APPLICABILITY OF INDIAN ACCOUNTING STANDARD

Coming months will going to be much more busy than usual for all of us. Especially in some areas like applicability of ICDS, penalty levy on IT returns late filing and IndAS applicability in certain cases.

IndAS continuous implementation creating more challenging or difficulties for the companies in following annual compliance accurately especially the compliances related to Indian tax laws. As all of us know very well the purpose of presentation of financial statements as per IndAS is to disclose the transaction, especially some transactions which are related to the related parties transaction on the Arm’s Length basis for making comparable to industry standard of similar transactions.

There are some meaningful changes were happened in recognizing income and expenditures and their presentation under IndAS and IGAAP. As per IndAS all the liabilities have recognized on substance over form basis than the legal form and all the assets have recognized on fair value basis than the book value. Notwithstanding, IGAAP is telling us the principle which are related to general prudence and historical cost method rather than the fair market values.

More read:

• Key characteristics for Auto-population of e-invoice
• Overview of Invoice Furnishing Facility (IFF) Under QRMP Scheme

Financial statements preparation as per IndAS is mandatory for the following companies from the date of 1st April 2016:-

• Unlisted companies which having net worth of Rs. 500 Crores or above.
• Companies which are already listed having net worth of Rs. 500 Crores or above.
• Companies which are in the process of listing in any stock exchange in India or outside
• India having net worth of Rs. 500 Crores or above.
• Also mandatory for their subsidiaries, holding, associate and joint venture companies.

From the date of 1st April 2017, limits of net worth for applicability of IndAS are getting changed:-

• Unlisted companies which having net worth of Rs. 250 Crores or above.
• All the Listed companies.
• All the companies which are in process of listing in any stock exchange in India or outside India.
• Also mandatory for their subsidiaries, holding, associate and joint venture companies.

Once a company starts following the Ind AS mandatorily on the basis of criteria specified above, it will be required to follow the Ind AS for all the subsequent financial statements even if any of the criteria specified do not subsequently apply to it. Companies to which IndAS are applicable should prepare their first set of financial statements in accordance with the IndAS effective at the end of its first IndAS reporting period i.e. companies preparing financial statements applying the IndAS for the accounting period beginning on 1 April 2016 should apply the IndAS effective for the financial year ending as on 31 March 2017.

Applicability of Accounting Standards to Non-Company Entities

Chart showing Applicability of Accounting Standards to Non-Company Entities
Accounting Standard (AS)	Level II Entities	Level III Entities	Level IV Entities
AS 1	Applicable	Applicable	Applicable
AS 2	Applicable	Applicable	Applicable
AS 3	Not Applicable	Not Applicable	Not Applicable
AS 4	Applicable	Applicable	Applicable
AS 5	Applicable	Applicable	Applicable
AS 7	Applicable	Applicable	Applicable
AS 9	Applicable	Applicable	Applicable
AS 10	Applicable	Applicable with disclosures exemption	Applicable with disclosures exemption
AS 11	Applicable	Applicable with disclosures exemption	Applicable with disclosures exemption
AS 12	Applicable	Applicable	Applicable
AS 13	Applicable	Applicable	Applicable with disclosures exemption
AS 14	Applicable	Applicable	Not Applicable
AS 15	Applicable with exemptions	Applicable with exemptions	Applicable with exemptions
AS 16	Applicable	Applicable	Applicable
AS 17	Not Applicable	Not Applicable	Not Applicable
AS 18	Applicable	Not Applicable	Not Applicable
AS 19	Applicable with disclosures exemption	Applicable with disclosures exemption	Applicable with disclosures exemption
AS 20	Not Applicable	Not Applicable	Not Applicable
AS 21	Not Applicable	Not Applicable	Not Applicable
AS 22	Applicable	Applicable	Applicable only for current tax related provisions
AS 23	Not Applicable	Not Applicable	Not Applicable
AS 24	Applicable	Not Applicable	Not Applicable
AS 25	Not Applicable	Not Applicable	Not Applicable
AS 26	Applicable	Applicable	Applicable with disclosures exemption
AS 27	Not Applicable	Not Applicable	Not Applicable
AS 28	Applicable with disclosures exemption	Applicable with disclosures exemption	Not Applicable
AS 29	Applicable with disclosures exemption	Applicable with disclosures exemption	Applicable with disclosures exemption