Professional Documents
Culture Documents
Voluntary basis
For any company which chooses to adopt Ind AS for
accounting period commencing on or after 1 April 2015
with the comparatives for the period ending 31 March
2015.
2
MANDATORY
Criteria Time-line
(i) com p a n i e s w h o s e e q u i t y o r d e b t For accounting periods commencing on or after 1
securities are listed or are in the process of being April 2016 with the comparatives for the period
listed on any stock exchange in India or outside ending 31 March 2016
India and having net worth of Rs.500 crore or more;
(ii) all other companies having net worth of Rs.500
crore or more; and (iii) holding, subsidiary, joint
venture or associate companies of the class of
companies covered in (i) and (ii) above
(i) companies whose equity and/or debt securities For accounting periods commencing on or after 1
are listed or proposed to be listed on any stock April 2017 with the comparatives for the period
exchange in India or outside India and having a net ending 31 March 2017,
worth of less than Rs. 500 crore; (ii) unliste d
companies having a net worth of Rs.250 Crores or
more but less than Rs. 500 crore; and (iii) holding, 3
subsidiary, joint venture or associate companies of
the class of companies covered in (i) and (ii) above
ROADMAP
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ROADMAP
NBFC’s
31st March 2019
31st March 2020
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ROAD MAP
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USEFUL FINANCIAL INFORMATION- CHARACTERISTICS
Fundamental Enhancing
Comparability
Relevance
Verifiability
Timeliness
Faithful representation
Understandability
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FRAMEWORK
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RECOGNITION
12
ASSET
Resource controlled by an entity as a result of past events and from which future economic
benefits are expected to flow
Potential to contribute to the flow of cash or cash equivalents
Physical form not necessary
Right of ownership not essential
Donated Assets
13
LIABILITY
Present obligation from past events the settlement of which is expected to result in an outflow of
economic benefits
Present obligation
Different from future commitment
Estimation
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EQUITY
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INCOME AND EXPENSES
Income Expenses
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CAPITAL AND CAPITAL MAINTENANCE
Reserves
Revaluation Reserves
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THE STANDARDS
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SOME NEW STANDARDS
Investment Property
Agriculture
Accounting for Hyper inflationary economies
Business Combinations
Exploration and Evaluation of Mineral Resources
Share-based payments
Consolidation
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WHAT’S DIFFERENT IN IND AS?
Extensive Disclosures
Compound Financial Instruments
Presentation
Customer loyalty programs
Service concession agreements
Website development costs
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IND AS 1
PRESENTATION OF FINANCIAL STATEMENTS
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OBJECTIVE
An entity shall apply this Standard in preparing and presenting general purpose
financial statements in accordance with Indian Accounting Standards (Ind ASs).
Other Ind ASs set out the recognition, measurement and disclosure requirements for
specific transactions and other events.
This Standard does not apply to the structure and content of condensed interim
financial statements prepared in accordance with Ind AS 34, Interim Financial
Reporting except for General Features of financial statements
This Standard applies equally to all entities, including those that present consolidated
financial statements in accordance with Ind AS 110, Consolidated Financial Statements,
and those that present separate financial statements in accordance with Ind AS 27,
Separate Financial Statements.
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SCOPE
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DEFINITIONS
Indian Accounting Standards (Ind ASs) are Standards prescribed under Section 133
of the Companies Act, 2013.
Material Omissions or misstatements of items are material if they could,
individually or collectively, influence the economic decisions that users make on
the basis of the financial statements. Materiality depends on the size and nature
of the omission or misstatement judged in the surrounding circumstances. The
size or nature of the item, or a combination of both, could be the determining
factor.
Other comprehensive income comprises items of income and expense (including
reclassification adjustments) that are not recognised in profit or loss as required
or permitted by other Ind ASs.
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IND AS 109
27
OCI
For particular liabilities designated as at fair value through profit or loss, the
amount of the change in fair value that is attributable to changes in the liability’s
credit risk
changes in the value of the time value of options when separating the intrinsic
value and time value of an option contract and designating as the hedging
instrument only the changes in the intrinsic value
changes in the value of the forward elements of forward contracts when
separating the forward element and spot element of a forward contract and
designating as the hedging instrument only the changes in the spot element, and
changes in the value of the foreign currency basis spread of a financial
instrument when excluding it from the designation of that financial instrument
as the hedging instrument
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OCI
Ind AS 117
Changes in discount rates
Disaggregation of finance income/expense between PL Account and OCI
PURPOSE OF FINANCIAL STATEMENTS
Structured Presentation of
Financial Position
Financial Performance
Results of Management Stewardship of the resources entrusted to it
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GENERAL FEATURES
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CAN AN ENTITY DEPART FROM IND AS?
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GENERAL FEATURES
Going concern
Accrual basis
Aggregation and materiality
Off-setting
Frequency of reporting
Comparative information
Balance Sheet, Profit or Loss, Cash Flow, Statement of Changes in Equity, Notes-Two
Minimum
34
GENERAL FEATURES
35
STRUCTURE AND CONTENT
General
identification of financial statements
clearly distinguished from other information
reporting period
at least annually,
to explain if longer or shorter
Information required
Name and change, if any
Individual or group financials
Period covered
Currency 36
Level of rounding
STRUCTURE AND CONTENT
Balance sheet
current vs. non-current distinction
or, classify based on liquidity if more relevant
obligatory line items on face of B/S
disclosure required on face or in notes
relevant sub-classifications of items above
information on share capital and reserves
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MINIMUM ITEMS
property, plant and equipment;
trade and other payables;
investment property;
provisions;
intangible assets;
financial liabilities
financial assets
liabilities and assets for current tax, as defined in
investments accounted for using the equity Ind AS 12, Income Taxes;
method;
deferred tax liabilities and deferred tax assets, as
biological assets within the scope of Ind AS 41 defined in Ind AS 12;
Agriculture;
liabilities included in disposal groups classified as
inventories; held for sale in accordance with Ind AS 105;
trade and other receivables; non-controlling interests, presented within
cash and cash equivalents; equity; and
the total of assets classified as held for sale issued capital and reserves attributable to
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owners of the parent.
