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Ind-AS & IFRS Advisory

Ind-AS / IFRS

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Regulatory Framework

Adoption of Indian Accounting Standards (Ind AS) is governed by the Companies (Indian Accounting Standards) Rules, 2015, notified on 16 February 2015 under Section 133 of the Companies Act, 2013, and rolled out in phases by net worth and listing status. Phase I applies from financial years commencing on or after 1 April 2016 to companies whose equity or debt securities are listed (or are in the process of being listed) on any Indian or foreign stock exchange with net worth of ₹500 crore or more, and to their holding, subsidiary, joint venture and associate companies. Phase II applies from financial years commencing on or after 1 April 2017 to all other listed companies (regardless of net worth) and to unlisted companies with net worth of ₹250 crore or more but below ₹500 crore, along with their holding, subsidiary, joint venture and associate companies.

Once a company falls within scope and applies Ind AS, adoption is irrevocable — it continues to apply Ind AS for all subsequent financial years even if its net worth later falls below the applicable threshold. Banks, NBFCs and insurance companies follow a separate roadmap set by their respective regulators (RBI mandated Ind AS for NBFCs meeting prescribed net-worth criteria in a phased manner from financial years beginning 1 April 2018/2019, since deferred by RBI pending IFRS 9-equivalent expected credit loss norms) and are excluded from the MCA's company-law timeline above. Net worth for threshold testing is computed as per Section 2(57) of the Companies Act, 2013, based on the company's last audited standalone financial statements as on 31 March of the relevant year(s).

Overview

Ind-AS and IFRS advisory is the conversion and the compliance of the financial reporting standards under which Indian companies report. The Indian Accounting Standards (Ind AS) are notified under Section 133 of the Companies Act 2013 read with the Companies (Indian Accounting Standards) Rules 2015, and they apply mandatorily to the companies by the phase-wise applicability — the listed and the large unlisted companies by net worth, with the thresholds prescribed in the Rules — while the IFRS are the international standards for the groups reporting to the foreign parents and the capital markets. The advisory is the mapping, the conversion and the ongoing compliance of the company's accounts to the standards.

The standards change how the numbers are built, not just how they are presented. The revenue under Ind AS 115, the leases under Ind AS 116, the financial instruments under Ind AS 109 and Ind AS 107, the impairment of the assets — each restates a position the company used to report differently, and each has a first-time adoption choice under Ind AS 101 that decides the opening balance sheet. The conversion is where the company's reported economics are rebuilt.

The cost of a mishandled conversion is the restatement and the audit finding: the first-time adoption exemptions applied wrongly, the revenue or the lease position mis-stated, the reconciliations between the previous GAAP and the Ind AS figures that do not work — each a correction that surfaces in the auditors' report and the regulator's questions.

This service is for companies transitioning to Ind AS or reporting under IFRS. We assess the applicability under the Companies (Indian Accounting Standards) Rules 2015, map the differences from the previous GAAP, apply the Ind AS 101 first-time adoption choices, prepare the transition balances and the reconciliations, and support the audit and the ongoing compliance under the standards.

How It Works

  1. 1

    Applicability Assessment

    We assess the company's Ind AS applicability under the Rules.

    Harun Raaj & Associates does this3-5 days
  2. 2

    GAAP Difference Mapping

    We map the differences between the previous GAAP and the Ind AS positions.

    Harun Raaj & Associates does this1-2 weeks
  3. 3

    First-Time Adoption

    We apply the Ind AS 101 exemptions and the mandatory exceptions.

    Harun Raaj & Associates does this2-4 weeks
  4. 4

    Transition Balances & Reconciliations

    We prepare the opening balances and the reconciliations for the first Ind AS reporting.

    Harun Raaj & Associates does this2-4 weeks
  5. 5

    Audit & Ongoing Support

    We support the audit and the ongoing compliance under the standards.

