The latest roadmap for exempts banking, insurance and non-banking finance companies
The government on Friday said that companies with a networth of Rs 500 crore (Rs 5 billion) or more will have to mandatorily follow the new accounting norms that are converged with global standards from April 1, 2016.
Besides, corporate having a networth of less than Rs 500 crore but are listed or in the process of getting listed will have to compulsorily follow the new norms from April 1, 2017.
Indian Accounting Standards (Ind AS) are converged with the International Financial Reporting Standards (IFRS).
The corporate affairs ministry said the new roadmap has been drawn up after "wide consultations with various stakeholders and regulators".
The discussions followed Finance Minister Arun Jaitley saying in his Budget speech in July 2014 that there was an urgent need to converge the current Indian accounting standards with IFRS.
However, the latest roadmap for Ind AS exempts banking, insurance and non-banking finance companies.
The deadline would be applicable for other entities having net worth of Rs 500 crore or more. It would also apply for holding, subsidiary, joint venture or associate companies of these two class of entities, the ministry said in a statement.
It would be applicable on a voluntary basis for period starting April 1, 2015.
Further, Ind AS would be mandatory from April 1, 2017, for companies -- whose equity and/or debt securities are listed or are in the process of being listed within India or outside -- having a networth of less than Rs 500 crore.
Other companies, that are unlisted having a networth of Rs 250 crore (Rs 2.5 billion) or more but less than Rs 500 crore, also would have to start implementing Ind AS from April 1, 2017.
Holding, subsidiary, joint venture or associate companies of these entities would have to comply with this deadline.
"Companies whose securities are listed or in the process of listing on SME exchanges shall not be required to apply Ind AS. Such companies shall continue to comply with the existing accounting standards unless they choose otherwise," the statement said.
Once a company opts for Ind AS, it has to follow the same for all the subsequent financial statements.
"Companies not covered by the above roadmap shall continue to apply existing accounting standards prescribed in Annexure to the Companies (Accounting Standards) Rules, 2006," the statement said.
In his Budget speech, Jaitley had said, "I propose for adoption of the new Indian Accounting Standards (Ind AS) by the Indian companies from the financial year 2015-16 voluntarily and from the financial year 2016-17 on a mandatory basis.”
