as vs ind as (old vs new indian accounting standards)

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Indian Accounting Std (old) vs IND AS (New)


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Overview of Significant Differences between IND AS and

Current Indian GAAP


TOPICS COVERED

Differences with respect to:

• Conceptual Accounting Framework• Accounting Differences• Carve Outs


ACCOUNTING FRAMEWORK

Historical cost

IFRS: Historical cost, but intangible assets, property plant and equipment (PPE) and

investment property may be revalued. Derivatives, biological assets and most securities must be revalued.

Indian GAAP:Historical cost, but fixed assets, other than intangibles, may be revalued.


ACCOUNTING FRAMEWORK

First-time adoption of accounting frameworks

IFRS: Full retrospective application with some optional exemptions.

Indian GAAP: particular standards specify the transitional treatment upon the first-time

application of those standards


LIST OF IND AS, IFRS AND AS

Ind AS IFRS AS

Ind AS 1 Presentation of Financial Statements

IAS 1 Presentation of Financial Statements

AS 1 Disclosures of Accounting Principles and Policies

Ind AS 2 Inventories

IAS 2 Inventories AS 2 Valuation of Inventories

Ind AS 7 Statement of Cash Flows

IAS 7 Statement of Cash Flows

AS 3 Cash Flow Statements

Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors

IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

AS 4 Contingencies and Events occurring after Balance Sheet Date

Ind AS 10 Events after the Reporting PeriodInd AS 10 Appendix A

IAS 10 Events after the Reporting PeriodIFRIC 17 Distribution of Non-cash Assets to owners

AS 5 Net Profit or Loss for the period, Prior Items and Changes in Accounting Policies

Ind AS 11 Construction ContractsInd AS 11 Appendix A (deferred)Ind AS 11 Appendix B (deferred)

IAS 11 Construction ContractsIFRIC 12 Service Concession ArngmtSIC 29 Disclosure – Service Concession Arrangements

AS 7 Construction Contracts

Ind AS 12 Income TaxesInd AS 12 Appendix A

Ind AS 12 Appendix B

IAS 12 Income TaxesSIC 21 Income Taxes – Recovery of Revalued Non-Depreciable AssetsSIC 25 Income Taxes – Changes in the Tax Status of an Enterprise or its Shareholders

AS 22 Accounting for Taxes on Income

Ind AS 16 Property, Plant and Equipment

IAS 16 Property, Plant and Equipment

AS 10 Accounting for Fixed AssetsAS 6 Depreciation Accounting

Ind AS 16 Appendix A

IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities

Ind AS 17 LeasesInd AS 17 Appendix A


Ind AS 17 Appendix C (Deferred)

IAS 17 LeasesSIC 15 Operating Leases – IncentivesSIC 27 Evaluating the Substance of Transaction involving the Legal Form of a LeaseIFRIC 4 Determining Whether an Arrangement contains a Lease

AS 19 Leases

Ind AS 18 RevenueInd AS 18 Appendix A


Ind AS 18 Appendix C

IAS 18 RevenueSIC 31 Revenue – Barter Transactions Involving AdvertisingIFRIC 13 Customer Loyalty ProgrammesIFRIC 18 Transfer of Assets from Customers

AS 9 Revenue Recognition

Ind AS 19 Employee BenefitsInd AS 19 Appendix A

Ind AS 19 Employee BenefitsInd AS 19 Appendix A

AS 15 Employee Benefits

Ind AS 20 Accounting For Government Grants and Disclosure of Government AssistanceAppendix A Government Assistance – No Specific Relation in Operating Activities

Ind AS 20 Accounting For Government Grants and Disclosure of Government AssistanceAppendix A Government Assistance – No Specific Relation in Operating Activities

AS 12 Accounting for Government Grants

Ind AS 21 The Effects of Changes in Foreign Exchange Rates

Ind AS 21 The Effects of Changes in Foreign Exchange Rates

AS 11 The Effects of Changes in Foreign Exchange Rates

Ind AS 23 Borrowing Costs

Ind AS 23 Borrowing Costs

AS 16 Borrowing Costs

Ind AS 24 Related Party Disclosure

IAS 24 Related Party Disclosure

AS 18 Related Party Disclosures

No Near Final Draft

IAS 26 Accounting and Reporting by Reporting by Retirement Benefits Plans

No standard

Ind AS 27 / IFRS 10 Consolidated and Separated Financial Statements Ind AS 27 Appendix A

IAS 27 Consolidated Separated and Financial Statements

SIC 12 Consolidation – Special Purpose Entities

AS 21 Consolidated Financial Statements

Ind AS 28 Investment in Associates

IAS 28 Investment in Associates

AS 23 Accounting for Investments in Associates in Consolidated Financial Statements

Ind AS 29 Financial Reporting in Hyperinflationary EconomiesInd AS 29 Appendix A

IAS 29 Financial Reporting in Hyperinflationary Economies

IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies

No standard

Ind AS 31 Interest in Joint Ventures / IFRS 11Ind AS 31 Appendix A

IAS 31 Interest in Joint Ventures

SIC 13 Jointly Controlled Entities – Non-Monetary Contributions by Venturers

AS 27 Financial Reporting of Interests in Joint Ventures

Ind AS 32 Financial Instruments: PresentationInd AS 32 Appendix B

IAS 32 Financial Instruments: Presentation

AS 31 Financial Instruments : Presentation

Ind AS 33 Earning Per Share

IAS 33 Earning Per Share AS 20 Earnings per Share

Ind AS 34 Interim Financial ReportingInd AS 34 Appendix A

IAS 34 Interim Financial Reporting

IFRIC 10 Interim Financial Reporting and Impairment.

