| Extent of IFRS application | Status | Additional Information |
|---|---|---|
| IFRS Accounting Standards are required for domestic public companies | Indian Accounting Standards (Ind AS) are based on and substantially converged with IFRS Standards as issued by the Board. India has not adopted IFRS Standards for reporting by domestic companies and has not yet formally committed to adopting IFRS Standards. | |
| IFRS Accounting Standards are permitted but not required for domestic public companies | ||
| IFRS Accounting Standards are required or permitted for listings by foreign companies | No. | |
| The IFRS for SMEs Accounting Standard is required or permitted | No. | |
| The IFRS for SMEs Accounting Standard is under consideration | No. |
Profile last updated: 11 October 2019
RELEVANT JURISDICTIONAL AUTHORITY
The role of ICAI is recognised as a standard-setter under Indian law (section 133 of Companies Act, 2013):
“The Central Government prescribes the standards of accounting or any addendum thereto, as recommended by the ICAI, in consultation with and after examination of the recommendations made by the National Financial Reporting Authority (NFRA).”
The Ministry notifies the standards under the Companies Act by publishing them in The Gazette of India. Notified standards are authoritative under Indian law. For non-corporate entities, Accounting Standards are issued by the ICAI.
COMMITMENT TO GLOBAL FINANCIAL REPORTING STANDARDS
Yes.
The Preface to the ICAI’s Statements of Accounting Standards (revised in 2004) states:
2.3 The ICAI, being a full-fledged member of the International Federation of Accountants (IFAC), is expected, inter alia, to actively promote the International Accounting Standards Board’s (IASB) pronouncements in the country with a view to facilitate global harmonisation of accounting standards. Accordingly, while formulating the Accounting Standards, the [Indian Accounting Standards Board] will give due consideration to International Accounting Standards (IASs) issued by the International Accounting Standards Committee (predecessor body to IASB) or International Financial Reporting Standards (IFRSs) issued by the IASB, as the case may be, and try to integrate them, to the extent possible, in the light of the conditions and practices prevailing in India.
At the G20 summit held in Pittsburgh in 2009, the then Hon’ble Prime Minister of India made a commitment towards convergence with single set of high quality globally acceptable accounting standards (IFRS Standards). That commitment was reiterated in India’s Finance Minister’s budget message of July 2014:
128. There is an urgent need to converge the current Indian accounting standards with the International Financial Reporting Standards.
India issues Indian Accounting Standards (Ind AS) which are based on IFRS Standards. They contain certain carve-outs and carve-ins.
The modifications to IFRS Standards are explained later in this profile.
Voluntary adoption of Ind AS is permitted for all companies other than insurance companies, banking companies, and non-banking finance companies (NBFCs).
For companies, other than insurance companies, banking companies, and non-banking finance companies the mandatory adoption of Ind AS is as follows:
| Phase I | Phase II | |
|---|---|---|
| Mandatory adoption | FY 2016–17 | FY 2017–18 |
| (a) Listed companies | All companies listed or in the process of being listed with net worth >= INR 500 crore (US$ 72 million approx.) | All companies listed or in the process of being listed not covered in Phase I |
| (b) Unlisted companies | All companies with net worth >= INR 500 crore (US$ 72 million approx.) | Companies having a net worth >= INR 250 crore (US$ 36 million approx.) |
| (c) Group companies | Applicable to holding, subsidiaries, joint ventures, or associates of companies covered in (a) and (b) above | |
For NBFCs, the roadmap for implementation of Ind AS is as follows:
| Phase III | Phase IV | |
|---|---|---|
| Mandatory adoption | FY 2018–19 | FY 2019–20 |
| (a) Listed companies | All companies listed or in the process of being listed with net worth >= INR 500 crore (US$ 72 million approx.) | All companies listed or in the process of being listed not covered in Phase III |
| (b) Unlisted companies | All companies with net worth >= INR 500 crore (US$ 72 million approx.) | Companies having a net worth >= INR 250 crore (US$ 36 million approx.) |
| (c) Group companies | Applicable to holding, subsidiaries, joint ventures, or associates of companies covered in (a) and (b) above | |
The above tables indicate INR/ US$ exchange rate as on 01.04.2019
The roadmap is applicable to both, consolidated financial statements and separate financial statements.
For insurance companies and banks, Ind AS will be applicable from a future date.
None.
EXTENT OF IFRS APPLICATION
For DOMESTIC companies whose debt or equity securities trade in a public market in the jurisdiction:
IFRS Standards are not permitted or required. However, all domestic companies whose securities trade in a public market (except banking companies and insurance companies) are required to apply Ind AS while companies listed on SME Exchange are permitted to follow Ind AS. In case of banks and insurance companies Ind AS will be applicable at a future date.
IFRS Standards are not required. Ind AS are required for some (based on a net worth criteria) and permitted for others in this category.
Not applicable. Currently, Ind AS are required, if such an entity meets the specified criteria.
For FOREIGN companies whose debt or equity securities trade in a public market in the jurisdiction:
IFRS ENDORSEMENT
Yes, but unlikely due to differences between Ind AS and IFRS Standards.
The Central Government prescribes the standards of accounting or any addendum thereto, as recommended by the ICAI, in consultation with and after examination of the recommendations made by the National Financial Reporting Authority (NFRA). The Ministry notifies the Standards under the Companies Act, 2013 (section 133) by publishing them in The Gazette of India Notified standards are authoritative under Indian law. For non-corporate entities, Accounting Standards are issued by the ICAI.
The Central Government prescribes the standards of accounting or any addendum thereto, as recommended by the ICAI, in consultation with and after examination of the recommendations made by the National Financial Reporting Authority (NFRA). The Ministry notifies the standards under the Companies Act by publishing them in The Gazette of India. Notified standards are authoritative under Indian law.
Ind AS are modified versions of IFRS Standards as issued by the International Accounting Standards Board. Some modifications are so-called ‘carve-outs’ and ‘carve-ins’. Other changes include: the use of different terminology; the elimination of a few options; changes in certain disclosures; and other modifications to certain requirements of some IFRS Standards.
Some of these modifications are mandatory while others are optional.
Each individual Ind AS includes an appendix to highlight the ‘major differences, if any, between the Indian Accounting Standard (Ind AS) and the corresponding IFRS Standard’.
The major differences between Ind AS and IFRS Standards and the reasons for the differences are listed in the appendices of the respective Ind AS and in a document on the ICAI’s website.
