents

for

exam

ple

whe

re in

vent

ory

is

acqu

ired

on d

efer

red

sett

lem

ent t

erm

s, a

di

ffer

ence

bet

wee

n th

e pu

rcha

se p

rice

for n

orm

al

cred

it te

rms

and

the

amou

nt p

aid

is re

cogn

ised

as

inte

rest

exp

ense

ove

r the

pe

riod

of th

e fin

anci

ng.

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 28RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

ASIn

vent

orie

sIn

d AS

2Co

st fo

rmul

a

AS

2 do

es n

ot e

xpre

ssly

m

anda

ted

that

sa

me

cost

form

ula

shou

ld b

e us

ed

for a

ll inv

ento

ries

that

hav

e a

sim

ilar n

atur

e an

d us

e to

th

e en

tity.

A

S re

quire

s th

at th

e fo

rmul

a us

ed s

houl

d re

flect

the

faire

st p

ossi

ble

appr

oxim

atio

n to

the

cost

in

curr

ed in

brin

ging

the

item

s of

inve

ntor

y to

thei

r pr

esen

t loc

atio

n an

d co

nditi

on.

A

n en

tity

shal

l use

the

sam

e co

st fo

rmul

a fo

r all

inve

ntor

ies

that

hav

e a

sim

ilar n

atur

e an

d us

e to

the

entit

y.

Cash

flow

st

atem

ents

Ind

AS 7

Pres

enta

tion

and

disc

losu

re

AS

3 is

not

man

dato

ry fo

r SM

C�s

. How

ever

, it m

ay b

e no

ted

that

the

Com

pani

es

Act,

2013

man

date

s pr

epar

atio

n of

cas

h flo

w

stat

emen

ts e

xcep

t for

One

Pe

rson

Com

pany

, Sm

all

Com

pany

and

Dor

man

t Co

mpa

ny.

C

ash

flow

sta

tem

ent i

s a

com

pone

nt o

f com

plet

e se

t of

fina

ncia

l sta

tem

ents

, it is

m

anda

tory

for a

ll ent

ities

ap

plyi

ng In

d AS

.

T

here

is n

o st

ipul

atio

n in

AS

3 fo

r cla

ssifi

catio

n of

ban

k ov

erdr

afts

.

B

ank

borr

owin

gs a

re

norm

ally

par

t of f

inan

cing

ac

tiviti

es. N

onet

hele

ss,

bank

ove

rdra

fts

that

are

| The New Axis of Financial Reporting � Ind AS and ICDS 29 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

repa

yabl

e on

dem

and

and

that

form

an

inte

gral

par

t of

an e

ntity

�s c

ash

man

agem

ent a

re in

clud

ed in

ca

sh e

quiv

alen

ts.

T

he c

ash

flow

s as

soci

ated

w

ith e

xtra

ordi

nary

item

s sh

ould

be

clas

sifie

d as

ar

isin

g fr

om o

pera

ting,

in

vest

ing

or fi

nanc

ing

activ

ities

as

appr

opria

te a

nd

sepa

rate

ly d

iscl

osed

.

U

nder

Ind

AS, a

n en

tity

shal

l no

t pre

sent

ext

ra-o

rdin

ary

item

s, h

ence

dis

clos

ure

of

the

sam

e in

cas

h flo

w

stat

emen

t is

proh

ibite

d.

N

o gu

idan

ce in

AS.

C

ash

rece

ipts

from

rent

s an

d su

bseq

uent

sal

es o

f su

ch a

sset

s ar

e al

so c

ash

flow

s fr

om o

pera

ting

activ

ities

.

Chan

ge in

ac

coun

ting

polic

y

Ind

AS 8

Reco

gniti

on a

nd

Mea

sure

men

t

AS

perm

it ch

ange

in

acco

untin

g po

licy

if re

quire

d by

sta

tute

.

In

d AS

doe

s no

t pro

vide

for

chan

ge in

acc

ount

ing

polic

y be

caus

e of

requ

irem

ent o

f st

atut

e.

The

impa

ct o

f cha

nge

in a

n ac

coun

ting

polic

y vo

lunt

arily

or o

ther

wis

e is

to

be

adju

sted

aga

inst

cu

rren

t per

iods

pro

fit a

nd

A

cha

nge

in a

ccou

ntin

g po

licy

volu

ntar

ily o

r in

case

w

here

Ind

AS d

oes

not

incl

ude

spec

ific

tran

sitio

nal

prov

isio

ns s

hall b

e ap

plie

d

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 30RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

retr

ospe

ctiv

ely

exce

pt to

th

e cu

mul

ativ

e ef

fect

of t

he

chan

ge.

lo

ss a

ccou

nt. W

here

the

effe

ct o

f suc

h ch

ange

is n

ot

asce

rtai

nabl

e, w

holly

or i

n pa

rt, t

he fa

ct s

houl

d be

in

dica

ted.

C

ompa

rativ

e in

form

atio

n to

be

rest

ated

and

the

amou

nt

of th

e ad

just

men

ts re

latin

g to

prio

r per

iods

is a

djus

ted

agai

nst t

he o

peni

ng b

alan

ce

of e

ach

affe

cted

com

pone

nt

of e

quity

of t

he e

arlie

st

perio

d pr

esen

ted

and

othe

r co

mpa

rativ

e am

ount

s di

sclo

sed

for e

ach

prio

r pe

riod

as if

the

new

ac

coun

ting

polic

y ha

d al

way

s be

en a

pplie

d.

Prio

r per

iod

item

s (C

orre

ctio

n of

er

rors

)

Ind

AS 8

Scop

e

The

def

initi

on o

f prio

r per

iod

item

s is

rest

ricte

d to

inco

me

and

expe

nses

whi

ch a

rise

in

curr

ent p

erio

d as

a re

sult

of

erro

rs a

nd o

mis

sion

in th

e pr

epar

atio

ns o

f fin

anci

al

stat

emen

ts o

f prio

r pe

riod(

s).

T

he d

efin

ition

of p

rior p

erio

d ite

ms

is m

uch

broa

der a

s co

mpa

red

to A

S 5.

Prio

r pe

riod

erro

rs c

over

s al

l the

ite

ms

in th

e fin

anci

al

stat

emen

ts in

clud

ing

asse

ts

and

liabi

litie

s.

| The New Axis of Financial Reporting � Ind AS and ICDS 31 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

The

repo

rtin

g re

quire

men

ts

are

sim

ilar t

o ch

ange

s in

ac

coun

ting

polic

y.

A

ll prio

r-pe

riod

adju

stm

ents

ar

e di

sclo

sed

sepa

rate

ly in

cu

rren

t yea

r pro

fit a

nd lo

ss

acco

unt i

n a

man

ner t

hat i

ts

impa

ct o

n th

e re

sults

can

be

perc

eive

d.

Dis

clos

ure

of

non-

appl

icat

ion

of n

ew In

d AS

s

Ind

AS 8

Dis

clos

ure

N

o su

ch d

iscl

osur

es re

quire

d un

der A

S.

Ind

AS 8

requ

ires

whe

n an

en

tity

has

not a

pplie

d ne

w

Ind

ASs

that

has

bee

n is

sued

but

is n

ot y

et

effe

ctiv

e sh

all d

iscl

ose:

� t

his

fact

; and

�

kno

wn

or re

ason

ably

estim

able

info

rmat

ion

re

leva

nt to

ass

essi

ng th

e

poss

ible

impa

ct th

at

ap

plic

atio

n of

new

Ind

AS

w

ill ha

ve o

n th

e en

tity�

s

finan

cial

sta

tem

ents

in

th

e pe

riod

of in

itial

appl

icat

ion.

Cont

inge

ncie

s an

d Ev

ents

O

ccur

ring

Afte

r th

e Ba

lanc

e Sh

eet D

ate

Ind

AS 10

Reco

gniti

on a

nd

Mea

sure

men

t

As

per A

S 4

divi

dend

pr

opos

ed o

r dec

lare

d af

ter

the

bala

nce

shee

t dat

e bu

t be

fore

app

rova

l of f

inan

cial

st

atem

ent a

re re

quire

d to

be

adju

sted

(i.e

acc

ount

ed).

D

ivid

end

decl

ared

aft

er th

e re

port

ing

perio

d, th

e en

tity

shal

l not

reco

gnis

e th

ose

divi

dend

s as

a lia

bilit

y as

the

end

of th

e re

port

ing

perio

d.

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 32RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

Cont

inge

ncie

s an

d Ev

ents

O

ccur

ring

Afte

r th

e Ba

lanc

e Sh

eet D

ate

Ind

AS 10

Dis

clos

ure

A

S 4

requ

ires

disc

losu

re in

th

e re

port

of t

he a

ppro

ving

au

thor

ity, f

or e

xam

ple,

the

boar

d re

port

for t

hose

ev

ents

occ

urrin

g af

ter t

he

bala

nce

shee

t dat

e th

at

repr

esen

t mat

eria

l cha

nges

an

d co

mm

itmen

ts a

ffec

ting

the

finan

cial

pos

ition

of t

he

entit

y.

A

n en

tity

shal

l dis

clos

e fo

r ea

ch m

ater

ial c

ateg

ory

of

non-

adju

stin

g ev

ent a

fter

th

e re

port

ing

perio

d, n

atur

e of

eve

nt a

nd e

stim

ate

of it

s fin

anci

al e

ffec

t, or

a

stat

emen

t tha

t suc

h an

es

timat

e ca

nnot

be

mad

e.

N

o su

ch d

iscl

osur

e re

quire

d by

AS.

A

n en

tity

shal

l dis

clos

e th

e da

te w

hen

the

finan

cial

st

atem

ents

wer

e ap

prov

ed

for i

ssue

and

who

gav

e th

at

appr

oval

. If th

e en

tity�

s ow

ners

or o

ther

s ha

ve th

e po

wer

to a

men

d th

e fin

anci

al s

tate

men

ts a

fter

is

sue,

the

entit

y sh

all

disc

lose

that

fact

.

Inco

me

Taxe

sIn

d AS

12Re

cogn

ition

U

nder

AS

22, d

efer

red

tax

is

reco

gnis

ed fo

r all t

he ti

min

g di

ffer

ence

s. T

imin

g di

ffer

ence

s ar

e th

e di

ffer

ence

s be

twee

n ta

xabl

e in

com

e an

d ac

coun

ting

inco

me

for a

per

iod

that

U

nder

Ind

AS, d

efer

red

tax

is

reco

gnis

ed fo

r all t

axab

le

tem

pora

ry d

iffer

ence

s.

Tem

pora

ry d

iffer

ence

s ar

e di

ffer

ence

s be

twee

n th

e ca

rryi

ng a

mou

nt o

f an

asse

t or

liabi

lity

in th

e ba

lanc

e

| The New Axis of Financial Reporting � Ind AS and ICDS 33 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

or

igin

ate

in o

ne p

erio

d an

d ar

e ca

pabl

e of

reve

rsal

in

one

or m

ore

subs

eque

nt

perio

ds.

s

heet

and

its

tax

base

.

Inco

me

Taxe

sIn

d AS

12Re

cogn

ition

- re

valu

atio

n

On

reva

luat

ion

of

depr

ecia

ble

asse

ts in

boo

ks,

the

diff

eren

ce is

trea

ted

as

perm

anen

t diff

eren

ce a

nd

no d

efer

red

tax

is

reco

gnis

ed.

D

efer

red

tax

is c

reat

ed o

n di

ffer

ence

bet

wee

n th

e ca

rryi

ng v

alue

and

tax

base

.

Inco

me

Taxe

sIn

d AS

12Re

cogn

ition

U

nder

AS-

22 n

o su

ch

spec

ific

exce

ptio

ns a

re

prov

ided

.

D

efer

red

tax

is n

ot

reco

gnis

ed fo

r the

follo

win

g:

� D

efer

red

tax

liabi

lity

ar

ises

from

the

initi

al

re

cogn

ition

of g

oodw

ill or

�

Def

erre

d ta

x as

set o

r

liabi

lity

aris

es fr

om th

e

initi

al re

cogn

ition

of

an

ass

et o

r lia

bilit

y in

a

tr

ansa

ctio

n w

hich

:

i)

is n

ot a

bus

ines

s

co

mbi

natio

n; a

nd

ii)

at t

he ti

me

of th

e

tr

ansa

ctio

n, a

ffec

ts

neith

er a

ccou

ntin

g

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 34RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

pr

ofit

nor t

axab

le p

rofit

(t

ax lo

ss).

Inco

me

Taxe

s In

d AS

12Re

cogn

ition

of

defe

rred

tax

asse

ts in

cas

e of

ta

x lo

sses

D

efer

red

tax

asse

ts s

houl

d be

reco

gnis

ed a

nd c

arrie

d fo

rwar

d on

ly to

the

exte

nt

that

ther

e is

a re

ason

able

ce

rtai

nty

that

suf

ficie

nt

futu

re ta

xabl

e in

com

e w

ill be

ava

ilabl

e ag

ains

t whi

ch

such

def

erre

d ta

x as

sets

ca

n be

real

ized

.

A

def

erre

d ta

x as

set s

hall b

e re

cogn

ised

for t

he c

arry

fo

rwar

d of

unu

sed

tax

loss

es a

nd u

nuse

d ta

x cr

edits

to th

e ex

tent

that

it

is p

roba

ble

that

futu

re

taxa

ble

prof

it w

ill be

av

aila

ble

agai

nst w

hich

the

unus

ed ta

x lo

sses

and

un

used

tax

cred

its c

an b

e ut

ilized

.

W

here

an

ente

rpris

e ha

s un

abso

rbed

dep

reci

atio

n or

ca

rry

forw

ard

of lo

sses

un

der t

ax la

ws,

def

erre

d ta

x as

sets

sho

uld

be re

cogn

ised

on

ly to

the

exte

nt th

at th

ere

is v

irtua

l cer

tain

ty

supp

orte

d by

con

vinc

ing

evid

ence

that

suf

ficie

nt

futu

re ta

xabl

e in

com

e w

ill be

ava

ilabl

e

aga

inst

w

hich

suc

h de

ferr

ed ta

x as

sets

can

be

real

ized

.

| The New Axis of Financial Reporting � Ind AS and ICDS 35 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

Inco

me

Tax

esIn

d AS

12Re

cogn

ition

-co

nsol

idat

ion

D

efer

red

tax

expe

nse

/inc

ome

is a

ggre

gate

d fr

om

sepa

rate

fina

ncia

l st

atem

ents

of t

he G

roup

en

tity

and

no a

djus

tmen

ts

are

mad

e on

con

solid

atio

n.

A

n en

tity

shal

l rec

ogni

se a

de

ferr

ed ta

x lia

bilit

y fo

r all

taxa

ble

tem

pora

ry

diff

eren

ces

asso

ciat

ed w

ith

inve

stm

ents

in s

ubsi

diar

ies,

br

anch

es a

nd a

ssoc

iate

s,

and

inte

rest

s in

join

t ar

rang

emen

ts, e

xcep

t to

the

exte

nt th

at b

oth

of th

e fo

llow

ing

cond

ition

s ar

e sa

tisfie

d:

(a)

the

pare

nt, in

vest

or,

join

t ven

ture

r or j

oint

op

erat

or is

abl

e to

co

ntro

l the

tim

ing

of

the

reve

rsal

of t

he

tem

pora

ry d

iffer

ence

;

an

d

(b)

it is

pro

babl

e th

at th

e

te

mpo

rary

diff

eren

ce

will

not r

ever

se in

the

fore

seea

ble

futu

re.

N

o de

ferr

ed ta

x is

re

cogn

ised

on

elim

inat

ion

of

intr

a-gr

oup

tran

sact

ions

.

D

efer

red

tax

shou

ld b

e ca

lcul

ated

on

tem

pora

ry

diff

eren

ces

that

aris

e fr

om

the

elim

inat

ion

of p

rofit

s

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 36RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

an

d lo

sses

resu

lting

from

in

tra

grou

p tr

ansa

ctio

ns.

Inco

me

Taxe

sIn

d AS

12D

iscl

osur

es

AS

does

not

man

date

suc

h di

sclo

sure

s.

Ind

AS re

quire

s di

sclo

sure

of

reco

ncilia

tion

betw

een

the

aver

age

effe

ctiv

e ta

x ra

te

and

the

appl

icab

le ta

x ra

te,

pote

ntia

l inco

me

tax

cons

eque

nces

that

wou

ld

resu

lt fr

om th

e pa

ymen

t of

divi

dend

s to

its

shar

ehol

ders

, etc

.Ac

coun

ting

for

PPE

� P

urch

ase

cost

Ind

AS 16

Valu

atio

n

Sim

ilar t

o In

d AS

exc

ept n

o gu

idan

ce is

giv

en fo

r ca

pita

lizat

ion

of d

ism

antli

ng

and

site

rest

orat

ion

cost

. H

owev

er, t

he G

uida

nce

note

on

Acc

ount

ing

for O

il and

G

as P

rodu

cing

Act

iviti

es

stat

es th

at e

ntiti

es in

volv

ed

in th

ose

shou

ld c

apita

lize

the

dism

antli

ng a

nd s

ite

rest

orat

ion

cost

.

