ICAI bats for Indian Accounting Standards from April 2016
July, 24th 2014
In order to help India become an International Financial Reporting Standards (IFRS)-converged country, as part of its G-20 commitments, Institute of Chartered Accountants of India (ICAI) has finalised the road map for the implementation of Indian Accounting Standards (Ind AS) starting April 1, 2016. A proposal to this effect has been sent to the ministry of corporate affairs for its consideration, ICAI officials said.
As per the roadmap, the consolidated financial statements of listed companies and unlisted companies, having net worth in excess of R500 crore, will be prepared as per Ind AS from the accounting year beginning on or after April 1, 2016 with previous year comparatives in Ind AS for the year 2015-16, the ICAI said.
According to ICAI President, K Raghu, "Further, implementation of Ind AS from 1st April, 2016, with previous year Ind AS comparatives for 2015-16, would allow industry ample time to prepare themselves for the Ind AS, with certain subsequent revisions and amendments after 2011, which have been and are being carried out by the ICAI to keep pace with IFRS revisions/amendments."
The recommendation of the ICAI to implement Ind AS for preparation of only the 'consolidated financial statements' would have the advantage that Ind AS would have no tax implications as well as implications for computation of managerial remuneration and dividend distribution etc, ICAI said on Monday. As per the statement, ICAI said: "...It will have no tax or other implications...The existing notified Accounting Standards would continue to be used as is the practice in almost all countries that have adopted or converged with IFRS." The decision to enforce the implementation of Ind AS from April1, 2016 was taken by the council of ICAI at its last held on March 20-22.
"The stand-alone financial statements will continue to be prepared as per the existing notified Accounting Standards which would be upgraded over a period of time," ICAI said. The ministry of corporate affairs (MCA) had earlier notified Ind AS converged with IFRS in 2011, but the Ind AS were not notified, as per the Press Release issued by MCA, primarily due to tax implications, ICAI statement said.
‘‘Since then the Parliament has passed the new Companies Act, 2013, which is in the process of notification by the MCA. The new Act has introduced various new provisions, including requirement to prepare Consolidated Financial Statements, which would facilitate implementation of Ind AS converged with