    Harun Raaj & Associates does thisOngoing

Frequently Asked Questions

Which companies in India are currently required to mandatorily apply Ind AS, and from when?
Mandatory Ind AS applicability is governed by the Companies (Indian Accounting Standards) Rules 2015, as amended. Phase I (from April 1, 2016) covered listed companies and unlisted companies with net worth exceeding ₹500 crore. Phase II (from April 1, 2017) covered all remaining listed companies and unlisted companies with net worth exceeding ₹250 crore. Banking companies apply Ind AS as notified by the RBI in its separate circular. Once a company crosses the net worth threshold, it must apply Ind AS even if it subsequently falls below. NBFCs with net worth above ₹500 crore were brought in from April 1, 2018 vide MCA notification G.S.R. 365(E).
What are the key differences between Ind AS 115 and the old AS 9 on revenue recognition that affect our SaaS subscription contracts?
Ind AS 115 (Revenue from Contracts with Customers), which replaced AS 9, requires a five-step model: identify the contract, identify performance obligations, determine transaction price, allocate the price to obligations, and recognise revenue when (or as) each obligation is satisfied. For SaaS subscriptions, the performance obligation is typically satisfied over time under Ind AS 115.35(a) because the customer simultaneously receives and consumes the benefit. Under the old AS 9, SaaS revenue was often recognised on a straight-line basis by convention rather than by a rigorous framework. Ind AS 115 also requires separate identification of set-up fees, customisation, and support as distinct performance obligations, potentially deferring revenue that was previously front-loaded. Disclosures under Ind AS 115.114–129 are significantly more granular than under AS 9.
How does Ind AS 116 (Leases) change the way we account for our office lease, and what are the balance sheet implications?
Under Ind AS 116, which replaced AS 19, lessees are required to recognise a right-of-use (ROU) asset and a corresponding lease liability for virtually all leases with a term exceeding 12 months, unless the underlying asset is of low value (defined as below approximately USD 5,000 when new, per IASB guidance applied under Ind AS 116.5). The ROU asset is depreciated under Ind AS 16 on a straight-line basis and the lease liability is unwound using the effective interest method under Ind AS 109. This means your office lease, previously shown only as an operating lease expense in the P&L, will now gross up both sides of your balance sheet, increasing reported debt and EBITDA (since rent moves from operating expense to depreciation + interest). This affects banking covenants referencing net worth or debt-equity ratios, and lenders must be engaged ahead of transition.
We are transitioning from IGAAP to Ind AS for the first time — what is the opening balance sheet date and how are prior periods handled?
First-time adoption of Ind AS is governed by Ind AS 101 (First-time Adoption of Indian Accounting Standards). The date of transition is the beginning of the earliest comparative period presented; for example, if your first Ind AS financial statements are for FY 2024-25 with one year of comparatives, the transition date is April 1, 2023. You must prepare an opening Ind AS balance sheet as at that date. Retrospective application of all Ind AS is required except where Ind AS 101 provides mandatory exceptions (such as hedge accounting under Ind AS 109) or optional exemptions (such as deemed cost for PPE under Ind AS 101.D7, which many companies elect to avoid full retrospective revaluation). Reconciliations between previous GAAP equity and total comprehensive income to Ind AS equivalents must be disclosed in the notes under Ind AS 101.24–25.
If our Indian subsidiary prepares Ind AS financials, can we use them directly for group IFRS consolidation at the parent level?
Ind AS is substantially converged with IFRS as issued by the IASB, but there are carve-outs and deferments that create differences. Key differences include: Ind AS 101 allows the deemed cost exemption with a different reference date than IFRS 1; Ind AS 109 retains certain carve-outs from IAS 39 for macro-hedge accounting; and Ind AS 7 differs in classification of interest paid and received. For group IFRS consolidation, the parent's auditors will typically require a GAAP reconciliation or a separate IFRS conversion pack. We recommend maintaining a standing IFRS bridge document noting the Ind AS-to-IFRS adjustments specific to your subsidiary, which reduces audit time and group reporting lags. The bridging adjustments should be documented under IAS 8.28 as accounting policy changes in the IFRS group pack.

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