Indian Accounting Standards (Ind AS) are a set of financial reporting standards aligned with the International Financial Reporting Standards (IFRS), designed to enhance transparency and global comparability for Indian companies. As Indian businesses expand internationally, harmonizing local accounting practices with global norms has become increasingly important. The adoption of Ind AS strengthens the reliability and consistency of financial statements, enabling stakeholders to make informed decisions. Issued by the Institute of Chartered Accountants of India (ICAI), these standards help Indian companies meet international expectations, building trust and credibility in global markets. This article provides a comprehensive overview of Indian Accounting Standards (Ind AS). Streamline your financial management with expert accounting support from Auriga Accounting pvt. ltd!
What Are Indian Accounting Standards (Ind AS)?
Indian Accounting Standards (Ind AS) are financial reporting standards converged with the International Financial Reporting Standards (IFRS) and issued by the Central Government of India. They are developed under the guidance of the Accounting Standards Board (ASB) of the Institute of Chartered Accountants of India (ICAI), in consultation with the National Financial Reporting Authority (NFRA). These standards are mandatory for specific categories of companies to ensure their financial statements align with global reporting practices.
Established in 1977, the ASB is responsible for drafting, updating, and implementing Ind AS, making them the primary accounting framework adopted by companies across India.
Objectives of Indian Accounting Standards (Ind AS)
Ind AS was introduced to align Indian accounting methods with international norms. The key objectives include:
1. Uniformity and Consistency
Ind AS creates a standardized framework for accounting across all industries and sectors. This ensures financial statements are comparable, consistent, and easier to interpret.
2. International Convergence
A core goal of Ind AS is to converge Indian standards with IFRS, enabling smoother international trade, global investment, and cross-border financial activities.
3. Transparency and Accountability
Companies must disclose detailed and relevant information about their financial performance, position, and cash flows. This transparency boosts accountability and empowers stakeholders to make informed decisions.
4. Reliability and Credibility
Ind AS ensures that financial information reflects the true economic impact of business transactions. This enhances trust and credibility in financial reporting.
5. Investor Protection
By providing reliable, consistent, and comparable information, Ind AS helps protect investors and supports better investment decisions.
6. Facilitation of Cross-Border Transactions
Alignment with IFRS simplifies the consolidation and comparison of financial statements globally, making Indian companies more accessible to international markets.
Advantages of Indian Accounting Standards
Key benefits of adopting Ind AS include:
A clear and consistent accounting framework that reduces ambiguity.
Uniform application of accounting principles across industries.
Improved global comparability due to IFRS convergence.
Enhanced transparency and consistency in financial reporting.
More efficient and effective audit processes.
Increased credibility and investor confidence.
Better performance evaluation of management.
Reduced scope for manipulation and fraudulent financial reporting.
List of Indian Accounting Standards (Ind AS)
Below is the major list of Ind AS standards:
| Ind AS No. | Description |
|---|---|
| Ind AS 1 | Presentation of Financial Statements |
| Ind AS 2 | Inventories |
| Ind AS 7 | Statement of Cash Flows |
| Ind AS 8 | Accounting Policies, Changes in Accounting Estimates and Errors |
| Ind AS 10 | Events after Reporting Period |
| Ind AS 11 | Construction Contracts |
| Ind AS 12 | Income Taxes |
| Ind AS 16 | Property, Plant and Equipment |
| Ind AS 17 | Leases |
| Ind AS 18 | Revenue |
| Ind AS 19 | Employee Benefits |
| Ind AS 20 | Government Grants & Government Assistance |
| Ind AS 21 | Effects of Changes in Foreign Exchange Rates |
| Ind AS 23 | Borrowing Costs |
| Ind AS 24 | Related Party Disclosures |
| Ind AS 27 | Separate Financial Statements |
| Ind AS 28 | Investments in Associates and Joint Ventures |
| Ind AS 29 | Financial Reporting in Hyperinflationary Economies |
| Ind AS 32 | Financial Instruments: Presentation |
| Ind AS 33 | Earnings per Share |
| Ind AS 34 | Interim Financial Reporting |
| Ind AS 36 | Impairment of Assets |
| Ind AS 37 | Provisions, Contingent Liabilities and Contingent Assets |
| Ind AS 38 | Intangible Assets |
| Ind AS 40 | Investment Property |
| Ind AS 41 | Agriculture |
| Ind AS 101 | First-time Adoption of Ind AS |
| Ind AS 102 | Share-Based Payments |
| Ind AS 103 | Business Combinations |
| Ind AS 104 | Insurance Contracts |
| Ind AS 105 | Non-Current Assets Held for Sale and Discontinued Operations |
| Ind AS 106 | Exploration for and Evaluation of Mineral Resources |
| Ind AS 107 | Financial Instruments: Disclosures |
| Ind AS 108 | Operating Segments |
| Ind AS 109 | Financial Instruments |
| Ind AS 110 | Consolidated Financial Statements |
| Ind AS 111 | Joint Arrangements |
| Ind AS 112 | Disclosure of Interests in Other Entities |
| Ind AS 113 | Fair Value Measurement |
| Ind AS 114 | Regulatory Deferral Accounts |
| Ind AS 115 | Revenue from Contracts with Customers |
Applicability of Indian Accounting Standards
The Ministry of Corporate Affairs (MCA) has rolled out Ind AS in phases to ensure smooth nationwide adoption.
