IND as Applicability

In 2015, the Ministry of Corporate Affairs notified the Companies (Indian Accounting Standards i.e. IND AS) Rules, 2015. Till date three Amendment Rules have already been issued by MCA amending thereby the said rules in the year 2016, 2017 and 2018.

Applicability of IND as –

Due to the new introduction, the applicability of IND AS had been introduced phase-wise. The following table would help to understand the applicability of IND AS –

EFFECTIVE DATE	PARTICULARS	REMARKS
1st April, 2016	IND AS applicable to following – The company (whether listed or not listed) having net worth for greater than or equal to INR 500 Crore. It must be noted that the holding, joint venture, subsidiary or associate companies of the company shall be covered above.	Net worth shall be checked on the basis of the preceding three previous years i.e. 2013-14, 2014-15 and 2015-16.
1st April, 2017	IND AS applicable to following – The company whose equity shares or debt securities are either listed or is in the process of being listed on any stock exchange in India or Outside India as on 31st March, 2016. Unlisted companies having net worth for greater than or equal to INR 250 Crore. It must be noted that the holding, joint venture, subsidiary or associate companies of the company shall be covered above.	Net worth shall be checked on the basis of the preceding four previous years i.e. 2013-14, 2014-15, 2015-16 and 2016-17.
1st April, 2018	IND AS applicable to all the Banks, insurance companies and NBFCs having the net worth of more than or equal to INR 500 Crore. NBFCs include stock brokers, core investment companies, venture capital etc. It must be noted that the holding, joint venture, subsidiary or associate companies of the company shall be covered above.	Net worth shall be checked on the basis of the preceding three previous years i.e. 2015-16, 2016-17 and 2017-18.
1st April, 2019	NBFCs whose equity or debt securities are listed or is in the process of listing on any of the stock exchange in India or outside India and the said NBFCs is having the net worth of less than INR 500 Crore. Unlisted NBFCs having the net worth greater than or equal to INR 250 Crore but less than INR 500 Crore. It must be noted that the holding, joint venture, subsidiary or associate companies of the company shall be covered above.

It must be noted that IND AS was made applicable from 1^st April, 2018 for all the banks, however, the Reserve Bank of India has postponed the applicability of IND AS on commercial banks (except regional rural banks) and the same would be applicable from 1^st April, 2019.

Similarly, IND AS was made applicable from 1^st April, 2018 on insurance companies, however, the Insurance Regulatory and Development Authority of India has postponed the applicability of IND AS in the insurance sector for two years and the same would be applicable from 1^st April, 2020.

Net worth calculation will be based on the accounts of the company as on 31^st March, 2014 or the first audited period ending after that date. Net worth shall be total of the following –

Net Worth = Paid up share capital + all the reserves out of the profits & securities premium account – (accumulated losses + deferred expenditure + miscellaneous expenditure not written off).

Companies are allowed to voluntarily select incorporation of IND AS in their accounting period beginning on or after 1^st April, 2015, however, it is important to note here that once the company opts to report their financial statement as per IND AS, they will have to apply it consistently for the rest of the year in future as well.