P

urch

ase

cost

of P

PE

incl

udes

:

1. pu

rcha

se p

rice

(less

any

disc

ount

s an

d re

bate

s);

2.

impo

rt d

utie

s, n

on-

re

fund

able

taxe

s;

3.

any

dire

ctly

att

ribut

able

cost

s of

brin

ging

the

as

set t

o its

wor

king

cond

ition

; and

4.

the

initi

al e

stim

ate

of th

e

cost

s of

dis

man

tling

and

rem

ovin

g th

e ite

m a

nd

re

stor

ing

the

site

on

whi

ch it

is lo

cate

d.

| The New Axis of Financial Reporting � Ind AS and ICDS 37 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

Reva

luat

ion

of

PPE

Ind

AS 16

Valu

atio

n an

d m

easu

rem

ent

A

s pe

r AS

10 fi

xed

asse

ts

are

carr

ied

at c

ost l

ess

accu

mul

ated

dep

reci

atio

n.

In

d AS

16 re

quire

d an

ent

ity

to c

hoos

e ei

ther

cos

t mod

el

or re

valu

atio

n m

odel

as

its

acco

untin

g po

licy

and

shal

l ap

ply

that

pol

icy

to a

n en

tire

clas

s of

PPE

.

T

here

is n

o re

quire

men

t to

perf

orm

reva

luat

ions

at

regu

lar i

nter

vals

.

W

hen

entit

y ap

plie

s re

valu

atio

n m

odel

it re

quire

s re

gula

r rev

alua

tions

of a

ll PP

E (s

ay 3

to 5

yea

rs).

In

case

of i

tem

of P

PE

expe

rienc

e si

gnifi

cant

and

vo

latil

e ch

ange

s in

fair

valu

e,

annu

al re

valu

atio

n m

ay b

e ne

cess

ary.

Man

agem

ent

mus

t con

side

r at e

ach

year

en

d w

heth

er fa

ir va

lue

is

mat

eria

lly d

iffer

ent f

rom

ca

rryi

ng v

alue

.

Whe

n re

valu

atio

n do

es n

ot

cove

rs a

ll ass

ets

of th

e gi

ven

clas

s, it

is a

ppro

pria

te

that

the

sele

ctio

n of

the

asse

t to

be re

valu

ed b

e m

ade

on s

yste

mat

ic b

asis

, e.

g. a

n en

tity

may

reva

lue

a cl

ass

of a

sset

s w

ithin

one

If

an

item

of P

PE is

reva

lued

, th

e en

tire

clas

s of

PPE

to

whi

ch th

at a

sset

bel

ongs

sh

all b

e re

valu

ed.

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 38RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

u

nit a

nd ig

nore

ass

ets

of

the

sam

e cl

ass

at a

noth

er

unit.

As

such

und

er A

S en

tire

clas

s of

PPE

is n

ot

requ

ired

to b

e re

valu

ed.

Reva

luat

ion

of

PPE

Ind

AS 16

Valu

atio

n an

d m

easu

rem

ent �

Co

st o

f maj

or

repa

ir/ in

spec

tion

C

ost o

f rep

air i

s ch

arge

d to

pr

ofit

and

loss

.

Suc

h co

sts

are

requ

ired

to

be c

apita

lised

if s

atis

fy th

e re

cogn

ition

crit

eria

laid

do

wn

in th

e In

d AS

. H

owev

er, c

arry

ing

amou

nt

of s

imila

r cos

t cap

italis

ed

earli

er n

eeds

to b

e de

reco

gnis

ed.

Resi

dual

val

ue

and

usef

ul lif

e of

an

ass

et

Ind

AS 16

Mea

sure

men

t

Und

er A

S, p

erio

dic

revi

ew o

f re

sidu

al v

alue

and

use

ful li

fe

of a

n as

set n

ot s

peci

fical

ly

requ

ired.

A

n en

tity

need

s to

revi

ew

resi

dual

val

ue a

nd u

sefu

l life

of

an

asse

t at l

east

at e

ach

finan

cial

yea

r end

.

Dep

reci

atio

n Ac

coun

ting

�

Chan

ge in

m

etho

d of

D

epre

ciat

ion

Ind

AS 16

Reco

gniti

on a

nd

Mea

sure

men

t

The

met

hod

of d

epre

ciat

ion

is a

pplie

d co

nsis

tent

ly to

pr

ovid

e co

mpa

rabi

lity

of th

e re

sults

of t

he o

pera

tions

of

the

ente

rpris

e fr

om p

erio

d to

per

iod.

D

epre

ciat

ion

met

hod

appl

ied

shal

l be

revi

ewed

at

leas

t at e

ach

finan

cial

yea

r en

d.

C

hang

e in

dep

reci

atio

n m

etho

d is

trea

ted

as c

hang

e in

acc

ount

ing

polic

ies

and

C

hang

e in

met

hod

of

depr

ecia

tion

is tr

eate

d as

ch

ange

in a

ccou

ntin

g

| The New Axis of Financial Reporting � Ind AS and ICDS 39 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

im

pact

is d

eter

min

ed b

y re

tros

pect

ivel

y co

mpu

ting

depr

ecia

tion

unde

r new

m

etho

d an

d th

e im

pact

is

reco

rded

in th

e pe

riod

of

chan

ge.

Leas

esIn

d AS

17Sc

ope

A

S 19

exc

lude

s le

ase

agre

emen

t to

use

land

s fr

om it

s sc

ope.

In

d AS

17 d

oes

not e

xclu

de

leas

e ag

reem

ent t

o us

e la

nds

from

its

scop

e.

es

timat

es, r

efle

cted

in th

e de

prec

iatio

n ch

arge

for t

he

curr

ent a

nd p

rosp

ectiv

e ye

ars.

Le

aseh

old

prem

ium

is

capi

taliz

ed a

s fix

ed a

sset

s an

d am

ortis

ed o

ver t

he

perio

d of

the

leas

e.

Le

ase

of la

nd w

ould

be

trea

ted

as p

er c

lass

ifica

tion

of th

e le

ase

in a

ccor

danc

e w

ith th

e In

d AS

(i.e

op

erat

ing

or fi

nanc

e).

Leas

es -

Initi

al

dire

ct c

ost

Ind

AS 17

Mea

sure

men

t

AS

19 re

quire

s in

itial

dire

ct

cost

i.e. c

omm

issi

on a

nd

lega

l fee

s in

curr

ed b

y le

ssor

w

ith re

spec

t to

finan

ce

leas

e to

be

eith

er c

harg

ed

off a

t the

tim

e of

incu

rren

ce

or to

be

amor

tised

ove

r the

le

ase

perio

d.

Initi

al d

irect

cos

ts in

curr

ed

spec

ifica

lly to

ear

n re

venu

es

from

an

oper

atin

g le

ase

are

defe

rred

and

allo

cate

d to

In

d AS

17 p

resc

ribes

initi

al

dire

ct c

ost i

ncur

red

by

less

or to

be

incl

uded

in le

ase

rece

ivab

le a

mou

nt in

cas

e of

fin

ance

leas

e an

d in

the

carr

ying

am

ount

of t

he

asse

t in

case

of o

pera

ting

leas

e re

cogn

ised

as

an

expe

nse

over

the

leas

e te

rm o

n th

e sa

me

basi

s as

th

e le

ase

inco

me.

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 40RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

in

com

e ov

er th

e le

ase

term

in

pro

port

ion

to th

e re

cogn

ition

of r

ent i

ncom

e,

or a

re re

cogn

ised

as

an

expe

nse

in th

e st

atem

ent o

f pr

ofit

and

loss

in th

e pe

riod

in w

hich

they

are

incu

rred

.Sa

le a

nd

leas

ebac

kIn

d AS

17Re

cogn

ition

S

ale

and

leas

ebac

k w

hich

re

sults

in a

fina

nce

leas

e,

AS 19

requ

ires

exce

ss/

defic

ienc

y bo

th to

be

defe

rred

and

am

ortis

ed

over

the

leas

e te

rm in

pr

opor

tion

to th

e de

prec

iatio

n of

the

leas

ed

asse

t.

If

sal

e an

d le

aseb

ack

tran

sact

ion

resu

lts in

a

finan

ce le

ase,

any

exc

ess

of

sale

s pr

ocee

ds o

ver t

he

carr

ying

am

ount

sha

ll not

be

imm

edia

tely

reco

gnis

ed

as in

com

e by

a s

elle

r-le

ssee

. Inst

ead,

it s

hall b

e de

ferr

ed a

nd a

mor

tised

ov

er th

e le

ase

term

.

Leas

e of

land

Ind

AS 17

Reco

gniti

on

AS

19 e

xclu

des

leas

e of

land

fr

om it

s sc

ope.

Leas

es o

f lan

d ar

e cl

assi

fied

as o

pera

ting

or fi

nanc

e le

ases

in th

e sa

me

way

as

leas

es o

f oth

er a

sset

s.

H

owev

er, a

cha

ract

eris

tic o

f la

nd is

that

it n

orm

ally

has

an

inde

finite

eco

nom

ic lif

e an

d, if

title

is n

ot e

xpec

ted

to p

ass

to th

e le

ssee

by

the

end

of th

e le

ase

term

, the

| The New Axis of Financial Reporting � Ind AS and ICDS 41 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

Leas

es

Ind

AS 17

Dis

clos

ure

A

S 19

requ

ires

disc

losu

re fo

r ac

coun

ting

polic

y re

latin

g th

eret

o in

the

finan

cial

st

atem

ents

of t

he le

ssor

.

In

d AS

17 d

oes

not m

anda

te

any

acco

untin

g po

licy

rela

ted

disc

losu

re.

le

ssee

nor

mal

ly d

oes

not

rece

ive

subs

tant

ially

all o

f th

e ris

ks a

nd re

war

ds

inci

dent

al to

ow

ners

hip,

in

whi

ch c

ase

the

leas

e of

land

w

ill be

an

oper

atin

g le

ase.

Empl

oyee

be

nefit

s �

Ac

tuar

ial g

ains

or

loss

es

Ind

AS 19

Reco

gniti

on

Act

uaria

l gai

ns o

r los

ses

shou

ld b

e r

ecog

nise

d im

med

iate

ly in

the

prof

it an

d lo

ss a

ccou

nt u

nder

AS

15.

A

ctua

rial g

ains

or l

osse

s to

be

re

cogn

ised

imm

edia

tely

in

Oth

er C

ompr

ehen

sive

In

com

e as

per

Ind

AS 19

.

Borr

owin

g co

sts

Ind

AS 2

3Sc

ope

T

here

is n

o su

ch e

xclu

sion

un

der A

S 16

.

An

entit

y is

not

requ

ired

to

appl

y In

d AS

23

to

borr

owin

g co

sts

dire

ctly

at

trib

utab

le to

the

acqu

isiti

on, c

onst

ruct

ion

or

prod

uctio

n of

a q

ualif

ying

as

set,

mea

sure

d at

fair

valu

e.

Borr

owin

g co

sts

Ind

AS 2

3D

efin

ition

A

S de

finiti

on is

sim

ilar t

o In

d AS

exc

ept s

ubst

antia

l pe

riod

of ti

me

has

been

Q

ualif

ying

ass

ets

are

thos

e th

at re

quire

a s

ubst

antia

l pe

riod

of ti

me

to g

et re

ady

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 42RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

Borr

owin

g co

sts

Ind

AS 2

3D

iscl

osur

e

No

such

dis

clos

ure

requ

ired

unde

r AS

16.

T

he d

iscl

osur

e re

quire

men

ts

of In

d AS

23

requ

ire th

e en

tity

to d

iscl

ose

sepa

rate

ly

the

capi

taliz

atio

n ra

te u

sed

to d

eter

min

e th

e am

ount

of

borr

owin

g co

sts.

fo

r the

ir in

tend

ed u

se o

r sa

le.

in

terp

rete

d to

gen

eral

ly

mea

n m

ore

than

12 m

onth

s.

Rela

ted

part

y di

sclo

sure

Ind

AS 2

4D

efin

ition

A

S 18

cov

ers

only

rela

tives

of

Key

man

agem

ent

pers

onne

l.

U

nder

Ind

AS 2

4, R

elat

ed

part

y co

vers

clo

se

mem

bers

of f

amily

of a

ny

indi

vidu

al re

ferr

ed to

as

follo

ws:

�

Key

man

agem

ent

pe

rson

nel o

r

� A

par

ty w

ho e

xerc

ise

co

ntro

l or s

igni

fican

t

influ

ence

A

S 18

doe

s no

t inc

lude

pos

t em

ploy

men

t ben

efit

plan

as

rela

ted

part

y.

In

d AS

24

incl

udes

pos

t em

ploy

men

t ben

efit

plan

for

the

bene

fit o

f em

ploy

ees

of

the

entit

y or

of a

ny e

ntity

th

at is

rela

ted

part

y to

the

repo

rtin

g en

tity.

| The New Axis of Financial Reporting � Ind AS and ICDS 43 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 44RSM

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

Rela

ted

part

y di

sclo

sure

Ind

AS 2

4D

efin

ition

s

Und

er A

S 18

Con

trol

is

defin

ed a

s:�

Ow

ners

hip,

dire

ctly

or

indi

rect

ly, o

f mor

e th

an o

ne

half

of th

e vo

ting

pow

er o

f th

e en

terp

rises

, or

� C

ontr

ol o

f the

com

posi

tion

of b

oard

of d

irect

ors

in th

e ca

se o

f a c

ompa

ny o

r of t

he

com

posi

tion

of

corr

espo

ndin

g go

vern

ing

body

in c

ase

of a

ny o

ther

en

terp

rises

, or

� A

sub

stan

tial in

tere

st in

vo

ting

pow

er a

nd th

e po

wer

to

dire

ct, b

y st

atut

e or

ag

reem

ent,

the

finan

cial

an

d/or

ope

ratin

g po

licie

s of

th

e en

terp

rises

.

In

d AS

24

does

not

def

ine

the

term

Con

trol

. It u

ses

that

the

term

as

defin

ed in

In

d AS

110.

Con

trol

is

inve

stor

�s c

urre

nt a

bilit

y to

di

rect

the

rele

vant

act

ivity

of

the

inve

stee

and

hav

ing

right

to v

aria

ble

retu

rns

fr

om it

s in

volv

emen

t and

ab

ility

to u

se it

s po

wer

to

affe

ct th

ose

retu

rns.

Rela

ted

part

y di

sclo

sure

� K

ey

man

agem

ent

pers

onne

l

Ind

AS 2

4D

efin

ition

A

non

-exe

cutiv

e di

rect

or o

f a

com

pany

is n

ot c

onsi

dere

d as

a k

ey m

anag

emen

t pe

rson

und

er A

S 18

unl

ess

he h

as th

e au

thor

ity a

nd

resp

onsi

bilit

y fo

r pla

nnin

g,

dire

ctin

g an

d co

ntro

lling

the

K

ey m

anag

emen

t per

sonn

el

are

thos

e pe

rson

s ha

ving

au

thor

ity a

nd re

spon

sibi

lity

for p

lann

ing,

dire

ctin

g an

d co

ntro

lling

the

activ

ities

of

the

entit

y, d

irect

ly o

r in

dire

ctly

, incl

udin

g an

y

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

Ind

AS 2

4

activ

ities

of t

he re

port

ing

ente

rpris

es.

di

rect

or (w

heth

er e

xecu

tive

or o

ther

wis

e) o

f tha

t ent

ity.

Rela

ted

part

y

disc

losu

reIn

d AS

24

Dis

clos

ure

T

here

is n

o su

ch d

iscl

osur

e

requ

irem

ent u

nder

AS

18.

In

d AS

24

requ

ires

disc

losu

re

of te

rms

and

cond

ition

s of

ou

tsta

ndin

g ite

ms

pert

aini

ng to

rela

ted

part

ies.

Rela

ted

part

y di

sclo

sure

�

mat

eria

l tr

ansa

ctio

ns

Ind

AS 2

4D

iscl

osur

e

As

per A

S 18

ord

inar

ily a

re

late

d pa

rty

tran

sact

ion

the

amou

nt o

f whi

ch is

in

exce

ss o

f 10%

of t

he to

tal

rela

ted

part

y tr

ansa

ctio

ns

of th

e sa

me

type

is

cons

ider

ed m

ater

ial.

It

ems

of a

sim

ilar n

atur

e m

ay b

e di

sclo

sed

in

aggr

egat

e, b

ut In

d AS

doe

s no

t per

mit

club

bing

on

mat

eria

l rel

ated

par

ty

tran

sact

ion

with

an

indi

vidu

al p

arty

in th

e ag

greg

ate

disc

losu

re. In

d AS

24

als

o do

es n

ot p

rovi

de

guid

ance

sim

ilar t

o AS

18 o

n w

hat i

s co

nsid

ered

to b

e m

ater

ial t

rans

actio

n.

