ITFG clarifications 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.
The second group of ITFG answers on Ind AS 101 covers the transition relief for long-term foreign currency items (paragraph D13AA), the deemed cost election for investments in subsidiaries (paragraphs D14 and D15), toll-road concessions (paragraph D22) and the treatment of past business combinations (Appendix C). This digest restates each answer in our own words and says whether the paragraph relied on still reads the same.
ITFG clarifications are the views of ICAI's Ind AS Technical Facilitation Group as on the date of each bulletin; they are not standards. Paragraph D13AA is transition history: it lets a first-time adopter continue its earlier policy only for long-term foreign currency monetary items already recognised before its first Ind AS reporting period, so it matters only to companies still carrying such balances. ITFG says the relief does not reach later loans, forward contracts or hedged swaps; an investment in a subsidiary taken at deemed cost stays at that amount; and past business combinations are restated all-or-nothing from a chosen date.
Ind AS as on 1 April 2025 (ICAI Compendium of Ind AS 2025-26, the standards notified under the Companies (Indian Accounting Standards) Rules, 2015). Amendments notified after 1 April 2025 are not reflected in this article and should be checked on mca.gov.in. Opening-balance-sheet reconciliations of this kind are part of financial statement preparation in the first Ind AS year.
How to read the table
Each issue is cited by bulletin and issue as printed at the end of the answer; the compendium numbers them differently. D13AA and the AS 11 option it refers to apply only to items recognised before the first Ind AS period, so for a company already on Ind AS these answers are history; the paragraphs on investments and past combinations are of wider interest. See our guides to Ind AS 101 and to first-time adoption with exemptions and reconciliations, and part 1 of this digest on date of transition and deemed cost.
Digest: long-term foreign currency monetary items (D13AA)
| Situation | ITFG's view | Reference | Paragraph relied on; still the same? |
|---|---|---|---|
| Can the old AS 11 treatment continue for long-term forward exchange contracts? | No. D13AA covers translation of monetary items only; forward contracts are derivatives under Ind AS 109 | ITFG Clarification Bulletin 7, Issue 4 | Ind AS 101, D13AA; Ind AS 21, paragraphs 3-4: reads the same |
| Functional currency turns out to be the currency of the loan | The loans are no longer foreign currency monetary items under Ind AS, so the relief is lost | Bulletin 1, Issue 4 | D13AA: reads the same |
| A facility partly drawn before the first Ind AS period and partly after | Relief covers the amounts recognised before; later drawings are outside it | Bulletin 7, Issue 1; Bulletin 1, Issue 3 | D13AA: reads the same |
| A swap hedging a loan whose exchange differences go to the asset cost under D13AA | No hedge accounting for that item; the swap is carried at fair value in profit or loss | Bulletin 3, Issue 10 | D13AA; Ind AS 109, paragraph 6.1.1: reads the same |
| Deferred exchange difference balance where an upfront fee was charged off earlier | Restate the balance on the amortised cost of the loan unless it is designated at fair value through profit or loss | Bulletin 2, Issue 6 | D13AA; Ind AS 109, paragraph 4.2.1: reads the same |
| Continued amortisation of the deferred balance | May continue; the amortisation goes through profit or loss, not other comprehensive income | Bulletin 2, Issue 1 | D13AA: reads the same |
| Exchange differences that Ind AS 23 would treat as a borrowing cost adjustment | The earlier policy continues for them; paragraph 6(e) of Ind AS 23 is not applied to that part | Bulletin 18, Issue 1 | D13AA; Ind AS 23, paragraph 6(e): reads the same |
Digest: investments in subsidiaries, service concessions and past combinations
| Situation | ITFG's view | Reference | Paragraph relied on; still the same? |
|---|---|---|---|
| Loan to a subsidiary carrying no interest, with the investment at previous GAAP carrying amount as deemed cost | The gap between the loan's old carrying amount and its present value is added to the investment | Bulletin 10, Issue 1 | Ind AS 101, paragraphs 10, D14, D15: reads the same |
| Investment taken at deemed cost at transition: what at the first reporting date? | The same amount, since the cost policy continues; later investments in that category follow Ind AS 27 | Bulletin 11, Issue 4 | Paragraphs 7, D15; Ind AS 27, paragraph 10: reads the same |
