Table of Contents




After reading this post, you will get knowledge about the scope of Applicability of IND-AS and IND-AS 101. All Ind AS are applicable on Companies, Non Banking Financial Companies, Banks and Insurance.

In other words we can say that, All Ind AS are not applicable to Partnership Firms, Sole Traders, Trust, NGO’s, Association of Persons.

Section 8 of Indian Companies Act,2015 which deals with the Non for Profit companies are also covered under IND-AS applicability and IND-AS 101.

Ministry of Corporate Affairs has specified application dates of IND-AS.

These are mentioned in Companies IND-AS Rules, 2015.

The following diagram shows the timeline of applicability of IND-AS: –



1. Net worth is defined as: –

Paid up Share Capital (Equity and Preference) + General Reserve + Profit and loss A/c + Other Free Reserve + Security Premium + Capital Reserve arising due to grants on account of promoter contribution.

Net worth do not include Revaluation Reserve or Specific Reserve, for example: Statutory reserve, Investment allowance reserve.

2. Relationship of Holding, subsidiary, Associate and Joint venture should be treated on date of application of IND-AS.

3. Early Application of Ind-AS on “Banks & NBFC even Insurance Companies” is not permitted.

4. Subsidiaries are required to provide financial details in GAAP needed by Parent Company for the purpose of consolidation.

5. Once IND-AS are applied, then it cannot be revoked.

6. If Holding, Subsidiary, Associate and Joint Venture are foreign companies, then such companies are not required to present financial statements as per Ind-AS. (But these companies are required to present financial details as per IND-AS, needed by parent in India for consolidation purpose.

7. Entities which are not applying IND-AS, should apply Accounting Standards, notified by Ministry of Corporate Affairs in 2006. (ICAI STANDARDS, AS 1 to AS 29, except AS-8 & AS-6)

Hey, To gain knowledge about GST, please refer our other blogs by clicking here any help on filing of GST Returns or INCOME TAX returns please mail us at –

  1. What is GST?
  2. Advantages and Disadvantages of GST?
  3. E-Way bill?
  4. Exemption List under GST?
  5. Types of GST Taxes?


Following are the steps applied on the 1St time application of IND-AS.

1. Identify date of transition. This is the 1st date of comparative previous year.

2. Prepare opening balance sheet on date of transition as per IND-AS.

3. For such opening balance, entity should select Accounting Policies to be applied on such Balance Sheet.

4. Entity should make choices for any retrospective exception allowed in IND AS- 101. Two types of Exception are there: (a) Mandatory exception, (b) Optional Exception.

5. Re-measure Asset and liabilities as on Date of Transition based on above policies and exceptions. Its resultant effect will be transferred to Retained Earnings/Goodwill/Revaluation Reserve.

6. If any entity has more than one set of old GAAP (i.e., based on Ministry of Corporate Affairs, 2006, US GAAP, IFRS based etc.) then for the purpose of Ind-AS, set which relates more towards Indian GAAP will be considered as Old GAAP.

7. If an entity is preparing IND-AS based Financial statements in past as well and is preparing Ind-AS financial statement on application of IND-AS, its 1st Ind AS based financial statements, would in which Explicit & Unreserved Statement of Compliance has been given.


—> MANDATORY EXCEPTIONS: – In the following situation, Ind-AS are required to be applied prospectively mandatorily.

1. Estimates should be treated as prospectively

2. In Business combinations wherever Investments have been sold and controlled is lost/not lost, then retrospectively adjustment is not required. This adjustment will be made on prospective basis, for the future change in stake.

3. Regarding Financial Instruments: Government loans at concessional rates of interest or zero interest rate, will be split into liability and equity part on date of transition. Hedging will be treated prospectively. Hedge accounting given by Ind-AS 109 requires documentation; hence it is treated on prospective basis.

4. Classification of Financial Instrument as Fair value through Profit and loss or Fair value through Other Comprehensive Income or Amortised cost will be on prospective basis.

5. Embedded Derivative will be split into derivative & Host contract on date of transition.

6. Impairment of Financial Statements (IND-AS 36) require Prospective treatment under IND-AS applicability and IND-AS 101.

—> OPTIONAL EXCEPTIONS: – In the following situation, Ind-AS are required to be applied prospectively OR retrospectively as choice.

1. In Business combination, Accounting can be retrospective or prospective in case of first time application of IND-AS. If entity selects a date from which Ind-AS 103 will be applied, then all business combination from that selected date will be as per IND-AS 103.

2. In share based payments, vested options can be treated retrospectively or ignored. Regarding Unvested options, calculation should be made on retrospective basis for obligation.

3. Deemed Cost Exemption for Property, Plant And Equipment, Intangible Asset, Investment Property and investment in subsidiary, Associate and Joint venture.

4. Long term Foreign Monetary Items as defined in AS-11, can be treated as per Para D-13AA of IND-AS 34. We will discuss later. Refer our IND-AS 34 blog.

5. If any cumulative foreign operations, exchange difference had been recognized, due to AS-11 (NON- INTEGRAL FOREIGN OPERATIONS). Such exchange difference should be written off in Retained Earnings or such exchange difference can be carried forward as per policy.

6. A reconciliation statement should be prepared for reconciling Assets/Liabilities and Equity from OLD GAAP to NEW GAAP on date of transition.

We will discuss each and every IND-AS in our other posts.

Feel free to share your views in comment box or mail us at

Geetika Goyal (Team Itslyf)


Wanna Earn Bitcoins for free??

Click hereCryptobooks Earn free Bitcoins

Share on facebook
Share on twitter
Share on linkedin
Share on pinterest
Share on whatsapp

Leave a Comment

Your email address will not be published.

What is ItsLyf?

“ItsLyf” is a platform which provides all the recent updates and developments in Indian Taxation and Companies Act 2013, Technology, GST, Automobiles. This means you can get all the information related to all the fields at one place. Our Moto is Read, Write and Learn thus enables user to gather information.

Follow Us
Recent Posts