Inve

stm

ent i

n A

ssoc

iate

s-Si

gnifi

cant

in

fluen

ce

Ind

AS 2

8D

efin

ition

S

imila

r to

Ind

AS. U

nder

AS

23 s

igni

fican

t inf

luen

ce is

th

e po

wer

to p

artic

ipat

e in

th

e fin

anci

al a

nd/o

r op

erat

ing

polic

y de

cisi

ons

of

the

inve

stee

but

not

con

trol

ov

er th

ose

polic

ies.

The

w

ord

�or�

is n

ot th

ere

in In

d

S

igni

fican

t inf

luen

ce is

the

pow

er to

par

ticip

ate

in th

e fin

anci

al a

nd o

pera

ting

polic

y de

cisi

ons

of th

e in

vest

ee b

ut is

not

con

trol

or

join

t con

trol

ove

r tho

se

polic

ies.

If a

n in

vest

or h

olds

, di

rect

ly o

r ind

irect

ly (e

.g.

| The New Axis of Financial Reporting � Ind AS and ICDS 45 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

AS

28.

The

refo

re u

nder

Ind

AS 2

8 th

e po

wer

to

part

icip

ate

shou

ld e

xist

for

both

fina

ncia

l and

ope

ratin

g po

licie

s; w

here

as u

nder

AS

23,

eith

er o

ne w

ould

su

ffic

e to

det

erm

ine

sign

ifica

nt in

fluen

ce.

th

roug

h su

bsid

iarie

s), 2

0 pe

r cen

t or m

ore

of th

e vo

ting

pow

er o

f the

in

vest

ee, it

is p

resu

med

that

th

e in

vest

or h

as s

igni

fican

t in

fluen

ce, u

nles

s it

can

be

clea

rly d

emon

stra

ted

that

th

is is

not

the

case

.

A

s pe

r AS,

pot

entia

l vot

ing

right

s ar

e no

t con

side

red

for

dete

rmin

ing

sign

ifica

nt

influ

ence

.

T

he e

xist

ence

and

eff

ect o

f po

tent

ial v

otin

g rig

hts

that

ar

e cu

rren

tly e

xerc

isab

le o

r co

nver

tible

, incl

udin

g po

tent

ial v

otin

g rig

hts

held

by

oth

er e

ntiti

es, a

re

cons

ider

ed w

hen

asse

ssin

g w

heth

er a

n en

tity

has

sign

ifica

nt in

fluen

ce.

Inve

stm

ent i

n A

ssoc

iate

s-D

ispl

ay o

f go

odw

ill

Ind

AS 2

8Pr

esen

tatio

n an

d di

sclo

sure

G

oodw

ill or

cap

ital r

eser

ves

aris

ing

on th

e ac

quis

ition

of

asso

ciat

es s

houl

d be

in

clud

ed in

the

carr

ying

am

ount

of t

he in

vest

men

t, bu

t sho

uld

be d

iscl

osed

se

para

tely

.

G

oodw

ill on

acq

uisi

tion

is

incl

uded

in th

e ca

rryi

ng c

ost

of th

e in

vest

men

ts a

nd is

no

t req

uire

d to

be

disc

lose

d se

para

tely

. How

ever

, cap

ital

rese

rves

on

acqu

isiti

on a

re

dire

ctly

reco

gnis

ed in

equ

ity

as c

apita

l res

erve

.

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 46RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

Fina

ncia

l in

stru

men

ts�

pr

esen

tatio

n

Ind

AS 3

2Cl

assi

ficat

ion

N

o co

rres

pond

ing

stan

dard

s no

tifie

d un

der t

he

Com

pani

es A

ct, 2

013.

AS

30,

31 a

nd 3

2 on

the

topi

c is

sued

by

ICA

I are

not

m

anda

tory

.

T

he s

ubst

ance

of a

fina

ncia

l in

stru

men

t, ra

ther

than

its

lega

l for

m, g

over

ns it

s cl

assi

ficat

ion

in th

e en

tity�

s ba

lanc

e sh

eet.

Subs

tanc

e an

d le

gal f

orm

are

co

mm

only

con

sist

ent,

but

not a

lway

s.

P

refe

renc

e sh

ares

are

cl

assi

fied

as e

quity

.

In d

eter

min

ing

whe

ther

a

pref

eren

ce s

hare

is a

fin

anci

al lia

bilit

y or

an

equi

ty

inst

rum

ent,

an is

suer

as

sess

es th

e pa

rtic

ular

rig

hts

atta

chin

g to

the

shar

e to

det

erm

ine

whe

ther

it

exhi

bits

the

fund

amen

tal

char

acte

ristic

of a

fina

ncia

l lia

bilit

y.

S

imila

rly d

ivid

end

on

pref

eren

ce s

hare

s is

alw

ays

trea

ted

as a

ppro

pria

tion

of

prof

it /r

eser

ves.

D

ivid

end

on p

refe

renc

e sh

are

clas

sifie

d as

liabi

lity

wou

ld b

e c

lass

ified

as

inte

rest

exp

ense

.

Fina

ncia

l in

stru

men

ts

�pr

esen

tatio

n

Ind

AS 3

2Cl

assi

ficat

ion�

co

nver

tible

in

stru

men

ts

C

onve

rtib

le p

refe

renc

e sh

ares

are

cla

ssifi

ed a

s eq

uity

and

con

vert

ible

loan

s /

debe

ntur

es a

re c

lass

ified

In

d AS

requ

ires

split

ting

of

conv

ertib

le in

stru

men

ts a

s eq

uity

and

liabi

lity

base

d on

op

tions

and

con

trac

tual

| The New Axis of Financial Reporting � Ind AS and ICDS 47 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

a

s lia

bilit

y.te

rms

of th

e in

stru

men

ts,

subj

ect t

o ex

cept

ion

in c

ase

of fo

reig

n cu

rren

cy b

onds

.Ea

rnin

g pe

r sh

are

Ind

AS 3

3Pr

esen

tatio

n an

d D

iscl

osur

e

AS

20 d

oes

not s

peci

fical

ly

man

date

suc

h di

sclo

sure

.

As

per I

nd A

S 33

an

entit

y th

at re

port

s a

disc

ontin

ued

oper

atio

n sh

all d

iscl

ose

the

basi

c an

d di

lute

d EP

S fo

r di

scon

tinue

d op

erat

ions

ei

ther

in th

e st

atem

ent o

f pr

ofit

and

loss

or i

n th

e no

tes.

Earn

ing

per

shar

eIn

d AS

33

Dis

clos

ure-

man

dato

rily

conv

ertib

le

inst

rum

ent

N

ot s

peci

fical

ly c

over

ed in

AS

.

As

per I

nd A

S, to

con

side

r sh

ares

to b

e is

sued

upo

n co

nver

sion

in c

alcu

latio

n of

EP

S.In

terim

fina

ncia

l re

port

ing

/ Im

pairm

ent o

f as

sets

Ind

AS 3

4 &

36

Impa

irmen

t of

good

will

A

S 25

doe

s no

t pro

vide

any

gu

idan

ce in

this

rega

rds.

H

owev

er A

S 28

an

im

pairm

ent l

oss

reco

gnis

ed

for g

oodw

ill sh

ould

not

be

reve

rsed

in a

sub

sequ

ent

perio

d un

less

:

(a)

the

impa

irmen

t los

s

was

cau

sed

by a

spec

ific

exte

rnal

eve

nt

of

an

exce

ptio

nal

na

ture

that

is n

ot

A

n en

tity

is re

quire

d to

as

sess

goo

dwill

for

impa

irmen

t at t

he e

nd o

f ea

ch re

port

ing

perio

d, a

nd, if

re

quire

d, to

reco

gnis

e an

im

pairm

ent l

oss

at th

at d

ate

in a

ccor

danc

e w

ith In

d AS

36

. An

entit

y sh

all n

ot

reve

rse

an im

pairm

ent l

oss

reco

gnis

ed in

a p

revi

ous

inte

rim p

erio

d in

resp

ect o

f go

odw

ill.

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 48RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

expe

cted

to re

cur;

and

(b

) su

bseq

uent

ext

erna

l

even

ts h

ave

occu

rred

that

reve

rse

the

effe

ct

of

that

eve

nt.

Impa

irmen

t of

asse

tsIn

d AS

36

Goo

dwill

A

S re

quire

s an

ent

erpr

ise

to

asse

ss a

t eac

h ba

lanc

e sh

eet d

ate

whe

ther

ther

e is

an

y in

dica

tion

that

an

asse

t m

ay b

e im

paire

d. If

any

suc

h in

dica

tion

exis

ts, t

he

ente

rpris

e sh

ould

est

imat

e th

e r

ecov

erab

le a

mou

nt o

f th

e as

set.

In

d AS

requ

ires

good

will

acqu

ired

in a

bus

ines

s co

mbi

natio

n to

be

test

ed fo

r im

pairm

ent a

nnua

lly.

Prov

isio

ns,

Cont

inge

nt

Liab

ilitie

s an

d Co

ntin

gent

A

sset

s

Ind

AS 3

7Re

cogn

ition

-Pr

ovis

ions

P

rovi

sion

s ar

e ba

sed

on th

e be

st e

stim

ate.

No

deta

iled

guid

ance

is a

vaila

ble.

T

he a

mou

nt re

cogn

ised

as

prov

isio

n sh

ould

be

the

best

es

timat

e of

the

expe

nditu

re

requ

ired

to s

ettle

the

pres

ent o

blig

atio

n at

the

bala

nce

shee

t dat

e, d

etai

led

guid

ance

is a

vaila

ble

on

mea

sure

men

t.

T

he a

mou

nt o

f pro

visi

on

shou

ld n

ot b

e di

scou

nted

to

its p

rese

nt v

alue

.

W

here

the

effe

ct o

f tim

e va

lue

of m

oney

is m

ater

ial,

the

amou

nt o

f pro

visi

on

shou

ld b

e th

e pr

esen

t val

ue

| The New Axis of Financial Reporting � Ind AS and ICDS 49 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

Prov

isio

ns,

Cont

inge

nt

Liab

ilitie

s an

d Co

ntin

gent

A

sset

s -

Prov

isio

ns

Ind

AS 3

7Re

cogn

ition

R

estr

uctu

ring

prov

isio

n sh

ould

be

mad

e on

lega

l ob

ligat

ion.

R

estr

uctu

ring

prov

isio

n sh

ould

be

mad

e on

co

nstr

uctiv

e ob

ligat

ion.

of

the

expe

nditu

res

expe

cted

to b

e re

quire

d to

se

ttle

the

oblig

atio

n. T

he

disc

ount

rate

s sh

ould

not

re

flect

risk

s fo

r whi

ch fu

ture

ca

sh fl

ow e

stim

ates

hav

e be

en a

djus

ted.

Prov

isio

ns,

Cont

inge

nt

Liab

ilitie

s an

d Co

ntin

gent

A

sset

s

Ind

AS 3

7D

iscl

osur

e-Co

ntin

gent

ass

ets

A

con

tinge

nt a

sset

is n

ot

disc

lose

d in

fina

ncia

l st

atem

ents

.

A

con

tinge

nt a

sset

is

disc

lose

d in

fina

ncia

l st

atem

ents

whe

re a

n in

flow

of

eco

nom

ic b

enef

its is

pr

obab

le.

Inta

ngib

le

Ass

ets

- Su

bseq

uent

m

easu

re-m

ent

Ind

AS 3

8M

easu

rem

ent

A

fter

initi

al re

cogn

ition

, an

inta

ngib

le a

sset

sho

uld

be

carr

ied

at it

s co

st le

ss a

ny

accu

mul

ated

am

ortis

atio

n an

d an

y ac

cum

ulat

ed

impa

irmen

t los

ses.

A

n en

tity

shal

l cho

ose

eith

er th

e co

st m

odel

or t

he

reva

luat

ion

mod

el a

s its

ac

coun

ting

polic

y.

If

an

inta

ngib

le a

sset

is

acco

unte

d fo

r usi

ng th

e

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 50RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

re

valu

atio

n m

odel

, all t

he

othe

r ass

ets

in it

s cl

ass

shal

l al

so b

e ac

coun

ted

for u

sing

th

e sa

me

mod

el, u

nles

s th

ere

is n

o ac

tive

mar

ket f

or

thos

e as

sets

.

R

eval

uatio

n is

pro

hibi

ted.

R

eval

uatio

n m

odel

is

perm

itted

onl

y w

here

ther

e is

an

activ

e m

arke

t for

the

unde

rlyin

g in

tang

ible

s.

Inta

ngib

le

Ass

ets

- U

sefu

l lif

e

Ind

AS 3

8M

easu

rem

ent

T

here

is a

rebu

ttab

le

pres

umpt

ion

that

the

usef

ul

life

of a

n in

tang

ible

ass

et w

ill no

t exc

eed

ten

year

s fr

om

the

date

whe

n th

e as

set i

s av

aila

ble

for u

se.

A

n en

tity

shal

l ass

ess

whe

ther

the

usef

ul lif

e of

an

inta

ngib

le a

sset

is fi

nite

or

inde

finite

and

, if fi

nite

, the

le

ngth

of,

or n

umbe

r of

prod

uctio

n or

sim

ilar u

nits

th

at w

ould

con

stitu

te u

sefu

l lif

e.

Amor

tisat

ion

of

inta

ngib

le a

sset

sIn

d AS

38

Mea

sure

men

t

Am

ortis

atio

n is

bas

ed o

n al

loca

tion

of d

epre

ciab

le

amou

nt o

n a

syst

emat

ic

basi

s do

ne o

ver b

est

estim

ate

of u

sefu

l life

but

sh

ould

not

exc

eed

10 y

ears

, un

less

ther

e is

per

suas

ive

evid

ence

for a

mor

tisin

g

T

he d

epre

ciab

le a

mou

nt o

f an

inta

ngib

le a

sset

with

a

finite

use

ful li

fe s

hall b

e al

loca

ted

on a

sys

tem

atic

ba

sis

over

its

usef

ul lif

e.

Inta

ngib

le a

sset

with

in

defin

ite u

sefu

l life

is n

ot

amor

tised

but

is re

quire

d to

| The New Axis of Financial Reporting � Ind AS and ICDS 51 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

Impa

irmen

t of

inta

ngib

le a

sset

sIn

d AS

38

Mea

sure

men

t

In a

dditi

on to

the

requ

irem

ents

of A

S-28

, an

ente

rpris

e sh

ould

est

imat

e th

e re

cove

rabl

e am

ount

of

the

follo

win

g in

tang

ible

as

sets

at l

east

at e

ach

finan

cial

yea

r end

eve

n if

ther

e is

no

indi

catio

n th

at

the

asse

t is

impa

ired:

1. an

inta

ngib

le a

sset

that

is n

ot y

et a

vaila

ble

for

us

e; a

nd

2.

an in

tang

ible

ass

et th

at

is

am

ortis

ed o

ver a

perio

d ex

ceed

ing

ten

ye

ars

from

the

date

whe

n th

e as

set i

s

avai

labl

e fo

r use

.

A

n in

tang

ible

ass

et w

ith a

n in

defin

ite u

sefu

l life

and

w

hich

is n

ot y

et a

vaila

ble

for

use

shou

ld b

e te

sted

for

impa

irmen

t ann

ually

and

w

hene

ver t

here

is a

n in

dica

tion

that

the

inta

ngib

le

asse

t may

be

impa

ired.

ov

er a

long

er p

erio

d. B

oth

finite

life

and

inde

finite

life

inta

ngib

les

are

requ

ired

to

be a

mor

tised

.

be

test

ed fo

r im

pairm

ent.

Acco

untin

g fo

r In

vest

men

t -In

vest

men

t Pr

oper

ty

Ind

AS 4

0Sc

ope

A

n in

vest

men

t pro

pert

y is

an

inve

stm

ent i

n la

nd o

r bu

ildin

gs th

at a

re n

ot

inte

nded

to b

e oc

cupi

ed

subs

tant

ially

for u

se b

y, o

r

In

vest

men

t pro

pert

y is

pr

oper

ty (l

and

or a

bu

ildin

g�or

par

t of a

bu

ildin

g�or

bot

h) h

eld

(by

the

owne

r or b

y th

e le

ssee

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 52RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

Acco

untin

g fo

r In

vest

men

t -In

vest

men

t Pr

oper

ty

Ind

AS 4

0M

easu

rem

ent

A

n en

terp

rise

hold

ing

inve

stm

ent p

rope

rtie

s sh

ould

acc

ount

for t

hem

as

long

term

inve

stm

ents

. Lo

ng-t

erm

inve

stm

ents

are

va

lued

at c

ost l

ess

dim

inut

ion

in v

alue

w

here

ver t

he d

eclin

e is

ot

her t

han

a te

mpo

rary

de

clin

e.

A

n in

vest

men

t pro

pert

y sh

all b

e m

easu

red

initi

ally

at

its c

ost.

Tran

sact

ion

cost

s sh

all b

e in

clud

ed in

the

initi

al

mea

sure

men

t.

