First Ind AS financial statements are the first and only financial statements in which the entity adopts Ind ASs as per the Ind ASs notified in the Companies Act 2013 and makes an explicit and unreserved statement in those financial statements of compliance with Ind ASs.
It should be noted that the entire set of standards notified by the Ministry of Corporate Affairs should be complied with by the entity without any exception for any standard.
Opening Ind AS balance sheet:
An entity should prepare opening Ind AS balance sheet at the date of transition to Ind AS. This becomes the starting point for its accounting as per the Ind ASs.
Roadmap – Phase I
- 1st April 2015 or thereafter: Voluntary Basis for all companies
- 1st April 2016: Mandatory Basis
- Companies listed on Stock Exchange having net worth equal to or more than Rs.500 Crore
- Unlisted Companies having net worth equal to more than Rs.500 Crore
- Parent, Subsidiary, Associate and Joint Venture of above
Roadmap – Phase II
Phase II 1st April 2017 (Mandatory Basis)
1st April 2017 (Mandatory Basis)
- Parent, Subsidiary, Associate and JV of above
- Unlisted Companies having net worth equal to or more than Rs.250 Crore up to Rs.500 Crore
- All Listed Companies not covered in Phase I
- Other companies will continue to follow existing ASRoadmap for banks, NBFCs and insurance companies still to be decided
- Banks, Insurance Companies, MBFC’s, RRB’s not yet covered in Phase I and Phase II. Roadmap is notified subsequently
Requirements of an entity applying Ind AS for the first time
- The end of entity A’s first Ind AS reporting period is 31 March 2017 (For companies covered under Phase 1).
- Entity A decides to present comparative information in those financial statements for one year only.
- Its date of transition to Ind ASs is the beginning of business on 1 April 2015 (or, equivalently, close of business on 31 March 2015).
- Entity A presented financial statements in accordance with its AS (previous GAAP) annually to 31 March each March 2016.year up to, and including, 31
Entity A is required to apply the Ind ASs effective for periods ending on 31 March 2017 in preparing & presenting:
1. Its opening Ind AS balance sheet at 1 April 2015.
2. Balance sheet for 31 March 2017 (comparative for YE 31 March 2016).
3. Statement of profit and loss.
4. Statement of changes in equity.
5. Statement of cash flows for the year to 31 March 2017 (comparative for YE 31 March 2016).
6. Disclosures (including comparative information for YE 31 March 2016).
First Ind AS financial statements
An entity’s first Ind AS financial statements shall include at least
1. Three Balance Sheets
2. Two Statements of profit and loss
3. Two Statements of cash flows and
4. Two Statements of changes in equity and
5. Related notes
6. Includes comparative information for all statements presented
Non Ind AS info and historical summaries
- Historical summaries are sometimes presented for prior periods before the first period for which they present full comparative information in accordance with Ind ASs.
- Such summaries need not comply with the recognition and measurement requirements of Ind ASs.
Non-Ind AS comparative information
- Some entities present comparative information in accordance with previous GAAP as well as the comparative information required by Ind AS 1.
- In any financial statements containing historical summaries or comparative info as per previous GAAP, an entity shall:
- label the previous GAAP information prominently as not being prepared as per Ind ASs and
- disclose the nature of the main adjustments that would make it comply with Ind ASs.
- An entity need not quantify those adjustments.
Explanation & reconciliations
- An entity shall explain how the transition from previous GAAP to Ind ASs affected its reported Balance sheet, financial performance and cash flows.
- An entity’s first Ind AS financial statements shall include:
a) reconciliations of its equity as per previous GAAP to its equity as per Ind ASs for both of the following dates:
i. the date of transition to Ind ASs.
ii. the end of the latest period presented in the entity’s most recent annual financial statements in accordance with previous GAAP.
- A reconciliation to its total comprehensive income as per Ind ASs for the latest period in the entity’s most recent annual financial statements.
- The starting point for that reconciliation shall be total comprehensive income as per previous GAAP for the same period or, if an entity did not report such a total, profit or loss under previous GAAP.
- The reconciliations shall give sufficient detail about material adjustments to the Balance Sheet and Statement of profit and loss.
- If an entity presented a Statement of cash flows under its previous GAAP, it shall also explain the material adjustments to the Statement of cash flows.
- If an entity becomes aware of errors made under previous GAAP, it shall distinguish the correction of those errors from changes in accounting policies.
Please enrol me for the free email course
on Basics of Accounting for Financial Instruments
Join our mailing list to receive the latest news and updates from our team.