AS 25 Interim Financial Reporting

Ind AS 36 Impairment Of Assets

IAS 36 Impairment Of Assets

AS 28 Impairment of Assets

Ind AS 38 Intangible AssetsInd As 38 Appendix A

IAS 38 Intangible Assets

SIC 32 Intangible Assets – Website Costs

AS 26 Intangible Assets

Ind AS 37 Provisions, Contingent Liabilities and Contingent AssetsInd AS 37 Appendix A


IAS 37 Provisions, Contingent Liabilities and Contingent Assets

IFRIC 5 Rights to Interest Arising from Decommissioning, Restoration and Environmental Rehabilitation FundsIFRIC 6 Liabilities Arising from Participating in a Specific Market – Waste Electrical and Electronic Equipment

AS 29 Provisions, Contingent Liabilities and Contingent Assets

Ind AS 39 Financial Instruments : Recognition and MeasurementInd AsS39 Appendix C

Ind AS 39 Appendix D

Ind AS 39 Appendix E

IAS 39 Financial Instruments : Recognition and Measurement

IFRIC 9 Reassessment of Embedded DerivativesIFRIC 16 Hedges of a net Investment in Foreign OperationIFRIC 19 Extinguishing Financial liabilities with Equity instruments

AS 30 Financial Instruments : Recognition and Measurement

Ind AS 40 Investment Property

IAS 40 Investment Property

No standard

No near Final Draft IAS 41 Agriculture No standard

Ind AS 101 First Time Adoption of Indian Accounting Standards

IFRS 1 First Time Adoption of International Financial Reporting Standards

No standard

Ind AS 102 Share Based Payment

IFRS 2 Share Based Payment

No standard

Ind AS 103 Business Combination

IFRS 3 Business Combination

No standard

Ind AS 39 Insurance Contracts

IFRS 4 Insurance Contracts

No standard

Ind AS 105 Non-Current Assets Held for Sale and Discontinuing operations

IFRS 5 Non-Current Assets Held for Sale and Discontinuing operations

No standard

Ind AS 106 Exploration for and Evaluation of Mineral Resources

IFRS 6 Exploration for and Evaluation of Mineral Resources

No standard

Ind AS 107 Financial Instruments : Disclosures

IFRS 7 Financial Instruments : Disclosures

No standard

Ind AS 108 Operating Segments

IFRS 8 Operating Segments

No standard

Not covered in Ind AS It was earlier covered in Exposure Draft

IFRIC 2 Members’ Share in Co-operative Entities and Similar Instruments

No standard

Not covered in Ind ASNot Relevant in India

SIC 7 Introduction of Euro

No standard


Major Carve Outs

• Revenue Recognition (IND AS 18)– IFRIC 15 – Agreement for construction of real estate has

not been adopted


Major Carve Outs

• Effects of changes in Foreign Exchange Rates (IND AS 21)– Option to recognise exchange differences on translation of

long term monetary items in equity


Major Carve Outs

• Related Party Disclosures (IND AS 24)– Overriding nature of statue– Definition of relative as per Co.s Act


Major Carve Outs

• Business Combinations (IND AS 103) – Recognition of gain on day one accounting for a business

combination in capital reserve as opposed to income statement under IFRS 3

– Guidance on Common Control Transactions


Major Carve Outs

• Employee Benefits (IND AS 19)– Government bond rate as discount rate– Recognition of acturial gains and losses – Other long term

employee benefits – only in OCI and not P&L or P&L amort

– Frequency of Acturial Valuation


Major Carve Outs

• Financial Instruments – Rec and Msrmt (IND AS 39)– Change in fair value of a financial liability due to entitiy’s

own credit risk.


Major Carve Outs

• Investment in Associates (IND AS 28)– Different accounting periods and policies of associates


Major Carve Outs

• Investment Property (IND AS 40)– Only Cost Model


Major Carve Outs

• EPS (IND AS 33)– Both Standalone and CFS


Major Carve Outs

• Govt Grants (IND AS 20)– Non-monetary government grants only at fair value and not at nominal

value


IND AS 2 VS AS 2Inventories


IND-AS 2 - Inventories

Fair value of purchases


Timing of recognition of purchases



Cost of inventories of a service provider



IND AS 8 VS AS 5Changes in Accounting Policies, Estimates, Prior Period Itesm


IND AS 8 - Acc pol., changes in acc est., errors

Changes in accounting policies


Changes in method of depreciation



Prior period items - errors or omissions arising from a failure to use or

misuse of reliable information- Retro



extraordinary items



IND AS 10 VS AS 4Events after Balance Sheet Date


• Proposed dividend

IND AS 10 - Events after reporting date


IND AS 11 VS AS 7Construction Contracts


IND AS 11 - Construction Contracts

Service Concession Arrangements (Ex)


Ex – Service Concession Agrmt.