For s

ubse

quen

t m

easu

rem

ent a

n en

tity

shal

l mea

sure

all o

f its

in

vest

men

t pro

pert

ies

in

acco

rdan

ce w

ith c

ost m

odel

as

per

Ind

AS 16

exc

ept f

or

inve

stm

ent p

rope

rtie

s th

at

mee

t the

crit

eria

to b

e cl

assi

fied

as h

eld

for s

ale,

w

hich

sha

ll be

mea

sure

d at

in

the

oper

atio

ns o

f, th

e in

vest

ing

ente

rpris

e.

und

er a

fina

nce

leas

e) to

ea

rn re

ntal

s or

for

capi

tal

appr

ecia

tion

or b

oth,

rath

er

than

for:

i)

use

in th

e pr

oduc

tion

or

su

pply

of g

oods

or

se

rvic

es o

r for

adm

inis

trat

ive

purp

oses

;

or

ii) s

ale

in th

e or

dina

ry c

ours

e

of b

usin

ess.

| The New Axis of Financial Reporting � Ind AS and ICDS 53 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

Biol

ogic

al a

sset

sIn

d AS

41

Mea

sure

men

t

No

guid

ance

ava

ilabl

e un

der

AS.

A

bio

logi

cal a

sset

sho

uld

be

mea

sure

d on

initi

al

reco

gniti

on a

nd a

t eac

h ba

lanc

e sh

eet d

ate

at it

s fa

ir va

lue

less

est

imat

ed c

osts

to

sel

l.

th

e lo

wer

of i

ts c

arry

ing

amou

nt a

nd fa

ir va

lue

less

co

sts

to s

ell.

Firs

t tim

e ad

optio

nIn

d AS

101

Scop

e �

Ap

plic

abili

ty

AS

does

not

pro

vide

gu

idan

ce o

n fir

st ti

me

adop

tion

of th

e st

anda

rds

by a

n en

tity.

In

d AS

101 s

peci

fical

ly d

eals

w

ith h

ow to

app

ly In

d AS

s fo

r the

firs

t tim

e.

Sub

ject

to re

quire

men

t set

ou

t in

the

Stan

dard

, ful

l re

tros

pect

ive

appl

icat

ion

of

Ind

ASs

effe

ctiv

e at

the

repo

rtin

g da

te fo

r an

entit

y�s

first

Ind

AS fi

nanc

ial

stat

emen

ts is

requ

ired.

The

st

anda

rds

also

pro

vide

for

cert

ain

optio

nal e

xem

ptio

ns

and

man

dato

ry

exce

ptio

ns.

A

n en

tity

shal

l exp

lain

how

th

e tr

ansi

tion

from

pre

viou

s G

AA

P to

Ind

ASs

affe

cted

its

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 54RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

Busi

ness

co

mbi

natio

nIn

d AS

103

Scop

e

AS

does

not

pro

vide

gu

idan

ce fo

r all t

ype

of

busi

ness

com

bina

tions

. AS

14 d

eals

with

acc

ount

ing

for

amal

gam

atio

ns.

In

d AS

app

lies

to a

tr

ansa

ctio

n or

oth

er e

vent

th

at m

eets

the

defin

ition

of

a bu

sine

ss c

ombi

natio

n.

re

port

ed b

alan

ce s

heet

, fin

anci

al p

erfo

rman

ce a

nd

cash

flow

.

Busi

ness

co

mbi

natio

nIn

d AS

103

Met

hod

of

acco

untin

g

AS

prov

ides

two

met

hods

of

acco

untin

g fo

r am

alga

mat

ions

. Poo

ling

of

inte

rest

met

hods

in c

ase

of

amal

gam

atio

n in

nat

ure

of

mer

ger a

nd in

oth

er c

ases

pu

rcha

se m

etho

d.

In

d AS

pro

vide

s bu

sine

ss

com

bina

tions

invo

lvin

g en

titie

s or

bus

ines

ses

unde

r co

mm

on c

ontr

ol s

hall b

e ac

coun

ted

for u

sing

the

pool

ing

of in

tere

st m

etho

d.

All o

ther

bus

ines

s co

mbi

natio

ns a

re a

ccou

nted

us

ing

purc

hase

met

hod.

Busi

ness

co

mbi

natio

nIn

d AS

103

Met

hod

of

acco

untin

g

Goo

dwill

aris

ing

on

amal

gam

atio

n re

pres

ents

a

paym

ent m

ade

in

antic

ipat

ion

of fu

ture

in

com

e an

d it

is a

ppro

pria

te

to tr

eat i

t as

an a

sset

to b

e am

ortis

ed to

inco

me

on a

sy

stem

atic

bas

is o

ver i

ts

usef

ul lif

e no

t exc

eedi

ng 5

ye

ars.

A

s pe

r Ind

AS

good

will

is n

ot

amor

tised

, but

is te

sted

for

impa

irmen

t ann

ually

or

mor

e fr

eque

ntly

if e

vent

or

circ

umst

ance

indi

cate

im

pairm

ent.

| The New Axis of Financial Reporting � Ind AS and ICDS 55 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

Busi

ness

co

mbi

natio

nIn

d AS

103

Reco

gniti

on a

nd

mea

sure

men

t

AS

does

not

pro

vide

any

sp

ecifi

c gu

idan

ce.

A

cqui

sitio

n-re

late

d co

sts

are

cost

s th

e ac

quire

r inc

urs

to e

ffec

t a b

usin

ess

com

bina

tion.

Tho

se c

osts

in

clud

e fin

der�s

fees

; ad

viso

ry, le

gal, a

ccou

ntin

g,

valu

atio

n an

d ot

her

prof

essi

onal

or c

onsu

lting

fe

es; g

ener

al a

dmin

istr

ativ

e co

sts,

incl

udin

g th

e co

sts

of

mai

ntai

ning

an

inte

rnal

ac

quis

ition

s de

part

men

t; an

d co

sts

of re

gist

erin

g an

d is

suin

g de

bt a

nd e

quity

se

curit

ies.

The

acq

uire

r sha

ll ac

coun

t for

ac

quis

ition

-rel

ated

cos

ts a

s ex

pens

es in

the

perio

ds in

w

hich

the

cost

s ar

e in

curr

ed

and

the

serv

ices

are

re

ceiv

ed, w

ith o

ne

exce

ptio

n. T

he c

osts

to

issu

e de

bt o

r equ

ity

secu

ritie

s sh

all b

e re

cogn

ised

in a

ccor

danc

e w

ith In

d AS

32

and

Ind

AS

109.

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 56RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

Busi

ness

co

mbi

natio

nIn

d AS

103,

In

d AS

38

Valu

atio

n

If a

n in

tang

ible

ass

et is

ac

quire

d in

an

amal

gam

atio

n in

the

natu

re o

f pur

chas

e,

the

sam

e sh

ould

be

acco

unte

d at

cos

t or f

air

valu

e if

the

cost

/fai

r val

ue

can

be re

liabl

y m

easu

red.

If

the

sam

e is

not

relia

bly

mea

sura

ble

it is

incl

uded

as

a pa

rt o

f goo

dwill.

Inta

ngib

le

asse

ts a

cqui

red

in a

n am

alga

mat

ion

in th

e na

ture

of

mer

ger,

or a

cqui

sitio

n of

a

su

bsid

iary

is re

cord

ed

at b

ook

valu

es.

In

acc

orda

nce

with

Ind

AS

103

Busi

ness

Com

bina

tions

, if

an in

tang

ible

ass

et is

ac

quire

d in

a b

usin

ess

com

bina

tion,

the

cost

of

that

inta

ngib

le a

sset

is it

s fa

ir va

lue

at th

e ac

quis

ition

da

te.

In

tang

ible

ass

et a

cqui

red

in

an a

mal

gam

atio

n in

the

natu

re o

f pur

chas

e is

re

cord

ed e

ven

if th

at

inta

ngib

le a

sset

had

not

be

en re

cogn

ised

in th

e fin

anci

al s

tate

men

ts o

f the

tr

ansf

eror

how

ever

, in c

ase

of a

mal

gam

atio

n in

the

natu

re o

f mer

ger i

f the

in

tang

ible

ass

et w

as n

ot

reco

gnis

ed b

y th

e ac

quire

e,

T

he in

tang

ible

is re

cord

ed b

y th

e ac

quire

r irr

espe

ctiv

e of

w

heth

er th

e as

set h

ad b

een

reco

gnis

ed b

y th

e ac

quire

e be

fore

the

busi

ness

co

mbi

natio

n.

| The New Axis of Financial Reporting � Ind AS and ICDS 57 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

th

e ac

quire

r wou

ld n

ot b

e ab

le to

reco

rd th

e sa

me.

Fina

ncia

l in

stru

men

ts -

di

sclo

sure

s

Ind

AS 10

7D

iscl

osur

es

AS

does

not

requ

ire s

imila

r di

sclo

sure

. Dis

clos

ure

requ

irem

ents

spe

cifie

d in

th

e Ac

t are

nee

d to

be

mad

e in

the

finan

cial

sta

tem

ents

.

In

d AS

man

date

di

sclo

sure

s by

cla

ss o

f fin

anci

al in

stru

men

t, of

fset

ting

of fi

nanc

ial

asse

ts a

nd fi

nanc

ial

liabi

litie

s, a

naly

sis

of th

e ga

in o

r los

s re

cogn

ised

re

latin

g to

fina

ncia

l ass

ets

carr

ied

at a

mor

tised

cos

t, its

risk

man

agem

ent

stra

tegy

, cer

tain

qua

litat

ive

and

quan

titat

ive

info

rmat

ion.

Ope

ratin

g Re

port

ing

Ind

AS 10

8Sc

ope

A

S 17

is n

ot a

pplic

able

to

SMCs

.

Ind

AS 10

8 is

app

licab

le to

co

mpa

nies

to w

hich

Ind

AS

notif

ied

unde

r the

Co

mpa

nies

Act

app

ly.

Segm

ent

Repo

rtin

g �

Ch

ange

in

acco

untin

g po

licie

s

Ind

AS 10

8Pr

esen

tatio

n an

d di

sclo

sure

C

hang

es in

acc

ount

ing

polic

ies

adop

ted

for

segm

ent r

epor

ting

that

ha

ve a

mat

eria

l eff

ect o

n se

gmen

t inf

orm

atio

n sh

ould

be

dis

clos

ed. S

uch

disc

losu

re s

houl

d in

clud

e a

If

an

entit

y ch

ange

s th

e st

ruct

ure

of it

s in

tern

al

orga

nisa

tion

in a

man

ner

that

cau

ses

the

com

posi

tion

of it

s re

port

able

seg

men

ts to

ch

ange

, the

cor

resp

ondi

ng

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 58RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

des

crip

tion

of th

e

natu

re o

f th

e ch

ange

, and

the

finan

cial

ef

fect

of t

he c

hang

e if

it is

re

ason

ably

det

erm

inab

le.

No

rest

atem

ent r

equi

red

for

prio

r per

iod

figur

es.

in

form

atio

n fo

r ear

lier

perio

ds, in

clud

ing

inte

rim

perio

ds, s

hall b

e re

stat

ed

unle

ss th

e in

form

atio

n is

not

av

aila

ble

and

the

cost

to

deve

lop

it w

ould

be

ex

cess

ive.

A

S do

es n

ot p

rovi

de a

ny

guid

ance

.

Two

or m

ore

oper

atin

g se

gmen

ts m

ay b

e ag

greg

ated

into

a s

ingl

e op

erat

ing

segm

ent i

f ag

greg

atio

n is

con

sist

ent

with

the

core

prin

cipl

e of

th

is In

d AS

.

Fina

ncia

l in

stru

men

tsIn

d AS

109

Gen

eral

A

S do

es n

ot p

rovi

de

guid

ance

on

the

subj

ect.

A

S 13

dea

l with

acc

ount

ing

for i

nves

tmen

ts in

the

finan

cial

sta

tem

ents

of

ente

rpris

es a

nd re

late

d di

sclo

sure

requ

irem

ents

.

In

d AS

est

ablis

hes

prin

cipl

es

for t

he fi

nanc

ial r

epor

ting

of

finan

cial

ass

ets

and

finan

cial

lia

bilit

ies

that

will

pres

ent

rele

vant

and

use

ful

info

rmat

ion

to u

sers

of

finan

cial

sta

tem

ents

for

thei

r ass

essm

ent o

f the

am

ount

s, ti

min

g an

d un

cert

aint

y of

an

entit

y�s

futu

re c

ash

flow

s.

| The New Axis of Financial Reporting � Ind AS and ICDS 59 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

Fina

ncia

l in

stru

men

tsIn

d AS

109

Reco

gniti

on a

nd

mea

sure

men

t

AS

inve

stm

ent a

re in

itial

ly

reco

rded

at c

ost.

Subs

eque

ntly

cur

rent

in

vest

men

t are

car

ried

at

low

er o

f cos

t and

fair

valu

e an

d lo

ng te

rm in

vest

men

ts

are

carr

ied

at c

ost l

ess

prov

isio

n fo

r dim

inut

ion

in

valu

e w

hich

is o

ther

than

te

mpo

rary

.

A

n en

tity

shal

l rec

ogni

se a

fin

anci

al a

sset

or a

fina

ncia

l lia

bilit

y in

its

bala

nce

shee

t w

hen,

and

onl

y w

hen,

the

entit

y be

com

es p

arty

to th

e co

ntra

ctua

l pro

visi

ons

of

the

inst

rum

ent.

Fi

nanc

ial in

stru

men

t are

in

itial

ly m

easu

red

at fa

ir va

lue.

Cons

olid

ated

Fi

nanc

ial

Stat

emen

ts

Ind

AS 11

0Sc

ope

A

S do

es n

ot m

anda

te

prep

arat

ion

of c

onso

lidat

ed

finan

cial

sta

tem

ents

. H

owev

er if

an

entit

y pr

epar

es c

onso

lidat

ed

finan

cial

sta

tem

ents

it

need

s to

com

ply

with

AS

21.

U

nder

Ind

AS, a

n en

tity

need

s to

pre

pare

co

nsol

idat

ed fi

nanc

ial

stat

emen

ts u

nles

s it

mee

ts

the

exem

ptio

n cr

iteria

.

Ind

AS 11

0 re

quire

s an

ent

ity

(the

par

ent)

that

con

trol

s on

e or

mor

e ot

her e

ntiti

es

(sub

sidi

arie

s) to

pre

sent

co

nsol

idat

ed fi

nanc

ial

stat

emen

ts u

nles

s it

mee

ts

the

exem

ptio

n cr

iteria

pr

escr

ibed

und

er th

e In

d AS

.

Cons

olid

ated

Fi

nanc

ial

Stat

emen

ts

Ind

AS 11

0Pr

inci

ple

U

nder

AS

it is

pos

sibl

e th

at

an e

ntity

has

mor

e th

an o

ne

pare

nt w

hich

wou

ld

U

nder

Ind

AS, a

n en

tity

can

have

onl

y on

e pa

rent

, whi

ch

wou

ld c

onso

lidat

e th

e en

tity

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 60RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

co

nsol

idat

e th

e en

tity

in

thei

r res

pect

ive

cons

olid

ated

fina

ncia

l st

atem

ents

.

in

its

cons

olid

ated

fina

ncia

l st

atem

ents

.

Cons

olid

ated

Fi

nanc

ial

Stat

emen

ts -

M

inor

ity in

tere

st In

d AS

110

Pres

enta

tion

and

Dis

clos

ure

M

inor

ity in

tere

sts

are

pres

ente

d se

para

tely

from

lia

bilit

ies

and

equi

ty.

N

on-c

ontr

ollin

g in

tere

sts

in

the

cons

olid

ated

bal

ance

sh

eet a

re p

rese

nted

as

a co

mpo

nent

of e

quity

, se

para

tely

from

the

equi

ty

of th

e ow

ners

of t

he p

aren

t.

A

mou

nt a

ttrib

utab

le to

m

inor

ity in

tere

st a

re

pres

ente

d as

a d

educ

tion

from

net

inco

me

or lo

ss in

st

atem

ent o

f pro

fit a

nd lo

ss.

T

he p

ortio

n of

inco

me

stat

emen

t att

ribut

able

to

non-

cont

rollin

g in

tere

st a

nd

to th

e pa

rent

is s

epar

atel

y di

sclo

sed

on th

e fa

ce o

f the

in

com

e st

atem

ent a

s al

loca

tions

of i

ncom

e st

atem

ent f

or th

e pe

riod.

