Ind AS Applicability explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Indian Accounting Standards (Ind AS) apply on a phased basis set by the MCA. Listed companies and unlisted companies crossing prescribed net worth thresholds — along with their group companies — must adopt Ind AS, with banks, insurers and NBFCs following separate roadmaps.
Overview
The Ministry of Corporate Affairs notified the Companies (Indian Accounting Standards) Rules, 2015, prescribing a staggered roadmap for adopting Ind AS. Rather than a single switchover, the framework brings companies in by net worth and listing status, so that larger and listed entities transitioned first. Once a company is covered, its holding, subsidiary, associate and joint venture companies are also required to comply.
Legal Basis
Ind AS is issued under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules, 2015. Net worth for the roadmap is measured under the Companies Act definition, based on standalone audited financial statements as at 31 March 2014 (or the first audited period thereafter).
The Corporate Roadmap (Phases)
| Phase | From FY | Who is covered |
|---|---|---|
| Voluntary | 2015-16 | Any company opting in (irreversible) |
| Phase I | 2016-17 | Listed/unlisted with net worth ≥ ₹500 crore + group cos |
| Phase II | 2017-18 | All remaining listed + unlisted with net worth ≥ ₹250 crore + group cos |
Companies on a stock exchange in the process of listing were treated as listed for these purposes. Once triggered, a company must continue with Ind AS even if its net worth later falls below the threshold.
Separate Roadmap for Financial Sector
Banks, insurance companies and NBFCs were kept outside the corporate roadmap. NBFCs adopted Ind AS in two phases from FY 2018-19 (net worth ≥ ₹500 crore) and FY 2019-20 (other listed NBFCs and those with net worth ≥ ₹250 crore). Implementation timelines for banks and insurers have been driven by the RBI and IRDAI respectively.
Worked Example
Suppose an unlisted company had a net worth of ₹300 crore as at 31 March 2017. It does not fall in Phase I (₹500 crore) but is caught by Phase II from FY 2017-18, because its net worth is ₹250 crore or more but below ₹500 crore. Its wholly owned subsidiary with a net worth of only ₹40 crore is also required to prepare Ind AS financial statements, because it is a group company of a covered entity.
Transition Considerations
First-time adopters apply Ind AS 101, preparing an opening Ind AS balance sheet at the transition date and restating comparatives. The decision, once made, is irreversible — a company cannot revert to the earlier Accounting Standards. Group companies must align policies so consolidated statements are internally consistent.