What is Ind AS?
Ind AS, or Indian Accounting Standards, are a set of accounting principles and standards that govern the preparation and presentation of financial statements in India. These standards align with International Financial Reporting Standards (IFRS), ensuring consistency and comparability in financial reporting globally.
Origin of Ind As:-
Accounting standards set by US Accounting standards board (FASB) (Known as “US GAAP”) and IFRS thsi two prominent and widely used accounting standards have emrged on 2002 G20 summit. India made commitment towards the assemble of “Indian accounting standards” with IFRS at G20 summit in 2009.In line with this, MCA issued plan for implementation of IndAs coverged with IFRS instarting of 2011. But this was suspended due to some tax and other issues. In the presentation of union budget 2014-15, the finance minister proposed the adoption of Indian Accounting Standards called IndAs.
Why Ind AS Matters:-
- Global Integration: Ind AS facilitates global comparability of financial statements, enabling Indian companies to compete on an international level seamlessly.
- Transparency: By adhering to Ind AS, companies enhance transparency and accountability in financial reporting, fostering investor confidence.
- Improved Decision Making: Ind AS provides stakeholders with reliable financial information, aiding informed decision-making processes.
List of Ind AS
Here is the list of notified List of Indian Accounting standards called “Ind As”.
Ind AS 1: Presentation of Financial Statements
Ind AS 1 sets out the overall requirements for the presentation of financial statements, including guidelines for their structure and content. It aims to ensure that financial statements provide relevant and reliable information to users for making economic decisions.
Ind AS 2: Inventories
Ind AS 2 prescribes the accounting treatment for inventories, including measurement at the lower of cost and net realizable value. It provides guidance on cost formulas, such as FIFO (First In, First Out) and weighted average cost, and requires disclosure of inventory policies.
Ind AS 3: Business Combinations
Ind AS 3 outlines the accounting treatment for business combinations, including the determination of the acquirer, recognition and measurement of identifiable assets acquired, liabilities assumed, and goodwill or gain from a bargain purchase.
Ind AS 4: Insurance Contracts
Ind AS 4 provides guidance on the accounting for insurance contracts, including recognition, measurement, and disclosure requirements. It aims to ensure that insurers provide relevant and reliable information about their insurance activities in the financial statements.
Ind AS 5: Non-current Assets Held for Sale and Discontinued Operations
Ind AS 5 sets out the accounting treatment for non-current assets held for sale and discontinued operations. It requires such assets to be measured at the lower of carrying amount and fair value less costs to sell and requires discontinued operations to be presented separately in the financial statements.
Ind AS 6: Exploration for and Evaluation of Mineral Resources
Ind AS 6 prescribes the accounting treatment for exploration and evaluation expenditures related to mineral resources. It requires such expenditures to be recognized as assets or expensed, depending on the stage of exploration or evaluation.
Ind AS 7: Statement of Cash Flows
Ind AS 7 requires entities to provide information about their cash flows from operating, investing, and financing activities. It aims to enable users to assess the entity’s ability to generate cash and its liquidity and solvency.
Ind AS 8: Accounting Policies, Changes in Accounting Estimates and Errors
Ind AS 8 sets out the criteria for selecting and changing accounting policies, as well as the treatment of changes in accounting estimates and errors. It aims to ensure that financial statements are prepared using consistent and reliable accounting policies.
Ind AS 9: Financial Instruments
Ind AS 9 prescribes the accounting treatment for financial instruments, including classification, measurement, derecognition, and hedge accounting. It aims to provide users of financial statements with relevant and reliable information about an entity’s financial instruments.
Ind AS 10: Events after the Reporting Period
Ind AS 10 requires entities to disclose events that occur after the reporting period but before the financial statements are authorized for issue. It aims to ensure that users of financial statements are aware of significant events that may affect the entity’s financial position.
Ind AS 11: Construction Contracts
Ind AS 11 provides guidance on the accounting treatment for construction contracts, including recognition of revenue and expenses, measurement of contract revenue and costs, and disclosure requirements. It aims to ensure that revenue and expenses related to construction contracts are recognized appropriately.