Cons

olid

ated

Fi

nanc

ial

Stat

emen

ts�

Lo

ss o

f su

bsid

iary

Ind

AS 11

0Re

cogn

ition

T

he lo

sses

exc

eedi

ng th

e m

inor

ity in

tere

st in

the

equi

ty o

f the

sub

sidi

ary

have

to b

e ad

just

ed a

gain

st

the

maj

ority

inte

rest

, ex

cept

to th

e ex

tent

that

th

e m

inor

ity h

as a

bin

ding

ob

ligat

ion

to, a

nd a

re a

ble

to

In

d AS

110,

loss

es in

curr

ed

by th

e su

bsid

iary

hav

e to

be

allo

cate

d be

twee

n th

e pa

rent

and

non

-con

trol

ling

inte

rest

s, e

ven

if th

is

resu

lts in

def

icit

bala

nce

of

non-

cont

rollin

g in

tere

st.

| The New Axis of Financial Reporting � Ind AS and ICDS 61 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

m

ake

good

the

loss

es. If

the

subs

idia

ry s

ubse

quen

tly

repo

rts

prof

its, a

ll suc

h pr

ofits

are

allo

cate

d to

the

maj

ority

inte

rest

unt

il the

m

inor

ity�s

sha

re o

f los

ses

prev

ious

ly a

bsor

bed

by th

e m

ajor

ity h

as b

een

reco

vere

d.

Cons

olid

ated

Fi

nanc

ial

Stat

emen

ts-

Repo

rtin

g pe

riod

Ind

AS 11

0, 2

8Sc

ope

In

d AS

requ

irem

ents

are

si

mila

r to

AS. H

owev

er,

unde

r Ind

AS

diff

eren

ce

betw

een

the

repo

rtin

g da

te

of th

e su

bsid

iary

/ jo

intly

co

ntro

lled

entit

y/

asso

ciat

es m

ade

for

sign

ifica

nt tr

ansa

ctio

n an

d ev

ents

to th

ose

finan

cial

st

atem

ents

of s

ubsi

diar

ies/

as

soci

ates

/ JV

dra

wn

up to

di

ffer

ent r

epor

ting

date

to

the

date

of t

he p

aren

t�s

finan

cial

sta

tem

ents

. In a

ny

case

, the

diff

eren

ce

betw

een

repo

rtin

g da

tes

shou

ld n

ot b

e m

ore

than

6

mon

ths.

Fur

ther

, the

leng

th

In

d AS

requ

irem

ents

are

si

mila

r to

AS. H

owev

er,

unde

r Ind

AS

diff

eren

ce

betw

een

the

repo

rtin

g da

te

of th

e su

bsid

iary

/ jo

intly

co

ntro

lled

entit

y/

asso

ciat

es w

hich

is

cons

olid

ated

and

that

of t

he

pare

nt s

hall n

ot b

e m

ore

than

3 m

onth

s.

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 62RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

of

the

repo

rtin

g pe

riods

and

an

y di

ffer

ence

in th

e re

port

ing

date

s sh

ould

be

the

sam

e fr

om p

erio

d to

pe

riod.

It

may

als

o be

not

ed th

at, in

ca

se o

f ass

ocia

tes,

AS

does

no

t spe

cific

ally

lay

dow

n co

nditi

on th

at th

e di

ffer

ence

in

repo

rtin

g da

tes

shou

ld n

ot

exce

ed 6

mon

ths.

Cons

olid

ated

Fi

nanc

ial

Stat

emen

ts -

U

nifo

rm

acco

untin

g po

licie

s

Ind

AS 11

0, 2

8M

easu

rem

ent a

nd

disc

losu

re

Con

solid

ated

Fin

anci

al

Stat

emen

ts (C

FS) s

houl

d be

pr

epar

ed u

sing

uni

form

ac

coun

ting

polic

ies

for l

ike

tran

sact

ions

and

oth

er

even

ts in

sim

ilar

circ

umst

ance

s.

C

ompl

ianc

e w

ith u

nifo

rm

acco

untin

g po

licie

s is

m

anda

tory

, unl

ess

in c

ase

of

asso

ciat

es it

is

impr

actic

able

to d

o so

.

If

it is

not

pra

ctic

able

to u

se

unifo

rm a

ccou

ntin

g po

licie

s in

pre

parin

g th

e CF

S, th

at

fact

sho

uld

be d

iscl

osed

to

geth

er w

ith th

e pr

opor

tions

of t

he it

ems

in

the

CFS

to w

hich

the

diff

eren

t acc

ount

ing

polic

ies

If

a m

embe

r of t

he g

roup

us

es a

ccou

ntin

g po

licie

s ot

her t

han

thos

e ad

opte

d in

th

e co

nsol

idat

ed fi

nanc

ial

stat

emen

ts fo

r lik

e tr

ansa

ctio

ns a

nd e

vent

s in

si

mila

r circ

umst

ance

s,

appr

opria

te a

djus

tmen

ts a

re

| The New Axis of Financial Reporting � Ind AS and ICDS 63 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

ha

ve b

een

appl

ied.

Tho

ugh

unifo

rm a

ccou

ntin

g po

licie

s ar

e no

t man

dato

ry,

it is

impo

rtan

t to

note

that

th

ose

polic

ies,

nev

erth

eles

s,

have

to b

e in

com

plia

nce

with

AS.

Join

t ve

ntur

eIn

d AS

111

Mea

sure

men

t &

reco

gniti

on

In s

epar

ate

finan

cial

st

atem

ents

of a

ven

ture

, in

tere

st in

join

tly c

ontr

olle

d en

titie

s sh

ould

be

acco

unte

d as

per

AS 13

�A

ccou

ntin

g fo

r In

vest

men

t�.

In

sep

arat

e fin

anci

al

stat

emen

t of t

he p

aren

t en

tity

inve

stm

ent i

n jo

int

vent

ure

shal

l acc

ount

for

inve

stm

ents

at c

ost o

r in

acco

rdan

ce w

ith In

d AS

109.

m

ade

to th

at g

roup

m

embe

r�s fi

nanc

ial

stat

emen

ts in

pre

parin

g th

e co

nsol

idat

ed fi

nanc

ial

stat

emen

ts to

ens

ure

conf

orm

ity w

ith th

e gr

oup�

s ac

coun

ting

polic

ies.

In

con

solid

ated

fina

ncia

l st

atem

ents

, a v

entu

re

repo

rts

its in

tere

st in

join

tly

cont

rolle

d en

tity

usin

g pr

opor

tiona

te c

onso

lidat

ion

met

hod

unle

ss it

mee

t the

ex

cept

ion

crite

ria, in

whi

ch

case

it s

hall a

ccou

nt

inve

stm

ent i

n ac

cord

ance

w

ith A

S 13

Acc

ount

ing

for

Inve

stm

ents

.

In

con

solid

ated

fina

ncia

l st

atem

ents

a v

entu

rer s

hall

acco

unts

for t

he in

vest

men

t in

join

t ven

ture

usi

ng th

e eq

uity

met

hod,

unl

ess

the

entit

y is

exe

mpt

from

ap

plyi

ng e

quity

met

hod

in

acco

rdan

ce w

ith th

e In

d AS

.

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 64RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

Fair

valu

e m

easu

rem

ent

Ind

AS 11

3Sc

ope,

app

licat

ion

and

disc

losu

res

A

S do

es n

ot p

rovi

de a

ny

spec

ific

guid

ance

.

Ind

AS 11

3 ap

plie

s w

hen

anot

her I

nd A

S re

quire

s or

pe

rmits

fair

valu

e m

easu

rem

ents

or

disc

losu

res

abou

t fai

r val

ue

mea

sure

men

ts (a

nd

mea

sure

men

ts, s

uch

as fa

ir va

lue

less

cos

ts to

sel

l, ba

sed

on fa

ir va

lue

or

disc

losu

res

ab

out

thos

e m

easu

rem

ents

), ex

cept

as

spec

ified

in th

e In

d AS

.

Fair

valu

e is

the

pric

e th

at

wou

ld b

e re

ceiv

ed to

sel

l an

asse

t or p

aid

to tr

ansf

er a

lia

bilit

y in

an

orde

rly

tran

sact

ion

betw

een

mar

ket p

artic

ipan

ts a

t the

m

easu

rem

ent d

ate.

To

incr

ease

con

sist

ency

and

co

mpa

rabi

lity

in fa

ir va

lue

mea

sure

men

ts a

nd re

late

d di

sclo

sure

s, th

is In

d AS

es

tabl

ishe

s a

fair

valu

e hi

erar

chy

that

cat

egor

ises

in

to th

ree

leve

ls.

| The New Axis of Financial Reporting � Ind AS and ICDS 65 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

The

fair

valu

e hi

erar

chy

give

s th

e h

ighe

st p

riorit

y to

qu

oted

pric

es in

ac

tive

mar

ket f

or id

entic

al a

sset

s or

liabi

litie

s (le

vel 1

inpu

ts)

and

low

est p

riorit

y to

un

obse

rvab

le in

puts

(lev

el 3

in

puts

).

Ind

AS p

resc

ribes

var

ious

di

sclo

sure

on

the

basi

s of

fa

ir va

lue

mea

sure

men

t and

cl

assi

ficat

ion

as p

er fa

ir va

lue

hier

arch

y.Re

venu

e fr

om

cont

ract

s w

ith

cust

omer

Ind

AS 11

5Sc

ope

A

S 9

deal

s w

ith re

cogn

ition

of

reve

nue

aris

ing

in th

e co

urse

of t

he o

rdin

ary

activ

ities

of t

he e

nter

pris

e fr

om:

1.

sale

of g

oods

2.

ren

derin

g of

ser

vice

s

3. i

nter

est,

roya

lties

and

divi

dend

s

In

d AS

115

appl

y to

all

cont

ract

s w

ith c

usto

mer

s,

exce

pt le

ase,

insu

ranc

e,

finan

cial

inst

rum

ents

, bar

ter

tran

sact

ion

betw

een

entit

ies

in s

ame

line

of

busi

ness

to fa

cilit

ate

sale

s to

cus

tom

ers

or p

oten

tial

cust

omer

s.

AS

7 de

als

with

acc

ount

ing

trea

tmen

t of r

even

ue a

nd

cost

s as

soci

ated

with

co

nstr

uctio

n c

ontr

acts

.

A

con

trac

t is

an a

gree

men

t be

twee

n tw

o or

mor

e pa

rtie

s th

at c

reat

es

enfo

rcea

ble

right

s an

d ob

ligat

ions

.

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 66RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

Reve

nue

from

co

ntra

cts

with

cu

stom

er

Ind

AS 11

5Re

cogn

ition

R

even

ue re

cogn

ition

is

mai

nly

conc

erne

d w

ith th

e tim

ing

of re

cogn

ition

of

reve

nue

in th

e st

atem

ent o

f pr

ofit

and

loss

of a

n en

terp

rise.

R

even

ue is

reco

gnis

ed

whe

n th

e se

ller h

as

tran

sfer

red

to th

e bu

yer

prop

erty

in g

oods

or a

ll si

gnifi

cant

risk

s an

d re

war

ds

of o

wne

rshi

p an

d re

tain

s no

ef

fect

ive

cont

rol o

f the

go

ods

asso

ciat

ed w

ith

owne

rshi

p; a

nd n

o si

gnifi

cant

unc

erta

inty

ex

ists

rega

rdin

g th

e co

nsid

erat

ion.

R

even

ue fr

om s

ervi

ce

tran

sact

ions

as

per A

S 9

is

usua

lly re

cogn

ised

as

the

serv

ice

is p

erfo

rmed

, eith

er

by th

e pr

opor

tiona

te

com

plet

ion m

etho

d or

by

the

com

plet

ed s

ervi

ce

cont

ract

met

hod.

In

d AS

lay

dow

n 5

step

pr

oces

s fo

r rec

ogni

tion

of

reve

nue:

�

Ste

p 1 -

Iden

tify

the

co

ntra

ct w

ith a

cus

tom

er

� S

tep

2 �

Iden

tify

the

pe

rfor

man

ce o

blig

atio

ns

in

the

cont

ract

�

Ste

p 3

�

D

eter

min

e th

e tr

ansa

ctio

n

pric

e

� S

tep

4 �

Allo

cate

the

tr

ansa

ctio

n pr

ice

to th

e

perf

orm

ance

obl

igat

ion

in

th

e co

ntra

ct

� S

tep

5 �

reco

gniz

e th

e re

venu

e

whe

n (o

r as)

the

entit

y

satis

fies

a pe

rfor

man

ce

ob

ligat

ion.

A

n en

tity

shal

l rec

ogni

se

reve

nue

whe

n (o

r as)

the

entit

y sa

tisfie

s a

perf

orm

ance

obl

igat

ion

by

tran

sfer

ring

a pr

omis

ed g

ood

or s

ervi

ce to

| The New Axis of Financial Reporting � Ind AS and ICDS 67 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

a

cust

omer

. The

tran

sfer

ta

kes

plac

e w

hen

cust

omer

ob

tain

s co

ntro

l of t

hat

asse

t.

Whe

n a

cont

ract

doe

s no

t m

eet t

he c

riter

ia s

peci

fied

in th

e In

d AS

, and

co

nsid

erat

ion

is re

ceiv

ed

from

cus

tom

er, t

he e

ntity

sh

all r

ecog

nise

d co

nsid

erat

ion

rece

ived

as

reve

nue

whe

n ei

ther

of t

he

follo

win

g ev

ent h

as

occu

rred

:

1. Th

e en

tity

has

no

re

mai

ning

obl

igat

ion

and

al

l or s

ubst

antia

lly a

ll, of

the

con

side

ratio

n

has

been

rece

ived

and

is

no

n-re

fund

able

; or

2.

The

con

trac

t has

bee

n

term

inat

ed a

nd th

e

cons

ider

atio

n re

ceiv

ed

fr

om th

e cu

stom

er is

non-

refu

ndab

le.

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 68RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

Reve

nue

from

co

ntra

cts

with

cu

stom

er

Ind

AS 11

5Re

cogn

ition

�

unila

tera

l rig

ht

The

re is

no

spec

ific

guid

ance

av

aila

ble

unde

r AS.

U

nder

Ind

AS, a

con

trac

t do

es n

ot e

xist

if e

ach

part

y to

the

cont

ract

has

the

unila

tera

l enf

orce

able

righ

t to

term

inat

e a

who

lly

unpe

rfor

med

con

trac

t w

ithou

t com

pens

atin

g th

e ot

her p

arty

(or p

artie

s).

C

onsi

dera

tion

rece

ived

w

ould

be

acco

unte

d as

re

venu

e ba

sed

usin

g cr

iteria

sp

ecifi

ed in

Ind

AS.

Reve

nue

from

co

ntra

cts

with

cu

stom

er

Ind

AS 11

5Re

cogn

ition

�

cont

ract

co

mbi

natio

n/m

odifi

catio

n

A

S 9

is s

ilent

on

the

mat

ter.

How

ever

, AS

7 pr

ovid

es

guid

ance

on

com

bini

ng a

nd

segm

entin

g co

nstr

uctio

n co

ntra

cts.

C

ontr

act c

ombi

natio

n ha

ppen

s w

hen

entit

y ne

eds

to a

ccou

nt fo

r tw

o or

mor

e co

ntra

ct a

s fo

r 1 c

ontr

act

and

not s

epar

atel

y as

per

In

d AS

.

A c

ontr

act m

odifi

catio

n is

a

chan

ge in

the

scop

e or

pric

e (o

r bot

h) o

f a c

ontr

act t

hat

is a

ppro

ved

by th

e pa

rtie

s to

th

e co

ntra

ct. In

d A

s re

quire

s co

ntra

ct m

odifi

catio

n to

be

acco

unte

d as

sep

arat

e co

ntra

ct if

follo

win

g tw

o

| The New Axis of Financial Reporting � Ind AS and ICDS 69 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

co

nditi

ons

are

satis

fied:

1. S

cope

of c

ontr

act

in

crea

ses

due

to a

dditi

on

of

goo

ds o

r ser

vice

s th

at

ar

e di

stin

ct; a

nd

2. In

crea

se in

con

side

ratio

n

refle

cts

that

sta

nd-a

lone

sellin

g pr

ices

of a

dditi

onal

good

s or

ser

vice

s.

Reve

nue

from

co

ntra

cts

with

cu

stom

er

Ind

AS 11

5Re

cogn

ition

-

Mul

tiple

ele

men

t ar

rang

emen

ts

Th

ere

is n

o sp

ecifi

c gu

idan

ce

avai

labl

e un

der A

S.

Ind

AS 11

5 re

quire

s id

entif

icat

ion

of e

ach

perf

orm

ance

obl

igat

ion

sepa

rate

ly.

T

he re

cogn

ition

crit

eria

ca

nnot

be

appl

ied

to tw

o or

m

ore

oblig

atio

n to

geth

er if

fo

llow

ing

two

crite

ria a

re

met

:

1. G

oods

or s

ervi

ce is

capa

ble

of b

eing

dis

tinct

;

and

2.

The

pro

mis

e to

tran

sfer

the

good

or s

ervi

ce

is

sep

arat

ely

iden

tifia

ble

fr

om o

ther

pro

mis

es

in

the

cont

ract

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 70RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

T

he tr

ansa

ctio

n pr

ice

is

allo

cate

d to

eac

h pe

rfor

man

ce o

blig

atio

n on

th

e ba

sis

of th

eir r

elat

ive

stan

d-al

one

sellin

g pr

ice,

su

bjec

t to

Ind

AS c

riter

ia fo

r al

loca

tion

of d

isco

unts

and

va

riabl

e co

nsid

erat

ion.

