The corporate affairs ministry will unveil a road map next week for implementing the new Indian Accounting Standards. The blueprint will prescribe the class of companies that will be required to follow the new standards and the timelines within which they will need to adopt them.
The new Indian Accounting Standards (Ind-AS), which will be converged with the International Financial Reporting Standards (IFRS), are likely to initially apply to all listed and unlisted companies that have a net worth of Rs. 500 crore or more and their holding, subsidiary, joint venture or associate companies.
The earlier road map released by MCA (ministry of corporate affairs) in 2011 could not be applied due to changes in the Companies Act and various other reasons. MCA are now in the process of revising the standards and will subsequently notify them by the end of December 2014. The Institute of Chartered Accountants of India ( ICAI) is working on these drafts, some of which have already been released for public comments. These drafts include the one on financial instruments, which addresses the loan loss recognition problem that banks and financial institutions in developed countries faced during the 2008 global financial crisis. The drafts will be presented to the National Advisory Council on Accounting Standards by the end of this month, which will then make recommendations to the MCA for notifying these standards.
Companies that will have to prepare their accounts as per the new norms will also be required to give last year comparative as per Ind-AS. Companies have to voluntarily follow the new Ind-AS from the next fiscal and it will be mandatory from 2016–17.