अगर आप सही Accounting न करें… | Why Correct Accounting Matters?Accurate Accounting क्यों है Crucial

1. Difference between AS, Ind AS, and IFRS

**AS**: India’s legacy GAAP, rule-based and India-specific.
**Ind AS**: Converged with IFRS, principle-based while including carve-outs to reflect India’s laws and economic environment.
**IFRS**: Global accounting standards issued by IASB.
**Examples**:

**Leases**: AS 19 treated some leases off-balance sheet. Ind AS 116 (like IFRS 16) brings most leases on the balance sheet.
**Revenue**: AS 9 was less structured. Ind AS 115 follows IFRS 15’s detailed five-step revenue model.
2. Why India moved from AS to Ind AS; objective of convergence

Improve **transparency**, **comparability**, and **investor confidence**.
Support easier *cross-border investments* and financial statement comparability with global peers.


3. Are Ind AS and IFRS the same? Key carve-outs

Mostly aligned, but Indian-specific carve-outs include:

*Hedge accounting* simplified under Ind AS 109.
**Common-control business combinations**: pooling allowed under Ind AS but not IFRS.
*Agriculture, MAT, deferred tax treatments* adapted for Indian context.
*Presentation* differences: segregated formats, no “extraordinary items,” etc.

4. Which companies must adopt Ind AS, and when?

**Phase I (from April 1, 2016)**: listed companies + unlisted with net worth ≥ ₹500 cr.
**Phase II (from April 1, 2017)**: listed and unlisted companies with ₹250–500 cr net worth.
**Phase III (from April 1, 2018–19)**: banks and NBFCs with net worth ≥ ₹500 cr; later extended to ₹250–500 cr.
Applies to standalone and consolidated statements; voluntary adoption is generally not allowed for banks/NBFCs.

5. Structure and updates of Ind AS

Parallel numbering with IFRS (e.g., Ind AS 115, 116).
Issued by ICAI’s Accounting Standards Board under MCA supervision.
Currently about 40 notified standards, with ongoing updates to align with IFRS while retaining India-specific carve-out

6. Challenges for SMEs migrating from AS to Ind AS

Complex *transition adjustments* and dual-reporting demands.
Need for **system upgrades**, new processes, and staff training.
Increased *compliance costs* and demand for detailed disclosures.

7. Effect on taxation – MAT and Deferred Tax

Fair value accounting under Ind AS leads to new *deferred tax* differences.
*MAT reconciliation* needed between tax book profits and Ind AS profits.

8. ERP/accounting system changes post-Ind AS

Systems need to support:

Lease accounting (right-of-use assets, liabilities)
Updated revenue modules aligned with Ind AS 115
Fair value measurements
Deferred tax tracking
Consolidation and segment reporting capabilities

9. Additional disclosures required under Ind AS vs AS

More detailed notes are required, including:

*Segment reporting*
*Related party transactions*
*Fair-value hierarchy*
*Business combinations*
*First-time adoption notes*
Ind AS disclosure requirements are more rigorous than under old AS.


10. Role of ICAI

Develops and issues Ind AS standards and updates.
Provides *implementation support* via guidance, FAQs, support desks.
Offers **training**, CPD programs, and coordinates with regulators (MCA, RBI, SEBI).


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