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    Applicability of Indian Accounting Standards: Phases and Key Benefits

    June 05, 2024

    Overview of Indian Accounting Standards Applicability

    There are mainly four phases of applicability of Indian accounting standards. These phases are applicable on the basis of the net worth and the listing status of the company. These phases are divided by the MCA (Ministry of Corporate Affairs).

    Phase I: Applicability of Indian Accounting Standards (2016 onwards)

    This phase makes Indian accounting standards compulsorily applicable to the companies. This phase was introduced on 1 April 2016 and is applicable thereafter.

    In the 1st phase, this Indian Accounting Standards applies to all the listed companies and the companies that are in progress to be listed.

    These Indian accounting standards are applicable to companies that have a net worth of Rs. 500crore and more.

    Phase II: Indian Accounting Standards Applicability from FY 2017

    This phase started with the financial year 2017 and became compulsory for all the listed companies and the companies that are in progress to be listed or the companies which were on the stock exchange of India that were not included in phase 1.

    All the Companies having a net worth value of Rs. 250 crore and more but less than Rs. 500 crore have to adopt the Indian Accounting Standards according to this phase.

    Note:  These Indian Accounting Standards or Indian Accounting Standards were concluded in the 2017 financial year but the net worth of a company will be considered for the previous financial years from 2013-2014 to 2015-2016.

    Phase III: Ind AS Applicability for SEBI-Regulated Entities and Financial Institutions

    Phase III makes the applicability of Indian Accounting Standards to all i.e. SEBI regulated entities, NBFCs, Insurance Companies, and all the types of banks, NBFCs. This phase will be applicable from the financial year 2018.

    This phase would be applicable to the companies that are as follows:

    • Companies that have a net worth of Rs 500 crore and more
    • IRDAI or The Insurance Regulatory and Development Authority of India would ensure the meeting of the net worth of accounting requirements by Insurance companies
    • To check the net worth of other financial companies or institutions, NBFCs are to be concluded on the basis of the financial years of 2015-16, 2016-17, and 2017-18

    Phase IV: Ind AS for NBFCs with Net Worth Between ₹250–₹500 Crore

    This phase only covers all the Non-Banking Financial Companies (NBFCs) that have a net worth of more than Rs250 crore but less than Rs 500 crore.

    This phase would be applicable from the financial year 2019 i.e. from April 1st, 2019.

    Key Benefits of Indian Accounting Standards

    • Companies can maintain effective and efficient compliance by following these standards
    • Cooperation among accounting rules and policies can be maintained by the company
    • Companies can be accepted internationally by all government bodies and institutions by adopting these standards
    • These standards are accepted all over the world i.e. internationally. So, these standards should be followed by the company


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