MCA vide notification dated 16th February 2015 in consultation with National Advisory Committee on Accounting Standards, has issued the Companies (Indian Accounting Standards) Rules, 2015.

The gist of the rules is given below

• The rule shall come into force on the 1st day of April, 2015
• The accounting standards as specified in the Annexure to the rules to be called the Indian Accounting Standards (Ind AS)
• On voluntary basis

  For financial statements for accounting periods beginning on or after April 1, 2015, with the comparatives for the periods ending 31st March, 2015 or thereafter, any company may comply with Ind AS.

• On mandatory basis

  Following classes of companies are mandatorily required to comply with Ind AS.

   

  S.No	Companies	Eligibility	W.e.f
  1	Companies whose equity and/or debt securities are listed or are in the process of listing on any stock exchange in India or outside India	Having net worth of Rs. 500 Crore or more	For the accounting periods beginning on or after April 1, 2016, with comparatives for the periods ending 31st March, 2016, or thereafter
  2	Companies other than those specified above	Having net worth of Rs. 500 Crore or more
  3	Holding, subsidiary, joint venture or associate companies of companies covered under (1) and (2)	N.A.
  4	Companies whose equity and/or debt securities are listed or are in the process of being listed on any stock exchange in India or outside India	Having net worth of less than Rs 500 Crore	For the accounting periods beginning on or after April 1, 2017, with comparatives for the periods ending 31st March, 2017, or thereafter
  5	Companies other than those covered in (1)-(4) i.e. an unlisted companies	Having net worth of Rs 250 crore or more but less than Rs 500 Crore.
  6	Holding, subsidiary, joint venture or associate companies of companies covered under (4) and (5)	N.A.

• The requirement to mandatory comply with Ind AS shall not be complied by

• • Companies whose securities are listed or are in the process of being listed on SME exchange as referred to in Chapter XB or on the Institutional Trading Platform without initial public offering in accordance with the provisions of Chapter XC of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.
  • Insurance companies, banking companies and non-banking finance companies.

• The Accounting standards as specified in Annexure to the Companies (Accounting Standards) Rules, 2006 shall be the Accounting Standards applicable to the companies other than the classes of companies which are voluntarily or mandatorily complying with Ind AS
• A company which follows the Indian Accounting Standards (Ind AS) shall follow such standards only.
• The rules prescribes the principle for purpose of calculating networth.
• Ind AS shall apply to both stand-alone financial statements and consolidated financial statements.
• Companies which are required to comply Indian Accounting Standards (Ind AS) shall prepare their first set of financial statements in accordance with the Indian Accounting Standards (Ind AS) effective at the end of its first Indian Accounting Standards (Ind AS) reporting period.
• Overseas subsidiary, associate, joint venture and other similar entities of an Indian company may prepare its standalone financial statements in accordance with the requirements of the specific jurisdiction. But such Indian company shall prepare its consolidated financial statements in accordance with the Indian Accounting Standards (Ind AS) either voluntarily or mandatorily if it meets the criteria.
• Indian company which is a subsidiary, associate, joint venture and other similar entities of a foreign company shall prepare its financial statements in accordance with the Indian Accounting Standards (Ind AS) either voluntarily or mandatorily if it meets the criteria.
• Any company opting to apply the Indian Accounting Standards (Ind AS) voluntarily for its financial statements shall prepare its financial statements as per the Indian Accounting Standards (Ind AS) consistently. Such companies shall not be required to prepare another set of financial statements in accordance with Accounting Standards specified in Annexure to Companies (Accounting Standards) Rules, 2006
• It is clarified that once a company starts following the Indian Accounting Standards (Ind AS) either voluntarily or mandatorily, it shall be required to follow the Indian Accounting Standards (Ind AS) for all the subsequent financial statements even if any of the criteria specified in this rule does not subsequently apply to it.

List of Indian Accounting Standards (Ind AS)