| Accounting Standards issued by the Institute of Chartered Accountants of India |
| The Central Government may prescribe the standards of accounting or any addendum thereto, as recommended by the Institute of Chartered Accountants of India, constituted under section 3 of the Chartered Accountancy Act, 1949 (38 of 1949), in consultation with and after examination of recommendations made by the National Financial Reporting Authority. |
| In exercise of the powers conferred by section 133 and section 469 of the Companies Act, 2013 , the Central Government, in consultation with the National Advisory Committee on Accounting Standards, has issued Companies (Indian Accounting Standards) Rules, 2015
Rule 4 states the obligation to comply with Indian Accounting Standards (Ind AS) , the following companies have to comply with Ind AS: (1) The Companies and their auditors shall comply with the Indian Accounting Standards Ind AS) specified in Annexure to these rules in preparation of their Financial statements and audit respectively, in the following manner, namely:- (i) a[any company and its holding, subsidiary, joint venture or associate company] may comply with the Indian Accounting Standards (Ind AS) for financial statements for accounting periods beginning on or after 1st April, 2015, with the comparatives for the periods ending on 31st March, 2015, or thereafter; (ii) the following companies shall comply with the Indian Accounting Standards (Ind AS) for the accounting periods beginning on or after 1st April, 2016, with the comparatives for the periods ending on 31st March, 2016, or thereafter, namely:- (a) companies whose equity or debt securities are listed or are in the process of being listed on any stock exchange in India or outside India and having Net worth of rupees five hundred crore or more; (b) companies other than those covered by sub-clause (a) of clause (ii) of sub- rule (1) and having net worth of rupees five hundred crore or more; (iii) the following companies shall comply with the Indian Accounting Standards (Ind AS) for the accounting periods beginning on or after 1st April, 2017, with the comparatives for the periods pending on 31st March, 2017, or thereafter, namely:- (a) companies whose equity or debt securities are listed or are in the process of being listed on any stock exchange in India or outside India and having net worth of less than rupees five hundred crore; (b) companies other than those covered in clause (ii) of sub- rule (1) and sub-clause (a) of clause (iii) of sub-rule (1), that is, unlisted companies having net worth of rupees two hundred and fifty crore or more but less than rupees five hundred crore. (c) holding, subsidiary, joint venture or associate companies of companies covered under sub-clause (a) of clause (iii) of sub- rule (1) and sub-clause(b) of clause (iii) of sub- rule (1), as the case may be: Provided that nothing in this sub-rule, except clause (i), shall apply to companies whose securities are listed or are in the process of being listed on SME exchange as referred to in Chapter XB or on the Institutional Trading Platform without initial public offering in accordance with the provisions of Chapter XC of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009. Explanation 1. – SME Exchange shall have the same meaning as assigned to it in Chapter XB of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009. Explanation 2. – “Comparatives” shall mean comparative figures for the preceding accounting period. |
For Companies that do not fall in the above category have to comply with the AS-1 to AS-29 issued by the Institute of Chartered Accountants of India as mentioned below and the applicability on the Company depends on the Level of the Enterprise (Company)
| Criteria for classification of enterprises | ||||||||
| Level I Enterprises | ||||||||
| Enterprises which fall in any one or more of the following categories, at any time during the accounting period,
are classified as Level I enterprises: |
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| i. Enterprises whose equity or debt securities are listed whether in India or outside India. | ||||||||
| ii. Enterprises which are in the process of listing their equity or debt securities as evidenced by the board
of directors’ resolution in this regard.
