India's new accounting standards substantially converged with IFRS Standards

13 November 2015

A new set of Indian Accounting Standards (Ind AS) that are based on and substantially converged with IFRS Standards as issued by the International Accounting Standards Board (IASB) have been notified (and have therefore become authoritative) under Indian law. They are being phased in for different categories of companies from 2015 to 2017.

In 2013, India revised its Companies Act to require listed and large companies to prepare consolidated financial statements in conformity with Ind AS, which was to be adopted by the Institute of Chartered Accountants of India (ICAI). ICAI has subsequently adopted those standards.

Ind AS reflects some modifications to IFRS Standards that are generally optional, though several are mandatory, and of limited scope. An appendix to each Ind AS explains 'the major differences, if any, between' the Ind AS and the corresponding IFRS Standard.

Ind AS is being phased in as follows:

Companies other than insurance companies, banking companies, and non-banking finance companies

Ind AS is required or permitted as follows:

Insurance companies, banking companies, and non-banking finance companies

These companies must follow the accounting standards prescribed by the Reserve Bank of India (RBI), which is the relevant regulator. On 29 September 2015, RBI announced:

‘The Reserve Bank has recommended to the Ministry of Corporate Affairs a roadmap for the implementation of Ind AS by banks and non-banking financial companies from 2018-19 onwards.´

We have accordingly updated our website profile on the use of IFRS in India. You can view the profiles here.