Reve

nue

from

co

ntra

cts

with

cu

stom

er

Ind

AS 11

5M

easu

rem

ent �

tr

ansa

ctio

n pr

ice

A

S re

quire

s th

at re

venu

e is

m

easu

rabl

e an

d th

at a

t the

tim

e of

sal

e or

the

rend

erin

g of

the

serv

ice

it w

ould

not

be

unr

easo

nabl

e to

exp

ect

ultim

ate

colle

ctio

n. W

here

th

e ul

timat

e co

llect

ion

cann

ot b

e re

ason

ably

as

cert

aine

d, re

venu

e re

cogn

ition

is p

ostp

oned

.

T

he tr

ansa

ctio

n pr

ice

is th

e am

ount

of c

onsi

dera

tion

to

whi

ch a

n en

tity

expe

cts

to

be e

ntitl

ed in

exc

hang

e fo

r tr

ansf

errin

g pr

omis

ed g

oods

or

ser

vice

s to

a c

usto

mer

, ex

clud

ing

amou

nts

colle

cted

on

beh

alf o

f thi

rd p

artie

s (fo

r exa

mpl

e, s

ome

sale

s ta

xes)

.

The

con

side

ratio

n pr

omis

ed

in a

con

trac

t with

a

cust

omer

may

incl

ude

fixed

am

ount

s, v

aria

ble

amou

nts,

or

bot

h.

N

on-c

ash

cons

ider

atio

n is

m

easu

red

at fa

ir va

lue.

If fa

ir va

lue

cann

ot b

e re

ason

ably

| The New Axis of Financial Reporting � Ind AS and ICDS 71 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

Back to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

es

timat

ed th

e co

nsid

erat

ion

is m

easu

red

with

refe

renc

e to

sta

nd-a

lone

sel

ling

pric

e to

the

cust

omer

or c

lass

of

cust

omer

.

Reve

nue

from

co

ntra

cts

with

cu

stom

er

Ind

AS 11

5Re

cogn

ition

�

cont

ract

cos

t

AS

7, C

ontr

act c

osts

incl

ude

the

cost

s at

trib

utab

le to

a

cont

ract

for t

he p

erio

d fr

om

the

date

of s

ecur

ing

the

cont

ract

to th

e fi

nal

com

plet

ion

of th

e co

ntra

ct.

How

ever

, cos

ts t

hat r

elat

e di

rect

ly t

o a

cont

ract

and

w

hich

are

incu

rred

in

secu

ring

the

cont

ract

are

al

so in

clud

ed a

s pa

rt o

f the

co

ntra

ct c

osts

if th

ey c

an b

e se

para

tely

iden

tifie

d an

d m

easu

red

relia

bly

and

it is

pr

obab

le th

at th

e co

ntra

ct

will

be o

btai

ned.

A

n en

tity

shal

l rec

ogni

se a

s an

ass

et th

e in

crem

enta

l co

sts

of o

btai

ning

a c

ontr

act

with

a c

usto

mer

if th

e en

tity

expe

cts

to r

ecov

er th

ose

cost

s. T

he in

crem

enta

l co

sts

of o

btai

ning

a

cont

ract

are

thos

e co

sts

that

an

entit

y in

curs

to

obta

in a

con

trac

t with

a

cust

omer

that

it w

ould

not

ha

ve in

curr

ed if

the

cont

ract

ha

d no

t bee

n ob

tain

ed (f

or

exam

ple,

a s

ales

co

mm

issi

on).

W

hen

cost

s in

curr

ed in

se

curin

g a

cont

ract

are

re

cogn

ised

as

an e

xpen

se in

th

e pe

riod

in w

hich

they

are

in

curr

ed, t

hey

are

not

C

osts

to o

btai

n a

cont

ract

th

at w

ould

hav

e be

en

incu

rred

rega

rdle

ss o

f w

heth

er th

e co

ntra

ct w

as

obta

ined

sha

ll be

reco

gnis

ed

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 72RSMBack to Content

Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

as

an

expe

nse

whe

n in

curr

ed, u

nles

s th

ose

cost

s ar

e ex

plic

itly

char

geab

le to

th

e cu

stom

er re

gard

less

of

whe

ther

the

cont

ract

is

obta

ined

.

in

clud

ed in

con

trac

t cos

ts

whe

n th

e co

ntra

ct is

ob

tain

ed in

a s

ubse

quen

t pe

riod.

Reve

nue

from

co

ntra

cts

with

cu

stom

er

Ind

AS 11

5Re

cogn

ition

and

m

easu

rem

ent �

se

rvic

e co

nces

sion

ar

rang

emen

ts

N

o sp

ecifi

c gu

idan

ce u

nder

AS

.

Ind

AS p

rovi

des

deta

iled

guid

ance

on

reco

gniti

on a

nd

clas

sific

atio

n

depe

ndin

g on

the

term

s of

th

e ar

rang

emen

ts. T

he

arra

ngem

ent i

s ac

coun

ted

as fi

nanc

ial a

sset

or a

n in

tang

ible

ass

et.

If

the

arra

ngem

ent g

ives

co

ntra

ctua

l rig

ht to

rece

ive

cash

or a

noth

er fi

nanc

ial

asse

t, th

e co

ntra

ctor

(e

ntity

) sha

ll rec

ogni

ze a

fin

anci

al a

sset

.

If th

e ar

rang

emen

ts g

ives

rig

ht (l

icen

ce) t

o ch

arge

us

ers

of th

e pu

blic

ser

vice

, th

e co

ntra

ctor

(ent

ity) s

hall

reco

gniz

e an

inta

ngib

le

asse

t.

| The New Axis of Financial Reporting � Ind AS and ICDS 73 RSM

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

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Requ

irem

ents

as

per

AS

Cate

gory

Topi

cIn

d AS

Requ

irem

ents

as

per

Ind

AS

W

here

the

retu

rns

are

part

ly

in fo

rm o

f fin

anci

al a

sset

s an

d pa

rtly

inta

ngib

le, e

ach

com

pone

nt is

acc

ount

ed

sepa

rate

ly.

Chapter 3 Ind AS Vs. IFRS Vs. Indian GAAP (AS)

|The New Axis of Financial Reporting � Ind AS and ICDS 74RSMBack to Content

4.0 IND AS VS. ICDS � KEY DIFFERENCES

Back to Content

4.1 Brief Background of ICDS

Section 145(1) of the Income-tax Act, 1961 (�the IT Act�) provides that the income chargeable under the heads 'Profits and gains of business or profession' or 'Income from other sources' be computed in accordance with either cash or mercantile system of accounting regularly employed by the assessee. Section 145(2) of the IT Act provides that the Central Government may notify Income Computation and Disclosure Standards (ICDS) for any class of assessees or for any class of income.

1 On this background, the Central Government notified 10 ICDS vide

Notification No. 32 of 2015 dated 31st March, 2015.

4.2 Comparison of ICDS and Ind AS

Chapter 4 Ind AS Vs. ICDS � Key Differences

ICDS Ind AS

To minimise alternatives, reduce litigation and provide certainty while computing income under the IT Act

To converge with global reporting standards in an integrated global markets

Objective

FY 2015-16 FY 2016-17 with comparative figures for FY 2015-16

Applicable

from

All persons following mercantile system of accounting

Specified companies

ApplicableTo

Computation of Income under �Business and Profession� and �Other Sources� and not for the purpose of maintenance of books of accounts

Preparation and Presentation of financial statements

Applicable

For

1. Certain provisions of ICDS may be further clarified by the CBDT as the expert committee is at present examining the issues based on the suggestion by the stakeholders - Press release dated 26 November 2015.

|The New Axis of Financial Reporting � IND AS and ICDS 76RSMBack to Content

Chapter 4 Ind AS Vs. ICDS � Key Differences

ICDS Ind AS

No. Particulars

4.3 A comparative list of ICDS Vs. corresponding Ind AS is as under:

No. Particulars

I

IIIIIIV

VVI

VII

VIII

IXX

Disclosure of Accounting Policies

Valuation of InventoriesConstruction ContractRevenue Recognition

Tangible Fixed AssetsThe effects of changes in foreign exchange ratesGovernment Grants

Securities

Borrowing CostsProvisions, Contingent Liabilities and Contingent Assets

1

8

21151151091621

20

109

2337

Presentation of Financial StatementsAccounting Policies, Changes in Accounting Estimates and ErrorsInventoriesRevenue from ContractsRevenue from ContractsFinancial InstrumentsProperty, Plant and EquipmentThe Effects of Changes in Foreign Exchange RatesAccounting for Government Grants and Disclosure of Government AssistanceFinancial instruments(Ind AS 32 and Ind AS 107 forpresentation and disclosure )Borrowing CostsProvisions, Contingent Liabilities and Contingent Assets

4.4 Key differences � ICDS Vs. Ind AS

As per ICDSAres ofDifferences

As per Ind AS

Scope Deals with disclosure of accounting policies only.

Deals with presentation of financial statements and is much wider in scope.

ICDS I Vs. Ind AS 1 / Ind AS 8

Deviation Deviation from ICDS-I allowed only if

Deviation from requirement of an Ind AS allowed if

| The New Axis of Financial Reporting � IND AS and ICDS 77 RSMBack to Content

Chapter 4 Ind AS Vs. ICDS � Key Differences

|The New Axis of Financial Reporting � IND AS and ICDS 78RSM

As per ICDSAres ofDifferences

As per Ind AS

True and fair Accounting policies adopted by a person shall be such so as to represent a true and fair view of the state of affairs and income of the business, profession or vocation. Deviation from ICDS not allowed if deviation would help showing a true and fair view. Concept of 'true and fair' is there but not the concept of 'true and fair override'.

Deviation subject to certain criteria. This is known as 'true and fair override'. Concepts of both 'true and fair' and of 'true and fair override' are there.

requirements of ICDS-I would conflict with the Act.

management concludes that compliance would make financial statements misleading and if the relevant regulatory framework requires, or otherwise does not prohibit, such a departure.

Materiality Concept of Materiality absent. An entity shall present separately each material class of similar items. An entity shall present separately items of a dissimilar nature or function unless they are immaterial except when required by law.

Change in accounting policy

An accounting policy shall not be changed without any reasonable cause.

Change in accounting policy should be made only if it is required by Ind AS or if such change will result in financial statements providing reliable and more relevant information.

Assessment of appropriateness of Going

No guidance on how assessment of appropriateness of GCA is to be

In assessing whether the going concern assumption is appropriate, management

Back to Content

Chapter 4 Ind AS Vs. ICDS � Key Differences

| The New Axis of Financial Reporting � IND AS and ICDS 79 RSM

As per ICDSAres ofDifferences

As per Ind AS

done. takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. The degree of consideration depends on the facts in each case. When an entity has a history of profitable operations and ready access to financial resources, the entity may reach a conclusion that the going concern basis of accounting is appropriate without detailed analysis. In other cases, management may need to consider a wide range of factors relating to current and expected profitability, debt repayment schedules and potential sources of replacement financing before it can satisfy itself that the going concern basis is appropriate. [Para 26 of Ind AS 1]

Disclosures required if GCA is not followed

If a fundamental accounting assumption is not followed, the fact shall be disclosed.

When an entity does not prepare financial statements on a going concern basis, it shall disclose that fact, together with the basis on which it prepared the financial statements and the reason why the entity is not regarded as a going concern.

Costs of Cost of inventories shall The cost of inventories shall

Concern Assumption (�GCA�)

ICDS II Vs. Ind AS 2

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Chapter 4 Ind AS Vs. ICDS � Key Differences

|The New Axis of Financial Reporting � IND AS and ICDS 80RSM

As per ICDSAres ofDifferences

As per Ind AS

comprise of all costs of purchase, costs of services, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The costs of purchase shall consist of purchase price including duties and taxes, freight inwards and other expenditure directly attributable to the acquisition. Trade discounts, rebate and other similar items shall be deducted.

comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The costs of purchase shall consist of purchase price including duties and taxes (other than those subsequently recoverable by the enterprise from the taxing authorities), freight in- wards and other expenditure directly attributable to the acquisition.

Reversal of write-down of inventories when NRV increases

Silent Reversal of write down shall be reduced from the amount of inventories recognised as an expense in the period in which the reversal occurs when such NRV increases.

Purchase

Inventory of service providers

The costs of services in the case of a service provider shall consist of labour and other costs of personnel directly engaged in providing the service including supervisory personnel and attributable overheads.

Inventory of service providers is measured at cost of production. These will generally include labour and other cost of personnel directly engaged in providing the services, including supervisory personnel and attributable overhead. It has been expressly provided that Labour and other costs relating to sales and general administrative personnel, profit margins or non-attributable overheads,

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Chapter 4 Ind AS Vs. ICDS � Key Differences

| The New Axis of Financial Reporting � IND AS and ICDS 81 RSM

As per ICDSAres ofDifferences

As per Ind AS

are not to be included.

Techniques for the Measurement of Cost

Where it is impracticable to use the costing methods (i.e. FIFO / WAV) retail method can be used in the retail trade for measuring inventories of large number of rapidly changing items that have similar margins. Standard cost method is not permitted.

Techniques for the measurement of the cost of inventories, such as the standard cost method or the retail method, may be used for convenience if the results approximate cost. Standard costs take into account normal levels of materials and supplies, labour, efficiency and capacity utilisation. They are regularly reviewed and, if necessary, revised in the light of current conditions.

The same cost formula for all inventories having a similar nature and use to the entity.

No such stipulation. An entity shall use the same cost formula for all inventories having a similar nature and use to the entity. For inventories with a different nature or use, different cost formulas may be justified. E.g. inventories used in one operating segment may have a use to the entity different from the same type of inventories used in another operating segment. However, a difference in geographical location of inventories (or in the respective tax rules), by itself, is not sufficient to justify the use of different cost formulas.

Valuation of inventory on dissolution of a

In case of dissolution of a partnership firm or association of person or body of

No such stipulation.

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Chapter 4 Ind AS Vs. ICDS � Key Differences

|The New Axis of Financial Reporting � IND AS and ICDS 82RSM

As per ICDSAres ofDifferences

As per Ind AS

partnership firm or association of person or body of individuals

individuals, notwithstanding whether business is discontinued or not, the inventory on the date of dissolution shall be valued at the net realisable value.

Value of opening inventory

The value of the inventory as on the beginning of the previous year shall be :(i) the cost of inventory available, if any, on the day of the commencement of the business when the business has commenced during the previous year; and(ii) the value of the inventory as on the close of the immediately preceding previous year, in any other case.

No such stipulation.

ICDS III Vs. Ind AS 115Scope This ICDS shall be applied in

determination of income for a construction contract of a contractor.

Ind AS 115 is single comprehensive standard to be applied for recognition of revenue from all contracts with customer.

Retention Money

This ICDS provides that contract revenue including retention money shall be recognized on basis of percentage of completion method.

As per Ind AS 115, consideration promised in a contract with customer shall include fixed amount, variable amount or both.It further provides that consideration promised in a contract can vary if an entity�s entitlement to the consideration is contingent on

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Chapter 4 Ind AS Vs. ICDS � Key Differences

| The New Axis of Financial Reporting � IND AS and ICDS 83 RSM

As per ICDSAres ofDifferences

As per Ind AS

Cost incurred for securing a contract included as part of contract cost

if (a) they can be separately identified; and (b) it is probable that the contract shall be obtained.

An entity shall recognise the incremental costs of obtaining a contract as an asset if the entity expects to recover those costs.Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained shall be recognised as an expense when incurred, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained.

the occurrence or non-occurrence of a future event. In such a case, the same shall be estimated as per the prescribed methods.

Criteria for recognition of variations in contract work, claims and incentive payments

Variations in contract work, claims and incentive payments shall be recognised(i) to the extent that it is probable that they will result in revenue; and(ii) they are capable of being reliably measured.

Detailed recognition criteria specified in Ind AS 115.

Recognition of contract costs and contract revenues with reference to stage of completion of

Contract revenue and contract costs associated with the construction contract should be recognised as revenue and expenses respectively by reference to the stage of completion of the contract

Ind AS 115 lay down 5 step process for recognition of revenue:Step 1 - Identify the contract with a customerStep 2 � Identify the performance obligations in the

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Chapter 4 Ind AS Vs. ICDS � Key Differences

|The New Axis of Financial Reporting � IND AS and ICDS 84RSM

As per ICDSAres ofDifferences

As per Ind AS

the contract activity at the reporting date (percentage of completion method)

activity at the reporting date. During early stages of a contract, where the outcome of the contract cannot be estimated reliably contract revenue is recognized only to the extent of cost incurred. The early stages of contract shall not extend beyond 25% of the stage of completion.

contractStep 3 � Determine the transaction priceStep 4 � Allocate the transaction price to the performance obligation in the contractStep 5 � recognize the revenue when (or as) the entity satisfies a performance obligation.It further provides that in some circumstances (for example, in the early stages of a contract), an entity may not be able to reasonably measure the outcome of a performance obligation, but the entity expects to recover the costs incurred in satisfying the performance obligation. In those circumstances, the entity shall recognise revenue only to the extent of the costs incurred until such time that it can reasonably measure the outcome of the performance obligation.