• A incurs cost of INR 1,000,000 for construction of a road.

• In consideration, A receives a right to charge toll of INR 30 on each vehicle plying on that road for 30 years


Construction Contracts

Agreements for construction of real estate


IND AS 18 VS AS 9Revenue Recognition


IND AS 18 – Revenue Recognition

Multiple element arrangements (Ex)


Example• A sells a machine with a two year

maintenance service for INR 1,000,000 to a customer.

• A two year maintenance service is provided to other customers at a consideration of INR 200,000.



Linked transactions

Examples – Loan origination fees charged by banks



Customer loyalty programmes



Extended credit



Barter transactions

• Recognition of transactions that were previously not recognised (for example, certain advertising barter transactions);

• Non-recognition of transactions that are currently being recognised (for example, certain oil barter transactions).



• Percentage Completion



IND AS 27/28/31/103 VS AS 14/21/23/27

Business Combination and Consolidations


Business Combination / Consolidation

Definition of Control– Substance over form– Temporary– SPE



Contingent Consideration / Acq Date



• Goodwill – Fair Value of assets & liabilities acquired– Amortisation



• Minority– Fair Value– Negative



Uniform Accounting Policy & Time Gaap



Proportionate Consolidation



Step up and Step down


IND AS 16 VS AS 10Property, Plant & Equipment


IND AS 16 –Property, Plant & Eqpmt

• Overhead allocation

• Component approach


Site Restoration



• Revaluation of assets• Depreciation on the same



• Cash Price Equivalent



• Residual Value and Useful life



IND AS 23 VS AS 16Borrowing Costs


IND AS 23 - Borrowing Costs (BC)

No period as 12 months


IND AS 23 - Borrowing Costs (BC)

Consolidation :-– Special case of capitalisation of BC – Group Average borrowing rate


IND AS 7 VS AS 3Cash Flow Statement


IND AS 7 - Cash Flow

• Undistributed profits of associates and non-controlling interests’ under operating activities.


• Ind AS 7 requires to report the aggregate amount of the cash paid or received as consideration for obtaining or losing control

IND AS 7 - Cash Flow


IND AS 12 VS AS 22Deferred Tax


IND AS 12

Balance sheet approach (Ex)


IND AS 12

Examples– on revaluation of PPE; – indexation benefits for freehold land and

investments; – fair value changes for available for sale securities;


IND AS 12

Deferred Taxes arising in consolidation


IND AS 12

Reconciliation of current tax as per actual basis and as per applicable statutory rate


IND AS 17 VS AS 19Leases


IND AS 17 - Lease

Embedded leases (Ex)


Ex of an Embedded Lease

• A enters in a purchase contract with B to purchase 1,000 units of product every month at INR 25 per unit.

• Product can only be manufactured on a specific machine owned by B.

• In case of any shortfall in procurement, A will compensate B at the rate of INR 25 per unit of shortfall.

• The entire output from machine is availed by A.


Leases of land

IND AS 17 - Lease


• Lease incentives– Initial rent free period ?

IND AS 17 - Lease


• Lease deposits

IND AS 17 - Lease


IND AS 19 VS AS 15Employee Benefits


IND AS 19 - Employee Benefits

• Actuarial gains and losses in OCI– defined benefit plans and other long term

employment benefit plans.


IND AS 21 VS AS 11Foreign Exchange


IND AS 21 – Foreign Exchange

• Functional Currency vs Domicile Currency



• Permits FE diff on long term monetary items to be posted to equity. The accumulated diff can be transferred to P/L over the term of such item



• Existing AS 11 permits capitalisation / deferral of Fe Gain/Loss arising from long term monetary items


IND AS 20 VS AS 12Government Grants


IND AS 20 – Govt Grants

• No credit to Reserves• No credit to PPE• Concessional Loans• Non-Monetary Grants


IND AS 24 VS AS 18Related Party


IND AS 18 – Related Party

• Defines close members of family• KMP of parents• Non-executive directors• Group companies


IND AS 33 VS AS 20Earning Per Share


IND AS 33 – EPS

• Amounts debited to Share Premium• Compulsory convertible instruments• Shares held by Trust


Share Based Payments

• Fair Value Model• Grants to employees of Parent• Shares Held in Trust


• Intangibles – Life – Finite or Indefinite• Investment Property – Classification• Financial Instruments• Segments• Provisions• Impairments


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as vs ind as (old vs new indian accounting standards)

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