The ministry of corporate affairs (MCA) has drawn up a revised roadmap for companies for implementation of the Indian Accounting Standards (Ind AS) converged with the International Financial Reporting Standards (IFRS) for companies other than banking companies, insurance companies and NBFCs. The ministry announced its plans through a statement on Friday night.
The roadmap envisages a two-phase implementation. All companies, listed and unlisted, with a net worth over R500 crore together with their holding, subsidiary, joint venture or associate companies are covered in the first phase.
On the other hand, the second phase covers all the other listed companies or those in the process of listing and all other unlisted companies with a net worth over R250 crore, together with their holding, subsidiary, joint venture or associate companies. However, companies that are listed or are in the process of listing on SME exchanges are exempt.
While companies falling under the first category have to follow the new Ind AS norms from April 1, 2016, other companies would have to follow the accounting norms from the next financial year—with an option for all of them to apply the norms from April 1, 2015 voluntarily.
Consultancy firms such as KPMG and PricewaterhouseCoopers (PwC) welcomed the move which was awaited since its announcement during the budget session by corporate affairs minister Arun Jaitley. Sumit Seth, partner in PwC India, said, “The MCA’s long-awaited revised roadmap for adoption of the Indian Accounting Standards (Ind AS) converged with the International Financial Reporting Standards (FRS) is a welcome New Year gift.”
“This will not only elevate corporate financial reporting in India to that of other advanced economies, but more importantly reinforce to the global community India’s resolve towards strong corporate governance practices,” he added.
Commenting on the new regulations, Sai Venkateshwaran, the head of accounting advisory services in KPMG India, indicated that although “the revised roadmap applies to companies other than banking companies, insurance companies and NBFCs, it may become applicable indirectly to such as entities as well, if they are a subsidiary, joint-venture of associate company of an entity otherwise covered under the roadmap”.