Expected losses on the contract

ICDS III does not provide any specific guidance.

After contract inception, the transaction price can change for various reasons, including the resolution of uncertain events or other changes in circumstances that change the amount of consideration to which an entity expects to be

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ICDS IV Vs. Ind AS 115 / Ind AS 109

Chapter 4 Ind AS Vs. ICDS � Key Differences

| The New Axis of Financial Reporting � IND AS and ICDS 85 RSM

As per ICDSAres ofDifferences

As per Ind AS

entitled in exchange for the promised goods or services.Amounts allocated to a satisfied performance obligation shall be recognised as a reduction of revenue, in the period in which the transaction price changes.

Time value concept in measurement of contract revenue

No such stipulation. Ind AS 115 requires transaction price to be adjusted for the effect of the time value of money in case of significant financing component. Ind AS also provides factors that would indicate existence of financing component. However, it also provide that an entity need not adjust the consideration if period is one year or less.

Definition of 'revenue'

'Revenue' is the gross inflow of cash, receivables or other consideration arising in the course of the ordinary activities of a person from the sale of goods, from the rendering of services, or from the use by others of the person's resources yielding interest, royalties or dividends.

Ind AS 115 defines revenue as income arising in the course of an entity�s ordinary activities. Income is defined as Increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in an increase in equity, other than those relating to contributions from equity participants.

Effects of Uncertainties on

Postponement of revenue due to uncertainty is restricted to

As per Ind AS 115, the consideration promised in a

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Chapter 4 Ind AS Vs. ICDS � Key Differences

|The New Axis of Financial Reporting � IND AS and ICDS 86RSM

As per ICDSAres ofDifferences

As per Ind AS

Revenue Recognition

claims for price escalation and export incentives.

contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration shall be included in transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

Revenue from rendering of services when outcome cannot be estimated reliably

The requirements of ICDS III shall mutatis mutandis apply to the recognition of revenue and the associated expenses for a service transaction. As such, the recognition of revenue cannot be postponed beyond 25% of stage of completion.

Ind AS 115 provides that in some circumstances (E.g. in the early stages of a contract), an entity may not be able to reasonably measure the outcome of a performance obligation, but the entity expects to recover the costs incurred in satisfying the performance obligation. In those circumstances, the entity shall recognise revenue only to the extent of the costs incurred until such time that it can reasonably measure the outcome of the performance obligation.

Taxes collected from buyer/client whether includible in revenue?

ICDS-IV silent in this regard. However, section 145A(1)(a) of the IT Act requires that taxes collected from buyer on sale of goods shall be included in the valuation of sale of goods.

Revenue (transaction price) is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer,

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Chapter 4 Ind AS Vs. ICDS � Key Differences

| The New Axis of Financial Reporting � IND AS and ICDS 87 RSM

As per ICDSAres ofDifferences

As per Ind AS

Section 145A(1)(a) does not apply to amounts received from rendering of services.

excluding amounts collected on behalf of third parties (E.g. some sales taxes).

Barter Transactions

ICDS-IV silent in this regard. Ind AS 115 provides that the transaction price for contracts in which a customer promises consideration in a form other than cash, an entity shall measure the non-cash consideration (or promise of non-cash consideration) at fair value.

Dividend income Dividends are recognised in accordance with the provisions of the IT Act.

Dividends are recognised in profit and loss only when:i) right to receive payment is establishedii) it is probable that economic benefit associated with the dividend will flow to the entity; and iii) the amount of dividend can be measured reliably. (Ind AS 109)

Recognition of revenue from interest

Interest shall accrue on the time basis determined by the amount outstanding and the rate applicable.

Interest shall be recognised by effective interest rate method. (Ind AS 109)

ICDS V Vs. Ind AS 16Criteria for initial recognition

As per ICDS-V, any item which meets the definition of a tangible fixed asset should be classified as a fixed asset.

Ind AS 16, in addition to defining the fixed assets, lays down the following criteria for recognition of items of property, plant and equipment: (i) It is probable that future economic benefits

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Chapter 4 Ind AS Vs. ICDS � Key Differences

|The New Axis of Financial Reporting � IND AS and ICDS 88RSM

As per ICDSAres ofDifferences

As per Ind AS

associated with the item will flow to the entity, and (ii) The cost of the item can be measured reliably.

Criteria for recognition of subsequent expenditure

Subsequent expenditures are capitalised only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.

Same as criteria for initial recognition as above.

Major spare parts � Capitalisation

Only those spares are required to be capitalised which can be used only in connection with a fixed asset and whose use is expected to be irregular.

Major spare parts qualify as property, plant and equipment when an entity expects to use them during more than one period and when they can be used only in connection with an item of property, plant and equipment.

Cost of major inspections

Does not deal with this aspect.

Requires that the cost of major inspections should be capitalised if the recognition criteria are satisfied with consequent de-recognition of any remaining carrying amount of the cost of the previous inspection.

Costs of dismantling and removing the item of property, plant & equipment and restoring the site.

Does not contain any such requirement.

Requires that the initial estimate of the said costs be included in the cost of the respective item of the cost of plant and equipment.

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ICDS VI Vs. Ind AS 21

Chapter 4 Ind AS Vs. ICDS � Key Differences

| The New Axis of Financial Reporting � IND AS and ICDS 89 RSM

As per ICDSAres ofDifferences

As per Ind AS

Forward exchange contracts and options

It covers the same. Excludes from its scope forward exchange contracts and other similar financial instruments, which are treated in accordance with Ind AS-39.

Definition of foreign operation

Foreign operation of a person is a branch, by whatever name called, of that person, the activities of which are based or conducted in a country other than India.

Foreign operation is an entity that is a subsidiary, associate, joint arrangement or branch of a reporting entity, the activities of which are based or conducted in a country or currency other than those of the reporting entity.

Non-monetary items at year end

ICDS VI requires all non-monetary items in a foreign currency shall be converted into reporting currency by using the exchange rate at the date of the transaction.

ICDS VI requires all non-monetary items in a foreign currency shall be converted into reporting currency by using the exchange rate at the date of the transaction. In respect of non-monetary items,

Non-monetary items that are measured at fair value in a foreign currency shall be translated using the exchange rates at the date when the fair value was measured.

In respect of non-monetary items, exchange differences arising on conversion thereof at the last day of the previous year shall not be recognised as income or as expense in that previous year.

Exchange differences arising on certain long

No option is allowed, i.e. to be recognised to profit and loss immediately.

Option is provided to recognize the same to equity directly and systematically recognise it to profit and loss account over the life of that monetary item. Option is to be exercised once

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ICDS VII Vs. Ind AS 20

Chapter 4 Ind AS Vs. ICDS � Key Differences

|The New Axis of Financial Reporting � IND AS and ICDS 90RSM

As per ICDSAres ofDifferences

As per Ind AS

and is irrevocable and to be applied to all such items.

Recognition of Government grants

Government grants should not be recognised until there is reasonable assurance that (i) the person shall comply with the conditions attached to them, and (ii) the grants shall be received. Recognition of Government grant shall not be postponed beyond the date of actual receipt.

Government grants, including non-monetary grants at fair value, shall not be recognised until there is reasonable assurance that: (a) the entity will comply with the conditions attaching to them; and(b) the grants will be received Mere receipt of a grant is not necessarily conclusive evidence that the conditions attached to the grant have been or will be fulfilled.

Grants relating to assets

Grants relating to depreciable asset are deducted from the actual cost of the assets or assets concerned or from the written down value of block of assets to which the concerned asset or assets belong to.No stipulation regarding grant for non-depreciable asset.

Government grants related to assets, including non-monetary grants at fair value, shall be presented in the balance sheet by setting up the grant as deferred income.

Government Assistance which does not fall within the definition of Government grants

Does not deal with such Government assistance.

Government assistance is action by government designed to provide an economic benefit specific to an entity or range of entities qualifying under certain criteria.

Loan at concessional

Silent Such loan shall be recognized as per Ind-AS 39.

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Chapter 4 Ind AS Vs. ICDS � Key Differences

| The New Axis of Financial Reporting � IND AS and ICDS 91 RSM

ICDS VIII Vs. Ind AS 109

As per ICDSAres ofDifferences

As per Ind AS

The value of concession shall be difference between the proceeds received and the initial carrying value (determined as per Ind-AS 39) shall be treated as grant as per this standard.

Scope Deals with securities held as stock in trade.

Much wider in scope and applies to all types of financial instruments (exceptions specified).

rates of interest

Valuation of Non-Monetary grants given at a concessional rate

It requires that non-monetary assets, given at a concessional rate, should be accounted for on the basis of their acquisition cost.

It requires to value non-monetary grants at their fair value.

Initial measurement of securities

A security on acquisition shall be recognised at actual cost. The actual cost of a security shall comprise of its purchase price and include acquisition charges such as brokerage, fees, tax duty or cess.

At initial recognition, an entity shall measure a financial asset (except trade receivable) or financial liability at its fair value plus or minus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.

Subsequent measurement of securities

Securities held as stock in trade shall be valued at actual cost initially recognised or net realizable value at the end of previous year, whichever is lower.

An entity shall subsequently measure a financial asset at amortised cost, fair value through other comprehensive income or fair value through profit or loss on the basis of:

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Chapter 4 Ind AS Vs. ICDS � Key Differences

|The New Axis of Financial Reporting � IND AS and ICDS 92RSM

ICDS IX Vs. Ind AS 23

As per ICDSAres ofDifferences

As per Ind AS

a. the entity�s business model for managing the financial assets and b. the contractual cash flow characteristics of the financial asset.

Qualifying asset measured at fair value

Applicable to all qualifying assets.

Does not apply to borrowing costs directly attributable to qualifying asset measured at fair value, E.g. a biological asset.

Applicability to Inventories

Applicable to borrowing costs related to all inventories that require substantial period of time to bring them in saleable condition.

Excludes the application of this Standard to borrowing costs directly attributable to inventories that are manufactured, or otherwise produced, in large quantities on a repetitive basis.

Securities not listed on a recognised stock exchange, or listed but not quoted on a recognized stock exchange with regularity from time to time, shall be valued at actual cost initially recognised.

Definition of 'Borrowing costs'

'Borrowing costs' are interest and other costs incurred by a person in connection with the borrowing of funds and include: (i) commitment charges on borrowings; (ii) amortised amount of discounts or premiums relating to borrowings; (iii) amortised amount of ancillary costs incurred in connection with the arrangement of borrowings; (iv) finance charges in respect of assets acquired under finance leases or under other

'Borrowing costs' are interest and other costs incurred by an enterprise in connection with the borrowing of funds. Borrowing costs may include: (a) interest and commitment charges on bank borrowings and other short-term and long-term borrowings; (b) amortisation of discounts or premiums relating to borrowings; (c) amortisation of ancillary costs incurred in connection with the arrangement of borrowings;

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Chapter 4 Ind AS Vs. ICDS � Key Differences

| The New Axis of Financial Reporting � IND AS and ICDS 93 RSM

As per ICDSAres ofDifferences

As per Ind AS

(d) finance charges in respect of assets acquired under finance leases or under other similar arrangements; and (e) exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

Definition of qualifying asset

'Qualifying asset' means: (i) land, building, machinery, plant or furniture, being tangible assets; (ii) know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets; (iii) Inventories that require a period of twelve months or more to bring them to a saleable condition.

A qualifying asset is an asset that necessarily takes a substantial period of time to getready for its intended use or sale.

similar arrangements.

Commence of capitalisation

Capitalisation of borrowing costs shall commence: (a) in a case funds are borrowed specifically, from the date on which funds were borrowed; (b) in a case funds are borrowed generally and utilised, from the date on which funds were utilised.

Capitalisation of borrowing costs shall commence when all the following conditions are satisfied: (a) expenditure for the acquisition, construction or production of a qualifying asset is being incurred; (b) borrowing costs are being incurred; and (c) activities that are necessary to prepare the asset

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ICDS X Vs. Ind AS 37

Chapter 4 Ind AS Vs. ICDS � Key Differences

|The New Axis of Financial Reporting � IND AS and ICDS 94RSM

As per ICDSAres ofDifferences

As per Ind AS

for its intended use or sale are in progress.

Cessation of capitalisation

Capitalisation of borrowing costs shall cease: (a) in case of assets, when such asset is first put to use; (b) in case of inventory, when substantially all the activities necessary to prepare such inventory for its intended sale are complete.

Capitalisation of borrowing costs should cease when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.

Suspension of Capitalisation

ICDS IX does not provide any guidance on the matter.

Capitalisation of borrowing costs should be suspended during extended periods in which active development is interrupted.

Recognition of provision

It is reasonably certain that an outflow of resources embodying economic benefits will be required to settle the obligation.

An outflow of resources embodying economic benefit required to settle an obligation should be probable.

Recognition of contingent assets

When it becomes reasonably certain that inflow of economic benefit will arise, the asset and related income are recognized. The amount recognised as asset and related income shall be the best estimate of the value of economic benefit arising at the end of the previous year. The amount and related income shall not be discounted to its present value.

Contingent assets are not recognised in financial statements since this may result in the recognition of income that may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate.

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Chapter 4 Ind AS Vs. ICDS � Key Differences

| The New Axis of Financial Reporting � IND AS and ICDS 95 RSM

As per ICDSAres ofDifferences

As per Ind AS

Reimbursement Reimbursement shall be recognised when it is reasonably certain that reimbursement will be received if the person settles the obligation.

Reimbursement of expense by another party shall be recognised when, and only when, it is virtually certain that reimbursement will be received if the enterprise settles the obligation.

Restructuring Expenses and onerous contracts

This ICDS does not have provisions relating to restructuring costs and onerous contracts.

It provides for treatment of restructuring expenses and onerous contracts.

If it is no longer reasonably certain that an inflow of economic benefits will arise, the asset and related income shall be reversed.

Discounting the amounts of provisions

Prohibits discounting the amounts of provisions.

Requires discounting the amounts of provisions, if effect of the time value of money is material.

Additional guidance

Gives guidance on (i) Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds and (ii) Liabilities arising from Participating in a Specific Market� Waste Electrical and Electronic Equipment.

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5.0 FIRST TIME ADOPTION OF INDIAN ACCOUNTING STANDARDS (IND AS 101)

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The objective of Ind AS 101 is to ensure that the entity�s first Ind AS financial statements and its interim financial report for the period covered by those statements, contain high quality information that:

is transparent for users and comparable for overall period presented

provides suitable starting point for accounting in accordance with Ind ASs; and

can be generated at a cost that does not exceed the benefit

5.1 Scope of Ind AS 101

Ind AS 101 is applicable to the entity�s first set Ind AS financial statements and each interim financial report, if any, that it presents in accordance with Ind AS 34, Interim Financial Reporting, for part of the period covered by its first Ind AS financial statements.

An entity�s �first Ind AS financial statements� is defined as the first annual financial statements in which the entity adopts Ind ASs and makes an explicit and unreserved statement in those financial statements of compliance with Ind ASs.

Ind AS 101 does not apply to changes in accounting policy made by an entity that already applies Ind ASs.

5.2 Certain Key Aspects

5.2.1 Opening Ind AS balance sheet and accounting policies

An entity shall prepare and present an opening Ind AS balance sheet at the date of transition to Ind AS. This is the starting point for its accounting in accordance with Ind AS.

An entity shall use the same accounting policies in its opening Ind AS

Chapter 5 First Time Adoption of Indian Accounting Standards (Ind AS 101)

| The New Axis of Financial Reporting � Ind AS and ICDS 97 RSMBack to Content

Chapter 5 First Time Adoption of Indian Accounting Standards (Ind AS 101)

balance sheet and throughout all periods presented in its first Ind AS financial statements. Those accounting policies shall comply with each Ind AS effective at the end of its first Ind AS reporting period, except for specified exemptions.

An entity shall not apply different versions of Ind ASs that were effective at earlier dates. An entity may apply a new Ind AS that is not yet mandatory if that Ind AS permits early application.

Except as provided in the standard, in its opening Ind AS balance sheet, an entity should:

� recognise all assets and liabilities whose recognition is required by Ind ASs

� not recognise items as assets or liabilities if Ind ASs does not permit such recognition

� reclassify assets, liabilities and items of equity as per the requirements of Ind ASs

� apply Ind ASs in measuring all recognised assets and liabilities

The accounting policies that an entity uses in its first Ind AS balance sheet may differ from those that it used for the same date using Indian GAAP. The resulting adjustments arise from events and transactions before the date of transition to Ind ASs. Therefore, an entity shall recognise those adjustments directly in retained earnings (or if appropriate another category of equity) at the date of transition to Ind ASs.

