The Centre will notify the adoption of the proposed Indian Accounting Standards (Ind AS), the converged Indian version of the International Financial Reporting Standards (IFRS), by March.
Ind AS will come into effect for the first time in 2016-17. Listed companies with a net worth of over ₹500 crore are mandated to follow Ind AS in the first year.
“The notification for Ind AS is going to happen within a month,” AS Bhatia, Joint Secretary to the Ministry of Corporate Affairs, told reporters here on Friday, on the sidelines of a CII-organised event.
According to the rollout roadmap, in the second year, Ind AS will be applicable to all listed companies and unlisted companies having a net worth of over ₹500 crore. The third year will see unlisted companies having a net worth of over ₹250 crore follow the new accounting standards.
India will join a growing number of nations, currently more than 100, in aligning accounting standards for cross-border acceptability and facilitation of two-way capital flow. In July 2014, the Finance Minister, in his Budget speech, proposed the adoption of the Ind AS standard by Indian companies voluntarily from FY 2015-16 and compulsorily from FY 2016-17.
In March 2014, the Institute of Chartered Accountants of India (ICAI) submitted to the Ministry of Corporate Affairs (MCA) a proposed new IFRS roadmap and convergence plan for India.
In the proposed roadmap, the ICAI recommended implementation of Ind AS by select companies only in preparation of their consolidated financial statements.
The convergence of Ind AS towards IFRS will broadly follow all elements except in two areas, foreign exchange and agriculture.
“Here, the standards have been tweaked to suit norms based on Indian realities,” said ICAI council member Abhijit Bandyopadhyay.
The Ministry will also announce a framework for internal financial controls to be followed by all companies in the next financial year. ICAI has put up a guidance note on the issue, on which the Centre is yet to respond.