Ind AS: answers to common questions
Who must follow Ind AS, moving from Indian GAAP, and the key standards on leases, financial instruments and revenue. Each answer gives the short answer first, then the detail and the legal basis.
Applicability and transition
Which companies must follow Ind AS?
Ind AS is compulsory for companies whose equity or debt securities are listed, or are being listed, on a stock exchange in India or abroad (other than an SME exchange), for unlisted companies with a net worth of ₹250 crore or more, and for the holding, subsidiary, joint-venture and associate companies of any of them. NBFCs, banks and insurers have separate roadmaps. Once a company moves to Ind AS, it cannot go back.
Read the full answer · Reviewed 7 November 2026
What changes when a company moves from Indian GAAP to Ind AS?
The opening balance sheet is restated at the date of transition, the start of the comparative year, under Ind AS 101, with optional exemptions such as deemed cost for fixed assets. The numbers that most often change are revenue timing, leases coming on the balance sheet, expected credit loss and fair values, employee benefits, deferred tax and the new Other Comprehensive Income.
Read the full answer · Reviewed 7 November 2026
Key standards
How does a tenant account for a lease under Ind AS 116?
A tenant (lessee) recognises almost every lease on the balance sheet: a lease liability at the present value of the unpaid lease payments, and a right-of-use asset of the same amount plus advance payments and initial direct costs. Rent expense is replaced by depreciation and interest, which front-loads the cost. Leases of 12 months or less and leases of low-value assets can be expensed instead.
Read the full answer · Reviewed 7 November 2026
What is expected credit loss under Ind AS 109, and how is it calculated for receivables?
Ind AS 109 requires a loss allowance for credit losses expected in future, not only those already incurred. For trade receivables and contract assets, companies use the simplified approach: always provide for lifetime expected losses, usually through a provision matrix of historical loss rates by ageing bucket, adjusted for current and forward-looking conditions. Loans and other financial assets follow a three-stage approach.
Read the full answer · Reviewed 7 November 2026
What are the basics of revenue recognition under Ind AS 115?
Ind AS 115 recognises revenue in five steps: identify the contract, identify each separate promise (performance obligation), work out the transaction price, allocate it to the promises, and recognise revenue when or as each promise is fulfilled, which is when control passes to the customer. Revenue may be recognised at a point in time or over time. Discounts, rebates, returns and financing must be estimated.
Read the full answer · Reviewed 8 November 2026