NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES

SCHOOL OF BUSINESS MANAGEMENT

Individual Project
Financial Accounting and Management
Accounting, FTMBA, Trimester 1, 2021
To study the application of Indian Accounting Standards by 3 Indian companies

SUBMITTED BY:

DIVISION I, GROUP III

RISHABH MISHRA (I043)

6
IND AS 1 : Presentation of Financial Statements
This accounting standard dictates that the annual report has the Financial Statements like Balance Sheet,
Cash Flow Statements, Statement of changes in Equity and Income Statement. They must also follow the
Accrual Accounting Concept. The statements must be consistent in their disclosure.

Maruti Suzuki in its annual report has seen to have presented the general-purpose financial statements
including but not limited to Balance Sheet, Cash Flow Statements, Statement of changes in Equity and
Income Statement.

These statements follow the Accrual Accounting Concept.

Maruti Suzuki has been observed to make the necessary disclosures in the general-purpose financial
statements regarding any and all decisions that could affect the economic view of the company.

Infosys in its annual report has been observed to have prepared the general-purpose financial statements
including but not limited to Balance Sheet, Cash Flow Statements, Statement of changes in Equity and
Income Statement.

These statements follow the Accrual Accounting Concept in an acceptable way.

Infosys has been observed to make the necessary disclosures in the general-purpose financial statements
regarding any and all decisions that could affect the economic view of the company.

Interglobe Aviation in its annual report has been observed to have prepared the general-purpose financial
statements including but not limited to Balance Sheet, Cash Flow Statements, Statement of changes in
Equity and Income Statement.

These statements follow the Accrual Accounting Concept in an acceptable way.

Interglobe Aviation has been observed to make the necessary disclosures in the general-purpose financial
statements regarding any and all decisions that could affect the economic view of the company.
IND AS 2 : Inventories

This standard defines the protocol for dealing with the accounting process of inventories, their
costing, write them down as expenses and the net realizable value.

Maruti Suzuki has in it’s inventory Vehicles, their spare parts, loose tools and components. They
are in line with the IND AS 2 in valuing their inventory at a lower of cost which were determined
using the weighted average technique.

Since Infosys is Service firm providing software solutions, it does not hold any inventory to sell
and isn’t required to report inventory.

Indigo in it’s inventories contains spare tools, in-flight consumables and inventory. It was found
to be reporting inventory with agreement to Ind As-2.

IND AS 7 : Cash Flow Statements

IND AS-7 sets the standard for developing the consolidated cash flow statements. It suggests to
use the Indirect Method of making the cash flow statement.

Maruti Suzuki’s consolidated cash-flow statement has been observed to be in line with the Ind As-
7 and follows the ‘Indirect-Method’ as permitted.
Infosys’s consolidated cash-flow statement has been observed to be in line with the Ind As-7 and
follows the ‘Indirect-Method’ as permitted.

Interglobe Aviation’s consolidated cash-flow statement has been observed to be in line with the Ind As-7
and follows the ‘Indirect-Method’ as permitted.

IND AS 16 : Property, Plant and Equipment

IND AS-16 describes the accounting treatment for Property Plant and Equipment of a company so
that all the stakeholders can discern how the assets are allocated and how the composition of
allocation has changed.

The PPE under Maruti Suzuki’s control are leasehold and freehold land, buildings, offices, plants
and machinery. They are accounted at the cost of acquisition or construction less the accumulated
depreciation.

The depreciation is calculated using a straight line method keeping in mind the useful life of an
asset and it’s residue value at the end of it.
Infosys considers its leasehold and freehold land, buildings, offices and machines as it’s PPE.
Their accounting is done in line with the Ind-As 16 except the leased PPE, which is done in
accordance with the Ind-As 116.

The company uses a straight-line depreciation technique keeping the useful life and residual value
after the useful life in mind.

Interglobe Aviation’s PPE consists of aircrafts both leased and owned, spare engines, offices and
furniture. The company continues to account it’s PPE with the carrying value.

Apart from the engines and aircrafts, the depreciation is in line with the Schedule 2 of the
companies act of 2013. For the aircrafts and engines the depreciation is calculated using the
straight-line method.

IND AS 115 : Revenue from Contracts

This standard dictates the norms for specifying the accounting treatment for informing the
stakeholders and users of the financial statements, specially the cashflow statements about the
various aspects like amount, timing, certainty and nature of the cash flow resulting from a
contract with a customer.

The Compаny recognizes revenue when the revenue аmount аnd its relаted cost cаn be meаsured
аnd the compаny will receive future economic benefits.

Revenue on sаles of good is recognized on trаnsfer of control of sаid goods to the customer, while
revenue from royаlty is recognized on аn аccruаl bаsis bаsed on pre-existing аrrаngements.
Revenues from customer contrаcts is recognized when а written contrаct hаs been аpproved by аll
pаrties in the contrаct, the pаrties аre committed to perform their respective obligаtions under the
contrаct, аnd the contrаct is legаlly enforceаble.

For services thаt аre performed аs аn indefinite number of repetitive аcts over а specified period,
revenue is recognized rаteаbly on а strаight-line bаsis.

For other fixed-price contrаcts, the percentаge of completion method is used by the compаny.

Revenue is recognized upon trаnsfer of control of promised goods or services to customers.

Pаssenger revenue is recognized on flown bаsis аfter services аre rendered. Cаncellаtion chаrges of flight
tickets аre аlso recognized аs revenue for rendering of services.

Revenue from in-flight sаles is recognized on trаnsfer of goods to the pаssenger.