Ind AS 12: Income Taxes
Ind AS 12 prescribes the accounting treatment for income taxes, including recognition of current and deferred tax assets and liabilities. It aims to ensure that the tax consequences of transactions and events are reflected accurately in the financial statements.
Ind AS 13: Fair Value Measurement
Ind AS 13 provides guidance on the measurement of fair value for financial reporting purposes. It sets out a framework for measuring fair value and requires disclosures to enable users to understand the methods and inputs used.
Ind AS 14: Regulatory Deferral Accounts
Ind AS 14 addresses the accounting treatment for regulatory deferral accounts, which arise when regulators allow or require an entity to defer the recovery of certain costs or revenues. It provides guidance on how to recognize, measure, and present such regulatory assets and liabilities.
Ind AS 15: Revenue from Contracts with Customers
Ind AS 15 establishes principles for recognizing revenue from contracts with customers. It provides a comprehensive framework for determining when to recognize revenue and how much revenue to recognize, aiming to improve comparability and transparency in financial reporting.
Ind AS 16: Property, Plant, and Equipment
Ind AS 16 prescribes the accounting treatment for property, plant, and equipment, including recognition, measurement, depreciation, and impairment. It aims to ensure that assets are recorded at their cost and accurately reflect their subsequent changes in value.
Ind AS 17: Leases
Ind AS 17 outlines the accounting treatment for leases, distinguishing between finance leases and operating leases. It requires lessees and lessors to recognize and measure leases based on their substance and economic reality.
Ind AS 18: Revenue
Ind AS 18 prescribes the accounting treatment for revenue from the sale of goods, rendering of services, and use of assets by others. It provides guidance on when to recognize revenue and how to measure it, aiming to ensure that revenue is recognized when it is earned and can be reliably measured.
Ind AS 19: Employee Benefits
Ind AS 19 prescribes the accounting treatment for employee benefits, including short-term benefits, post-employment benefits, and other long-term employee benefits. It aims to ensure that the cost of providing employee benefits is recognized in the financial statements when incurred.
Ind AS 20: Accounting for Government Grants and Disclosure of Government Assistance
Ind AS 20 provides guidance on the accounting treatment for government grants and disclosure of government assistance. It requires entities to account for government grants based on their nature and conditions attached to them.
Ind AS 21: The Effects of Changes in Foreign Exchange Rates
Ind AS 21 prescribes the accounting treatment for foreign currency transactions and translations. It requires entities to translate foreign currency transactions into their functional currency and recognize any resulting exchange differences in the financial statements.
Ind AS 22: Business Combinations
Ind AS 22 outlines the accounting treatment for business combinations, including the determination of the acquirer, recognition and measurement of identifiable assets acquired, liabilities assumed, and goodwill or gain from a bargain purchase.
Ind AS 23: Borrowing Costs
Ind AS 23 prescribes the accounting treatment for borrowing costs, including the recognition, measurement, and disclosure requirements. It aims to ensure that borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets are capitalized.
Ind AS 24: Related Party Disclosures
Ind AS 24 requires entities to disclose information about their transactions with related parties. It aims to ensure that users of financial statements are aware of the nature and extent of related party transactions that may affect an entity’s financial position and performance.
Ind AS 25: Interim Financial Reporting
Ind AS 25 prescribes the accounting principles and disclosure requirements for interim financial reporting. It aims to provide users of financial statements with timely information about an entity’s financial performance and position during the reporting period.
Ind AS 26: Accounting and Reporting by Retirement Benefit Plans
Ind AS 26 sets out the accounting and reporting requirements for retirement benefit plans, including defined contribution plans, defined benefit plans, and other post-employment benefit plans. It aims to ensure that the financial statements of retirement benefit plans provide relevant and reliable information to users.
Ind AS 27: Separate Financial Statements
Ind AS 27 outlines the accounting treatment for investments in subsidiaries, associates, and joint ventures when an entity prepares separate financial statements. It requires such investments to be accounted for using the cost method, the equity method, or the fair value method.