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| iii. Banks including co-operative banks. | ||||||||
| iv. Financial institutions. | ||||||||
| v. Enterprises carrying on insurance business. | ||||||||
| vi. All commercial, industrial and business reporting enterprises, whose turnover for the immediately
preceding accounting period on the basis of audited financial statements exceeds Rs. 50 crore. Turnover does not does not include ‘other income’. |
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| vii. All commercial, industrial and business reporting enterprises having borrowings, including public deposits,
in excess of Rs. 10 crore at any time during the accounting period. |
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| viii. Holding and subsidiary enterprises of any one of the above at any time during the accounting period. | ||||||||
| Level II Enterprises | ||||||||
| Enterprises which are not Level I enterprises but fall in any one or more of the following categories are classified as
Level II enterprises: |
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| i. All commercial, industrial and business reporting enterprises, whose turnover for the immediately
preceding accounting period on the basis of audited financial statements exceeds Rs. 40 lakhs but does not exceed Rs. 50 crore. Turnover does not include ‘other income’. |
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| ii. All commercial, industrial and business reporting enterprises having borrowings, including public deposits,
in excess of Rs. 1 crore but not in excess of Rs. 10 crore at any time during the accounting period. |
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| iii. Holding and subsidiary enterprises of any one of the above at any time during the accounting period. | ||||||||
| Level III Enterprises | ||||||||
| Enterprises which are not covered under Level I and Level II are considered as Level III enterprises. | ||||||||
| Applicability of Accounting Standards | |||||
| SL. | Name of Accounting Standard | Applicable to all | Exemptions to SME (Level III) | Non-Applicability | Apply to Level II & III with relaxation |
| AS-1 | Disclosure of Accounting Policies | Applicable to Level I, II and III | |||
| AS-2 | Valuation of Inventories | Applicable to Level I, II and III | |||
| AS-3 | Cash Flow Statement | SME | |||
| AS-4 | Contingencies and Events Occuring after the Balance Sheet Date | Applicable to Level I, II and III | |||
| AS-5 | Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies | Applicable to Level I, II and III | |||
| AS-6 | Depreciation Accounting | Applicable to Level I, II and III | |||
| AS-7 | Construction Contracts (Revised 2002) | Applicable to Level I, II and III | |||
| AS-8 | Accounting for Research and Development | Applicable to Level I, II and III | |||
| AS-9 | Revenue Recognition | Applicable to Level I, II and III | |||
| AS-10 | Accounting for Fixed Assets | Applicable to Level I, II and III | |||
| AS-11 | The Effects of Changes in Foreign Exchange Rates (Revised 2003) | Applicable to Level I, II and III | |||
| AS-12 | Accounting for Government Grants | Applicable to Level I, II and III | |||
| AS-13 | Accounting for Investments | Applicable to Level I, II and III | |||
| AS-14 | Accounting for Amalgamations | Applicable to Level I, II and III | |||
| AS-15 | Accouting for Retirement Benefits in the Financial Statements of Employers | Applicable to Level I, II and III | |||
| AS-16 | Borrowing Costs | Applicable to Level I, II and III | |||
| AS-17 | Segment Reporting | SME | |||
| AS-18 | Related Party Disclosure | SME | |||
| AS-19 | Leases | Paragraphs 22(c), (e) and (f); 25(a), (b) and (e); 37(a), (f) and (g); and 46(b), (d) and (e), of AS 19 are not applicable to Level II and Level III enterprises | |||
| AS-20 | Earning Per Share | i. As regards AS 20, diluted earnings per share and information required by paragraph 48 of AS 20 are not required to be disclosed by Level II and Level III enterprises if this standard is applicable to these enterprises because they disclose earnings per share. So far as companies are concerned, since all the companies are required to apply AS 20 by virtue of the provisions of Part IV of Schedule VI to the Companies Act, 1956, requiring disclosure of earnings per share, the position is that the companies which do not fall in Level I, would not be required to disclose diluted earnings per share and information required by paragraph 48 of AS 20. | |||
| AS-21 | Consolidated Financial Statement | N.A. to Level II & III | |||
| AS-22 | Accounting for Taxes on Income | Applicable to Level I, II and III | N.A. to Level II & III | ||
| AS-23 | Accounting for Investments in Associates in CFS | ||||
| AS-24 | Discontinuing Operation | SME | |||
| AS-25 | Interim Financial Reporting | N.A. to Level II & III | |||
| AS-26 | Intangible Assets | Applicable to Level I, II and III | |||
| AS-27 | Financial Reporting of Interest in Joint Ventures (to the extent of requirement relating to CFS) | N.A. to Level II & III | |||
| AS-28 | Impairment of Assets | Applicable to Level I, II and III | |||
| AS-29 | Provisions, Contingent Liabilities and Contingent Assets | Paragraph 67 is not applicable to Level II enterprises Paragraphs 66 and 67 are not applicable to Level II and Level III enterprises |
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