| Debentures of a subsidiary and the D15 exemption | Equity from the issuer's view counts as an investment; otherwise they are financial assets under Ind AS 109 | Bulletin 7, Issue 8 | D15; Ind AS 27, paragraph 10: reads the same |
| Toll road still under construction at transition | D22 relief is not available: the asset was not yet recognised or amortised | Bulletin 7, Issue 9 | D22; Ind AS 38, paragraph 7AA: relief reads the same; D22 now refers to Appendix D of Ind AS 115 instead of Ind AS 11 |
| Non-controlling interests with accumulated losses from before transition | If past combinations are not restated, attribution of losses applies from the date of transition; if restated, from the restatement date, with non-controlling interests following the restated assets | Bulletin 8, Issue 6 | Paragraphs B7, C1, C4: reads the same |
| Amalgamation on the date of transition where the parties are under common control | If the exemption in C1 was not taken, Appendix C of Ind AS 103 applies retrospectively; common control must be evaluated under Ind AS 110 | Bulletin 15, Issue 6 | Paragraph C1; Ind AS 103, Appendix C: reads the same |
| Court scheme treatment of an old amalgamation and a wish to restate | A scheme's required treatment prevails; restating an earlier combination needs a legal check that the scheme allows it | Bulletin 18, Issue 4 | Paragraph C1: reads the same |
Issues left out
None of the compendium's issues 39 to 51 is left out as superseded. The D13AA issues (39 to 45) are kept as transition history only.
Three answers in prose
Items recognised before the first period (Bulletins 1 and 7). D13AA speaks of exchange differences on long-term foreign currency monetary items recognised in the statements for the period ending immediately before the first Ind AS period. ITFG reads it literally: a loan drawn after that date is not covered, and a loan that stops being a foreign currency monetary item because the functional currency changed is not covered either.
Investments at deemed cost (Bulletins 10 and 11). D15 lets a first-time adopter take each investment in a subsidiary, joint venture or associate at deemed cost, either fair value at transition or the previous GAAP carrying amount, but only if it measures the investments at cost under Ind AS 27. ITFG concludes that the amount then stays, and that a related loan restated to present value feeds back into the investment under paragraph 10.
Past combinations (Bulletins 8 and 18). Paragraph C1 makes restatement all-or-nothing from the chosen date, with Ind AS 110 applied from the same date, so the attribution of losses to non-controlling interests follows that choice. A court-approved scheme can restrict what may be restated.
What a finance team should take from this
- If a legacy foreign currency balance still sits on the earlier policy, record which items qualified, the amortisation period and the hedges, since the swap answer removes hedge accounting.
- Decide the investment policy (cost or Ind AS 109) before electing deemed cost.
- Keep a file showing the restatement date chosen for past combinations and the legal check for any court scheme.
Need help with Ind AS 101 reconciliations?
If a transition, an old restatement or a subsidiary's separate accounts need reconciling, our team can prepare the working file through financial statement preparation.
Key takeaways
- D13AA is a relic for items recognised before the first Ind AS period; it excludes later loans, forward contracts and hedged swaps.
- Investments at deemed cost stay at that amount and carry the cost policy forward.
- Toll-road relief needs the intangible asset to be recognised and amortising before transition.
- Past combinations are restated all-or-nothing, and court schemes may limit restatement.
- Compare the common-control rules in Appendix C of Ind AS 103.
Read next
- ITFG clarifications on Ind AS 101 (part 1): date of transition and deemed cost
- First-time adoption under Ind AS 101
- Common control business combinations under Appendix C of Ind AS 103
- Ind AS 101: first-time adoption of Ind AS
Disclaimer: Based on the Indian Accounting Standards as on 1 April 2025 (ICAI Compendium of Ind AS 2025-26, the standards notified under the Companies (Indian Accounting Standards) Rules, 2015) and, where named, the ITFG clarification bulletins of ICAI, as consulted on 4 October 2026. Amendments notified after 1 April 2025 should be checked on mca.gov.in. This article is general information, not legal advice; check the official text before acting.