Ind AS 28: Investments in Associates and Joint Ventures
Ind AS 28 provides guidance on the accounting treatment for investments in associates and joint ventures. It requires entities to use the equity method to account for investments in associates and joint ventures, reflecting the entity’s proportionate share of the investee’s net assets.
Ind AS 29: Financial Reporting in Hyperinflationary Economies
Ind AS 29 prescribes the accounting treatment for financial reporting in hyperinflationary economies. It requires entities to restate their financial statements in terms of the measuring unit current at the reporting date and to provide additional disclosures to enable users to understand the effects of hyperinflation on the entity’s financial position and performance.
Ind AS 30: Disclosures in the Financial Statements of Banks and Similar Financial Institutions
Ind AS 30 provides guidance on the disclosures to be made in the financial statements of banks and similar financial institutions. It requires entities to provide information about their risk exposures, including credit risk, market risk, and liquidity risk, and about the nature and extent of their financial instruments.
Ind AS 31: Interests in Joint Ventures
Ind AS 31 outlines the accounting treatment for interests in joint ventures, distinguishing between joint operations and joint ventures. It requires entities to account for interests in joint ventures using the equity method, reflecting the entity’s proportionate share of the joint venture’s assets, liabilities, revenues, and expenses.
Ind AS 32: Financial Instruments: Presentation
Ind AS 32 prescribes the presentation requirements for financial instruments, distinguishing between financial assets and financial liabilities. It requires entities to present financial instruments as either assets or liabilities on the balance sheet, based on their contractual rights and obligations.
Ind AS 33: Earnings per Share
Ind AS 33 sets out the principles for calculating and presenting earnings per share. It requires entities to disclose both basic and diluted earnings per share, providing users of financial statements with information about the entity’s profitability on a per-share basis.
Ind AS 34: Interim Financial Reporting
Ind AS 34 prescribes the accounting principles and disclosure requirements for interim financial reporting. It aims to provide users of financial statements with timely information about an entity’s financial performance and position during the reporting period.
Ind AS 35: Discontinuing Operations
Ind AS 35 outlines the accounting treatment for discontinuing operations, including the classification, measurement, and presentation of assets and liabilities held for sale and the recognition of provisions for the costs of disposal. It aims to ensure that discontinued operations are reported separately in the financial statements and that users are informed about the financial effects of discontinuing operations.
Ind AS 36: Impairment of Assets
Ind AS 36 prescribes the accounting treatment for impairment of assets, requiring entities to assess whether there are any indicators of impairment for their assets and, if so, to measure and recognize any impairment loss. It aims to ensure that assets are carried at no more than their recoverable amount and that impairment losses are recognized in a timely manner.
Ind AS 37: Provisions, Contingent Liabilities, and Contingent Assets
Ind AS 37 sets out the requirements for recognizing and measuring provisions, contingent liabilities, and contingent assets. It requires entities to recognize provisions when there is a present obligation arising from a past event, and it requires disclosure of contingent liabilities and contingent assets, providing users of financial statements with information about the entity’s potential obligations and assets.
Ind AS 38: Intangible Assets
Ind AS 38 prescribes the accounting treatment for intangible assets, requiring entities to recognize intangible assets if certain criteria are met and to measure them initially at cost. It provides guidance on subsequent measurement, amortization, and impairment testing of intangible assets, aiming to ensure that they are reported accurately in the financial statements.
Ind AS 39: Financial Instruments: Recognition and Measurement
Ind AS 39 prescribes the recognition and measurement requirements for financial instruments, including classification, initial recognition, subsequent measurement, and derecognition. It aims to ensure that financial instruments are accounted for accurately and reflect their economic substance.
Ind AS 40: Investment Property
Ind AS 40 prescribes the accounting treatment for investment property, requiring entities to measure investment property at cost or fair value and to recognize changes in fair value in profit or loss. It aims to ensure that investment property is accounted for accurately and reported at its fair value.
