The National Advisory Committee on Accounting Standards (NACAS) on Wednesday decided to go in for further industry consultations to decide whether adoption of a key new revenue standard needed to be pushed back or not.
This new revenue standard—Ind AS 115—is slated to be implemented from April 1 next year and could radically change the way revenue is recognised in several industries such as telecom and software.
This new revenue standard has a big bearing on financial reporting by Corporate India.
Indian standard setters are debating whether this effective date needed to be deferred in the wake of the International Accounting Standards Board (IASB) putting off the implementation of IFRS 15 (equivalent of Ind AS 115) by one year to January 1, 2018.
“We have now decided to write to all the three apex industry chambers—FICCI, CII and Assocham—seeking their views on the matter (whether Ind AS 115 need to be deferred or not)”, Amarjit Chopra, Chairman, NACAS told Business Line here.
NACAS is likely to meet this month end to discuss the response from the apex industry chambers.
At today’s NACAS meeting, the CA Institute had left it to the NACAS to take a call on the issue. It is widely perceived that the CA Institute is keen on avoiding any deferral of the Ind AS 115.
“The Central council (CA Institute) had not given any view on this matter. It has left it to NACAS”, Chopra said.
Later, CA Institute President Manoj Fadnis said that it would be better to take a call on this issue only after industry understood the advantages or disadvantages of adopting the new revenue standard Ind AS 115.
“To us, IFRS 15 is a superior standard. However, if industry feels implementation will be difficult, then it should be ready to adopt a different standard Ind AS 18 and Ind AS 11 for few years before moving to Ind AS 115. Our effort is to develop more consensus with industry”, Fadnis told Business Line.
Charanjit Attra, Partner, S.R.Batliboi & Associates LLP, said that the views of industry need to be heard before any decision is taken on this crucial issue. The impact of any deferral of Ind AS 115 on other Ind AS standards should also be considered, Attra said.
Pankaj Chadha, Partner in a member firm of EY, said that IASB’s decision to defer implementation with an option for early adoption would be most suited (for India). This would permit Indian companies to fully absorb the changes that this standard entails, he added.