5.2.2 Exceptions to the principles that an entity�s opening Ind AS balance sheet shall fully comply with each Ind AS effective at the reporting date

Mandatory exceptions to the retrospective application of other Ind ASs

The New Axis of Financial Reporting � Ind AS and ICDS 98RSM |Back to Content

Chapter 5 First Time Adoption of Indian Accounting Standards (Ind AS 101)

Ind AS 101 prohibits retrospective application of Ind AS in some areas, particularly where retrospective application would require judgements by management about past conditions after the outcome of a particular transaction is already known. These exceptions relate to:

de-recognition of financial assets and financial liabilities

hedge accounting

non-controlling interest

classification and measurement of financial assets

impairment of financial assets

embedded derivatives

government loans

5.2.3 Exemptions from retrospective application of some aspects of other Ind AS

a) Estimates: An entity�s estimates in accordance with Ind AS at the date of transition shall be consistent with estimates made for the same date in accordance with previous GAAP, unless there is objective evidence that those estimates were in error. Any new information received after the date of transition to Ind ASs about the estimates shall be treated as non- adjusting events after the reporting period. The entity shall not reflect such new information in its opening Ind AS balance sheet and shall reflect such new information in profit or loss for the year.

b) New estimates required in accordance with Ind ASs at the date of transition that were not required under the previous GAAP shall reflect conditions that existed at the date of transition, E.g. Market prices, interest rates or foreign exchange rate shall reflect market conditions at that date.

The above requirements apply to the opening Ind AS balance sheet. They also

| The New Axis of Financial Reporting � Ind AS and ICDS 99 RSMBack to Content

Chapter 5 First Time Adoption of Indian Accounting Standards (Ind AS 101)

apply to a comparative period presented in an entity�s first Ind AS financial statements, in which case the references to the date of transition to Ind AS are replaced by references to the end of that comparative period.

5.2.4 Exemptions from the requirements of certain Ind ASs

Ind AS 101 grants certain optional exemptions from the general rule of full retrospective application of Ind AS. An entity may elect to use one or more of these exemptions. An entity shall not apply these exemptions by analogy to other items. These exemptions relate to:

share-based payment transactions

insurance contracts

deemed cost

leases

cumulative translation differences

investments in subsidiaries, joint ventures and associates

assets and liabilities of subsidiaries, associates and joint venture

compound financial instruments

designation of previously recognised financial instruments

fair value measurement of financial assets or financial liabilities at initial recognition

decommissioning liabilities included in the cost of property, plant and equipment

financial assets or intangible assets in respect of service concession arrangements accounted for in accordance with Ind AS 115

|The New Axis of Financial Reporting � Ind AS and ICDS 100RSMBack to Content

Chapter 5 First Time Adoption of Indian Accounting Standards (Ind AS 101)

borrowing costs

joint arrangements

non-current assets held for sale and discontinued operations

revenue from contracts with customers

5.2.5 Comparative information

An entity�s first Ind AS financial statements shall include at least

three balance sheets

two statements of profit and loss

two statements of cash flows

two statements of changes in equity and

related notes, including comparative information for all statements presented.

5.2.6 Explanation for transition to Ind AS

An entity shall explain how the transition from previous GAAP to Ind ASs affected its reported balance sheet, financial performance and cash flows.

An entity�s first Ind AS financial statements shall include:

� reconciliation of its equity reported in accordance with previous GAAP to its equity in accordance with Ind AS for both of the following dates:

the date of transition to Ind AS and

the end of the latest period presented in the entity�s most recent annual financial statements in accordance with

| The New Axis of Financial Reporting � Ind AS and ICDS 101 RSMBack to Content

Chapter 5 First Time Adoption of Indian Accounting Standards (Ind AS 101)

previous GAAP

� a reconciliation to its total comprehensive income in accordance with Ind AS for the latest period in the entity�s most recent annual financial statements. The starting point for such reconciliation shall be total comprehensive income in accordance with previous GAAP for the same period or, if an entity did not report such a total, profit or loss under pervious GAAP.

� if the entity has recognised or reversed any impairment losses for the first time in preparing its opening Ind AS balance sheet, the disclosures that Ind AS 36, 'Impairment of Assets', would have required if the entity had recognised those impairment losses or reversals in the period beginning with the date of transition to Ind AS.

� if the entity has presented a statement of cash flows under its previous GAAP, it shall also explain the material adjustments to the statement of cash flows.

5.2.7 Use of fair value as deemed cost

If an entity uses fair value in its opening Ind AS balance sheet as deemed cost for an item of property, plant and equipment (PPE), an investment property or an intangible asset, the entity�s first Ind AS financial statements shall disclose, for each line item in the opening Ind AS balance sheet:

a) the aggregate of those fair values; and

b) the aggregate adjustment to the carrying amounts reported under previous GAAP

5.2.8 Use of deemed cost for investments in subsidiaries, joint ventures and associates

If an entity uses deemed cost in its opening Ind AS balance sheet for an item of PPE, an investment property or an intangible asset, the entity�s first Ind AS financial statements shall disclose:

|The New Axis of Financial Reporting � Ind AS and ICDS 102RSMBack to Content

Chapter 5 First Time Adoption of Indian Accounting Standards (Ind AS 101)

a) the aggregate deemed cost of those investments for which deemed cost is their carrying amount as per previous GAAP ;

b) the aggregate deemed cost of those investments for which deemed cost is fair value; and

c) the aggregate adjustment to the carrying amounts reported under previous GAAP.

5.2.9 Derecognition of financial assets and financial liabilities

A first-time adopter shall apply the derecognition requirements in Ind AS 109 �Financial Instruments� prospectively for transactions occurring on or after the date of transition to Ind AS. In other words, if a first-time adopter has derecognised non-derivative financial assets or non-derivative financial liabilities under previous GAAP as a result of a transaction that occurred before the date of transition to Ind AS, it shall not recognise those assets and liabilities in accordance with Ind Ass (unless they qualify for recognition as a result of a later transaction or event).

An entity may apply the derecognition requirements in Ind AS 109 retrospectively from a date of the entity�s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions.

5.2.10 Hedge accounting

As required by Ind AS 109, at the date of transition to Ind AS, an entity shall:

a) measure all derivatives at fair value; and

b) eliminate all deferred losses and gains arising on derivatives that were reported in accordance with previous GAAP as if they were assets or liabilities.

| The New Axis of Financial Reporting � Ind AS and ICDS 103 RSMBack to Content

Chapter 5 First Time Adoption of Indian Accounting Standards (Ind AS 101)

An entity shall not reflect in its opening Ind AS balance sheet a hedging relationship of a type that does not qualify for hedge accounting in accordance with Ind AS 109 (E.g. many hedging relationships where the hedging instrument is a stand-alone written option or a net written option; or where the hedged item is a net position in a cash flow hedger for another risk than foreign currency risk).However, if an entity designated a net position as a hedged item under previous GAAP it may designate an individual item within that net position as a hedged item in accordance with Ind AS 109, provided that it does so no later than the date of transition to Ind AS.

If, before the date of transition to Ind AS, an entity had designated a transaction as a hedge but the hedge does not meet the conditions for hedge accounting in Ind AS 109 the entity shall apply requirements of Ind AS 109 to discontinue hedge accounting. Transactions entered into before the date of transition to Ind AS shall not be retrospectively designated as hedges.

5.2.11 Non-controlling interest

A first-time adopter shall apply the following requirements of Ind AS 110 prospectively from the date of transition to Ind AS:

(a) the requirement that total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance;

(b) the requirements for accounting for changes in the parent�s ownership interest in a subsidiary that do not result in a loss of control; and

(c) the requirements for accounting for a loss of control over a subsidiary, and the related requirements of Ind AS 105 �Non-current Assets Held for Sale and Discontinued Operations.�

However, if a first-time adopter elects to apply Ind AS 103 retrospectively to past business combinations, it shall also apply Ind AS 110 from the same date.

|The New Axis of Financial Reporting � Ind AS and ICDS 104RSMBack to Content

Chapter 5 First Time Adoption of Indian Accounting Standards (Ind AS 101)

5.2.12 Interim financial reports

If an entity presents an interim financial report in accordance with Ind AS 34 for part of the period covered by its first Ind AS financial statements, the entity shall include:

a) reconciliation of its equity in accordance with previous GAAP at the end of that comparable interim period to its equity under Ind AS at that date;

b) a reconciliation to its total comprehensive income in accordance with Ind AS for that comparable interim period (current and year to date). The starting point for that reconciliation shall be total comprehensive income in accordance with previous GAAP for that period or, if an entity did not report such a total, profit or loss in accordance with previous GAAP.

c) Reconciliations described in (a) above or a cross reference to another published documents that includes these reconciliations.

d) If during the period covered by its first Ind AS financial statements an entity changes its accounting policies or its use of the exemptions contained in the Ind AS 101, it shall explain the changes between its first Ind AS interim financial report and its first Ind AS financial statements and update the reconciliations disclosed as above.

If a first time adopter did not disclose information material to an understanding of the current interim period in its most recent annual financial statements in accordance with previous GAAP, its interim financial report shall disclose that information or include a cross-reference to another published document that includes it.

5.2.13 Presentation and disclosures

The first Ind AS financial statements shall be presented in accordance with the presentation and disclosure requirements of Ind AS 1.

Ind AS 101 does not provide exemptions from the presentation and

| The New Axis of Financial Reporting � Ind AS and ICDS 105 RSMBack to Content

Chapter 5 First Time Adoption of Indian Accounting Standards (Ind AS 101)

disclosure requirements in other Ind ASs.

If an entity becomes aware of errors made under previous GAAP, the reconciliations as disclosed above shall distinguish the correction of those errors from changes in accounting policies.

Ind AS 8 does not deal with changes in accounting policies that occur when an entity first adopts Ind AS. Therefore, Ind AS 8 requirements for disclosures about changes in accounting policies do not apply to the entity�s first Ind AS financial statements.

Where there is no change in its functional currency on the date of transition to Ind AS, an entity may elect to continue with carrying value for all of its PPE as at the date of transition as recognised under previous GAAP and use that as its deemed cost after making adjustment in respect of decommissioning liabilities, if any. If the entity adopts such exemption, the fact and the accounting policy shall be disclosed by the entity until such time that those items of PPE, investment properties or intangible assets, are significantly depreciated, impaired or derecognised in the balance sheet.

If an entity did not present financial statements for previous periods, its first Ind AS financial statements shall disclose such fact.

|The New Axis of Financial Reporting � Ind AS and ICDS 106RSMBack to Content

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6.1 From which date Ind AS will be applicable in India?

As per MCA notification, a company may voluntary apply Ind AS for accounting period commencing 1 April 2015 or thereafter. Select class of companies and its holding, subsidiary, joint venture or associate companies would need to mandatorily apply Ind AS for period commencing 1 April 2016.

6.2 Which entities in India need to comply with Ind AS with effect from 1 April 2016?

Indian companies meeting following criteria :

i) Companies whose equity or debt securities are listed or are in the process of listing on any stock exchange, whether in India or outside India and having net worth of Rs. 500 crores or more as at 31 March 2014 on the basis of standalone financial statements of the company;

ii) Other companies having net worth of Rs. 500 crores or more as at 31 March 2014 on the basis of standalone financial statements of the company;

iii) Holding, subsidiary, joint venture or associate companies of companies covered above.

6.3 If an unlisted company has net worth less than Rs. 250 crores as at 31 March 2014, can Ind AS become applicable to it in future?

As specified in the notification by MCA, Ind AS may become applicable to such companies if in subsequent period it meets the specified criteria for applicability of Ind AS.

6.4 What is the date of transition to Ind AS?

Date of transition is the beginning date of the earliest period for which the company presents full comparative information in its first Ind AS financial statements. E.g. for Ind AS financial statements to be prepared for year ending 31 March 2017 the date of transition would be 1 April 2015.

Chapter 6 Frequently Asked Questions (FAQs) by First Time Adopters of Ind AS

|The New Axis of Financial Reporting � Ind AS and ICDS 108RSMBack to Content

Chapter 6 Frequently Asked Questions (FAQs) by First Time Adopters of Ind AS

6.5 If the date of transition to Ind AS is 1 April 2015, what GAAP the Indian company needs to follow for the year 2015-2016?

The company would need to follow Accounting Standards as notified vide Companies (Accounting Standards) Rules, 2006. However, it would also need to prepare financial statements in compliance with Ind AS for FY 2015-2016 for presenting comparative previous year figures in its first Ind AS financial statements for the FY 2016-2017.

6.6 What are the components of a complete set of Ind AS financial statements?

As prescribed in Ind AS 1 'Presentation of financial statements' a complete set of financial statements comprises of:

a) a balance sheet as at the end of the period;

b) a statement of profit and loss for the period;

c) a statement of changes in equity for the period;

d) a statements of cash flows for the period ;

e) notes, comprising a summary of significant accounting policies, and other explanatory information;

f) comparative information in respect of the preceding period as specified; and

g) a balance sheet as at the beginning of the preceding period when an entity applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements or when it reclassifies items in its financial statements.

6.7 What would entity need to do in converting financial statements as per Indian GAAP to Ind AS financial statements?

In converting financial statements as per Indian GAAP to Ind AS financial statements, an entity needs to:

| The New Axis of Financial Reporting � Ind AS and ICDS 109 RSMBack to Content

recognise all assets and liabilities whose recognition is required by Ind AS

de-recognise items of assets or liabilities if Ind AS does not permit such recognition

reclassify assets, liabilities and items of equity as per the requirements of Ind AS

apply Ind AS measurement principles for all recognised assets and liabilities retrospectively (unless exemption is available under Ind AS)

6.8 Can any entity prepare Ind AS financial statements for period longer / shorter than one year? If yes, what are the disclosures required?

As per Ind AS 1 'Presentation of financial statements' an entity shall present a complete set of financial statements (including comparative information) at least annually. When an entity changes the end of its reporting period and presents financial statements for a period longer or shorter than one year, an entity shall disclose, in addition to the period covered by the financial statements:

a) the reason for using a longer or shorter period; and

b) the fact that amounts presented in the financial statements are not entirely comparable.

6.9 Which Ind AS would an entity need to comply with in its first Ind AS financial statements?

An entity would be required to apply all the Ind AS effective as at the end of the reporting period in:

preparing and presenting its opening Ind AS balance sheet; and

preparing and presenting its balance sheet for the year (including comparative previous year figures), statement of profit and loss, statement of changes in equity and cash flow statement for the periods then ended and disclosures (including comparative information)

Chapter 6 Frequently Asked Questions (FAQs) by First Time Adopters of Ind AS

|The New Axis of Financial Reporting � Ind AS and ICDS 110RSMBack to Content

If a new Ind AS is not mandatory as at the reporting date, but permits early application, an entity is permitted, but not required, to apply that Ind AS in its first Ind AS financial statements.

6.10 If an entity presents interim financial information for part of the period covered by its first Ind AS financial statements, what additional disclosures are required?

An entity shall give reconciliation of:

Equity under the Indian GAAP at the end of that comparable interim period to its equity under Ind AS at that date.

Profit and loss under the Indian GAAP for that comparable interim period (current and year to date) to its profit or loss under Ind AS for that period.

Ind AS 34 � the reconciliations demanded for annual reports or a cross reference to another published document that includes such reconciliation.

If the most recent annual financial statements under the Indian GAAP, disclosure information material to an understanding of the current interim period, the interim report should include such disclosure.

6.11 What is offsetting?

Offsetting means netting of assets and liabilities or income and expenses. An entity shall not offset assets and liabilities or income and expenses, unless required or permitted by Ind AS. E.g. Valuation allowances for obsolescence of inventory should be offset against inventory valuation because Ind AS 1 specifically states that this situation is not offsetting.

Chapter 6 Frequently Asked Questions (FAQs) by First Time Adopters of Ind AS

| The New Axis of Financial Reporting � Ind AS and ICDS 111 RSMBack to Content

|The New Axis of Financial Reporting � Ind AS and ICDS 112RSM

Notes

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Notes

|The New Axis of Financial Reporting � Ind AS and ICDS 114RSM

Notes

| The New Axis of Financial Reporting � Ind AS and ICDS 115 RSM

Notes

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For further information please contact:RSM Astute Consulting Pvt. Ltd.13th Floor, Bakhtawar, 229, Nariman Point, Mumbai - 400 021. T: (91-22) 6108 5555 / 6121 4444 F: (91-22) 6108 5556 / 2287 5771 E: emails@rsmindia.inW: www.rsmindia.in

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This publication is intended to provide the readers, a broad understanding of applicability of Ind AS and Income Computation and Disclosure Standards (ICDS), some key differences with IFRS and Accounting Standards (AS) presently applied by companies. Every effort has been made to ensure that the contents are accurate and current. Information in this publication is in no way intended to replace or supersede independent or other professional advice. This publication should not be relied upon for taking actions or decisions without appropriate professional advice and it may be noted that nothing contained in this publication should be regarded as our opinion and facts of each case will need to be analysed based on specific facts. While all reasonable care has been taken in preparation of this publication, we accept no responsibility for any liability arising from any statements or errors contained in this publication.

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