Ind AS 41: Agriculture
Ind AS 41 prescribes the accounting treatment for agricultural activity, including the initial recognition and measurement of agricultural assets, biological assets, and agricultural produce, as well as the subsequent measurement and disclosure requirements. It aims to ensure that agricultural activity is accounted for accurately and reported in accordance with relevant accounting standards.
Ind AS 101: First-time Adoption of Indian Accounting Standards
Ind AS 101 outlines the guidelines for the initial adoption of IndAS, including the transition process and exemptions available to entities.
Ind AS 102: Share-Based Payment
This standard prescribes the accounting treatment for share-based payment transactions, including equity-settled, cash-settled, and share-based payments with cash alternatives.
Ind AS 103: Business Combinations
Ind AS 103 details the accounting treatment for business combinations, including the recognition and measurement of assets and liabilities acquired.
Ind AS 104: Insurance Contracts
Ind AS 104 addresses the accounting for insurance contracts, providing guidance on recognition, measurement, presentation, and disclosure requirements.
Ind AS 105: Non-current Assets Held for Sale and Discontinued Operations
This standard outlines the accounting treatment for non-current assets held for sale and discontinued operations, including measurement, presentation, and disclosure requirements.
Ind AS 106: Exploration for and Evaluation of Mineral Resources
Ind AS 106 focuses on the accounting treatment for exploration and evaluation expenditures related to mineral resources, providing guidelines for recognition and measurement.
Ind AS 107: Financial Instruments: Disclosures
Ind AS 107 sets out the disclosure requirements for financial instruments, including qualitative and quantitative information to enable users to evaluate the nature and extent of risks arising from financial instruments.
Ind AS 108: Operating Segments
This standard requires entities to disclose information about their operating segments, including revenue, profit or loss, assets, and liabilities, to enable users to evaluate the entity’s past performance and make more informed decisions.
Ind AS 109: Financial Instruments
Ind AS 109 addresses the classification, measurement, and recognition of financial assets and liabilities, incorporating principles for hedge accounting and impairment.
Ind AS 110: Consolidated Financial Statements
Ind AS 110 prescribes the requirements for the preparation and presentation of consolidated financial statements, including the principles for determining control and consolidation procedures.
Ind AS 111: Joint Arrangements
Ind AS 111 deals with accounting for joint arrangements, where two or more parties jointly control the arrangement. It provides guidance on how such arrangements should be recognized, measured, and disclosed in the financial statements.
Ind AS 112: Disclosure of Interests in Other Entities
Ind AS 112 requires entities to disclose information about their interests in subsidiaries, joint arrangements, associates, and structured entities. It aims to provide users of financial statements with information to assess the nature and financial effects of those interests.
Ind AS 113: Fair Value Measurement
Ind AS 113 provides guidance on how to measure fair value for financial reporting purposes. It establishes a single framework for measuring fair value and sets out disclosure requirements to enable users to understand the methods and inputs used to determine fair value.
Ind AS 114: Regulatory Deferral Accounts
Ind AS 114 addresses the accounting treatment for regulatory deferral accounts, which arise when regulators allow or require an entity to defer the recovery of certain costs or revenues. It provides guidance on how to recognize, measure, and present such regulatory assets and liabilities.
Ind AS 115: Revenue from Contracts with Customers
Ind AS 115 establishes principles for recognizing revenue from contracts with customers. It provides a comprehensive framework for determining when to recognize revenue and how much revenue to recognize, aiming to improve comparability and transparency in financial reporting.
Conclusion
Navigating through the intricate landscape of accounting standards can be daunting, but a comprehensive understanding of IndAS is indispensable for financial compliance and reporting in India. By aligning with these standards and staying abreast of updates, businesses can enhance transparency, credibility, and global competitiveness in today’s dynamic marketplace. Embrace the power of IndAS to unlock new opportunities and propel your organization towards sustainable growth.
Following the link of Ministry of Corporate Affairs website link for more details regarding Accounting standards:-
https://www.mca.gov.in/content/mca/global/en/acts-rules/ebooks/accounting-standards.html