Phase I – Effective 1 April 2016
Applicable to:
Listed and unlisted companies with net worth ≥ ₹500 crore (based on FY 2013-14, 2014-15, 2015-16).
Phase II – Effective 1 April 2017
Applicable to:
Listed companies or companies in the process of listing (as of 31 March 2016) with net worth ₹250–₹500 crore.
Phase III – Effective 1 April 2018
Applicable to:
Banks, NBFCs, and insurance companies with net worth ≥ ₹500 crore (based on FY 2015-16 to 2017-18).
Note: IRDA will issue a separate set of Ind AS for insurance companies.
Phase IV – Effective 1 April 2019
Applicable to:
NBFCs with net worth ₹250–₹500 crore.
Important Notes
Once Ind AS applies to a company, its subsidiaries, associates, joint ventures, and holding companies must also adopt Ind AS, irrespective of their net worth.
Foreign operations of Indian companies may continue using local GAAP for standalone reporting but must provide Ind AS-adjusted figures for consolidation.
Voluntary Adoption of Ind AS
Companies may voluntarily adopt Ind AS for financial periods beginning on or after 1 April 2015.
However:
Comparative financial statements (e.g., for the year ending 31 March 2015) must also be prepared under Ind AS.
Once adopted, a company cannot revert to previous Indian GAAP.
Difference Between Ind AS and IFRS
| Feature | IFRS | Ind AS |
|---|---|---|
| Definition | Global accounting standards | Indian version of IFRS with modifications |
| Issued by | IASB | MCA, India |
| Implemented in | 144+ countries | Only in India |
| Disclosure | Requires companies to state IFRS compliance | No mandatory declaration |
| Financial Statements | Statement of financial position, profit & loss, equity changes, cash flows | Balance sheet, P&L, cash flows, equity changes, notes, policies |
| Balance Sheet Format | Strict classification guidelines | Guidelines exist but are less prescriptive |
MCA Notification on Companies (Indian Accounting Standards) Amendment Rules, 2024
On 14 August 2024, the Ministry of Corporate Affairs (MCA) released an official notification announcing the Companies (Indian Accounting Standards) Amendment Rules, 2024. These amendments introduced key changes to the Companies (Indian Accounting Standards) Rules, 2015, and came into effect from the date of their publication in the Official Gazette.
MCA Notification on Companies (Indian Accounting Standards) Second Amendment Rules, 2024
On 9 September 2024, the MCA issued the Companies (Indian Accounting Standards) Second Amendment Rules, 2024, bringing further updates to the Ind AS framework. Issued under the Companies Act, 2013, these amendments aim to strengthen the accuracy, quality, and uniformity of financial reporting in India. The rules became effective immediately upon publication and were formulated in consultation with the National Financial Reporting Authority (NFRA), reflecting its expert recommendations.
About the Author
Vinod
Vinod is an experienced legal writer who breaks down complex legal concepts into clear, practical insights. He helps entrepreneurs understand their legal obligations and build confident, compliant, and sustainable businesses.
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