STRUCTURE AND CONTENT
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STRUCTURE AND CONTENT
40
STRUCTURE AND CONTENT
Income statement
obligatory line items on face of Profit or Loss
To show as allocation
Profit or loss attributable to Minority Interest
Profit or loss attributable to equity holders of the parent
expenses analysed on basis of
Nature
Dividends should be disclosed plus per share (or in statement of
changes in equity
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STRUCTURE AND CONTENT
Minimum Items on the face of the income statement
(a) revenue, presenting separately interest revenue calculated
using the effective interest method;
(aa) gains and losses arising from the derecognition of financial
assets measured at amortised cost;
(b) finance costs;
(ba) impairment losses (including reversals of impairment losses or
impairment gains)
(c) share of the profit or loss of associates and joint ventures
accounted for using the equity method; 42
.
MINIMUM ITEMS
44
QUESTIONS
Your company has no Investment Property. Would you present the line item
Investment Property ….Nil
or not show it at all?
Your company has a Revenue of Rs 100 crores, Net Profit of Rs 15 crores and Finance Cost of Rs
1,45,000/-. Would you present the Finance Cost as a separate line item or merge it with “ Other
Costs”?
Would your answer be different if the Finance Costs were appearing for the first time?
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STRUCTURE AND CONTENT
47
DIFFERENCES WITH AS 1/AS 5
Ind AS AS
Components of Financial Statements 1. SOFP 1. Revised Schedule VI
2. SOCI 2. Different Regulators
3. SOCF
4. SOCIE
5. Explanatory Notes
Formats Illustrative only Revised Schedule VI
Presentation Expenses by nature or function Expenses by nature. 1% of revenue
from operation or Rs 100,000 needs
to be disclosed
Different terms
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INDIAN PRESENTATION
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QUESTIONS
Equity, Liability and Assets are components of Financial Statements. – True or False
What are the components of Other Comprehensive Income?
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MCQ
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MATERIAL ACCOUNTING POLICIES
GST
Income Tax
Business Combinations
Provisions
ACCOUNTING POLICIES, CHANGES IN ACCOUNTING
ESTIMATES AND ERRORS:
IND AS 8
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RELATED STANDARDS
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IND AS 8 – OVERVIEW
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IND AS 8 – OBJECTIVE AND SCOPE
Key is comparability
Objectives:
How to choose accounting policies
Reporting changes in accounting policies
Reporting changes in estimates
Reporting the correction of errors
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IND AS 8 – ACCOUNTING POLICIES
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IND AS 8 – SELECTION AND APPLICATION OF ACCOUNTING
POLICIES
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IND AS 8
Accounting policies -
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IND AS 8
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IND AS 8
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IND AS 8 – CHANGES IN ACCOUNTING
POLICIES
⚫ Retrospective application:
for the earliest prior period presented
adjust opening balance of equity affected
adjust opening balance of other comparative amounts disclosed
⚫ Unless
impracticable to determine effects on specific prior periods or cumulative effect
of change
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IND AS 8 – CHANGES IN ACCOUNTING
POLICIES
Impracticable: not able to determine adjustments needed after making reasonable effort, i.e.,
effects of retroactive changes not determinable
assumptions needed about management’s intentions in the prior period
cannot make estimates without knowing circumstances that existed in the prior period; can only do using
hindsight
Example: need to estimate fair value of private company three years ago. Need to know expectations that
existed then regarding cash flows and risk-adjusted discount rate. Not possible in many situations.
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IND AS 8 – CHANGES IN ACCOUNTING POLICIES
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IND AS 8 – CHANGES IN ACCOUNTING
POLICIES
Also disclosures about new Ind AS released but not yet effective
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IND AS 8 – CHANGES IN ACCOUNTING ESTIMATES
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IND AS 8 – CHANGES IN ACCOUNTING
ESTIMATES
⚫ Disclose
Nature of the change
Amount of the change, unless effect on future periods impracticable to estimate
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IND AS 8 – CORRECTIONS OF ERRORS
Prior period error – an omission or misstatement in previously reported financial statements from
failing to use/misuse of reliable information that
Was available when F/S were authorized, and
Could reasonably be expected to have been used in preparing those F/S
e.g., arithmetic mistakes, mistakes in applying accounting policies, oversights, misrepresentation
of facts, fraud
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IND AS 8 – CORRECTIONS OF ERRORS
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IND AS 8 – CORRECTIONS OF ERRORS
⚫ Disclose
Nature of the error
Amount of correction for each F/S item, EPS, and to prior periods
If judged impracticable to apply retrospectively, explain why, how applied and date from
which error is corrected
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DIFFERENCES WITH INDIAN GAAP
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ISSUES
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SUGGESTED READING
76
Ind AS Course
ICAI
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Ind AS Course
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