Ind AS: applicability, key standards and transition
Indian Accounting Standards (Ind AS) are converged with IFRS and prescribed under the Companies (Indian Accounting Standards) Rules, 2015. This guide covers who must follow them, how they differ from earlier standards, and how to plan the move.
In short
- Ind AS applies to listed companies and unlisted companies with net worth of ₹250 crore or more, plus their holding, subsidiary, associate and joint-venture companies. NBFCs have their own net-worth test.
- Everyone else follows the Accounting Standards (AS), unless they opt in voluntarily. Opting in cannot be reversed.
- The biggest changes are in revenue, leases, financial instruments and consolidation.
- Moving over needs an opening balance sheet and comparative figures prepared under Ind AS.
Open a heading to read it.
1. Does Ind AS apply to you?
- Listed companies (and those in the process of listing), other than those on SME exchanges.
- Unlisted companies with a net worth of ₹250 crore or more.
- Holding, subsidiary, associate and joint-venture companies of the above.
- NBFCs are covered under a separate net-worth based roadmap.
- Net worth is tested as at the end of a financial year, and Ind AS applies from the following year. Confirm the dates against the Rules for your facts.
Banks and insurers follow their own regulators' formats and timelines.
2. The standards at a glance
| Standard | What it governs |
|---|---|
| Ind AS 1, 7, 8, 10 | Presentation, cash flows, policies and estimates, events after the reporting period |
| Ind AS 12, 19, 21 | Income taxes (deferred tax), employee benefits, foreign exchange |
| Ind AS 16, 38, 40, 36 | Property, intangibles, investment property, impairment |
| Ind AS 32, 107, 109 | Financial instruments: presentation, disclosure, recognition and measurement |
| Ind AS 110, 111, 112, 28 | Consolidation, joint arrangements, disclosure of interests, associates |
| Ind AS 103 | Business combinations |
| Ind AS 115 | Revenue from contracts with customers |
| Ind AS 116 | Leases |
| Ind AS 102 | Share-based payments (ESOPs) |
| Ind AS 24, 108, 33 | Related parties, operating segments, earnings per share |
| Ind AS 101 | First-time adoption |
| Ind AS 113 | Fair value measurement |
3. What changes compared with Accounting Standards
| Area | Under AS | Under Ind AS |
|---|---|---|
| Revenue | Recognised mostly on transfer of risks and rewards | Five-step model; revenue as performance obligations are satisfied |
| Leases | Operating leases expensed | Lessees recognise a right-of-use asset and lease liability |
| Financial instruments | Mostly cost; provisions on incurred loss | Fair value or amortised cost; expected credit loss |
| Deferred tax | Timing differences approach | Temporary differences (balance sheet approach) |
| Business combinations | Often at book values; goodwill amortised | Fair values; goodwill tested for impairment, not amortised |
| Presentation | Schedule III, Division I | Schedule III, Division II, with Other Comprehensive Income |
4. Revenue under Ind AS 115: the five steps
- Identify the contract with the customer.
- Identify the separate performance obligations in it.
- Determine the transaction price, including variable consideration.
- Allocate the price to each performance obligation.
- Recognise revenue when, or as, each obligation is satisfied.
Bundled contracts, discounts, rebates, customer loyalty points and long-term projects are where positions most often change.
5. Leases, financial instruments and consolidation
- Leases (Ind AS 116): almost every lease moves on to the balance sheet as an asset and a liability, with depreciation and interest replacing rent expense. Short-term and low-value leases can be exempted.
- Financial instruments (Ind AS 109): assets are classified as amortised cost, fair value through other comprehensive income, or fair value through profit or loss. Impairment uses an expected credit loss model, including for trade receivables.
- Consolidation (Ind AS 110): based on control, not only on shareholding. Preferred shares, options and board rights can change the answer.
6. Transition: how first-time adoption works (Ind AS 101)
- Fix the transition date, the start of the earliest comparative year.
- Prepare an opening Ind AS balance sheet, applying the standards retrospectively.
- Use the optional exemptions where useful, for example deemed cost for property, plant and equipment.
- Prepare reconciliations of equity and profit from the previous framework to Ind AS.
- Present full comparative figures and expanded disclosures.
Plan for system changes, new policies, and a parallel run before the first reporting date.
7. Where companies struggle, and how to plan
- Collecting lease and contract data from operations.
- Valuing financial instruments, including preference shares and convertible instruments issued to investors.
- Group data for consolidation, especially from subsidiaries on different systems.
- Deferred tax on new temporary differences.
- Training finance teams and aligning budgets and covenants that were built on old numbers.
A sensible plan is: gap assessment, accounting policy manual, opening balance sheet, system changes, parallel run, then first financial statements.
General information as of October 2026, not advice on your facts. Standards are amended periodically; confirm the current text and applicability.