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IND AS ROADMAPS AND OVER ALL IMPACT OF IND AS ADOPTION
7 October 2016
Titre de la présentation1
AGENDA
Convergence with IFRS in India- The Journey
The roadmaps
IND-AS Roadmaps-Comparisons
Ind AS vs. IFRS-Listing
Key focus areas
Learning from global peers
01CONVERGENCE WITH IFRS IN INDIA- THE JOURNEY
DateTitre de la présentation
CONVERGENCE WITH IFRS IN INDIA- THE JOURNEY
Date4 Titre de la présentation
ICAI in 2007- concept paper on convergence
with IFRS in India
In February 2015 MCA notified 39 Ind AS for cos
other than banking companies, insurance
cos and NBFCs
In the Union Budget 2014–15, the strategy for
the adoption of Ind AS was laid down
In 2009, India made a strong commitment to
converge AS with IFRS at the G20 summit and a Core Group of MCA was set-up with participation from RBI,CAG, SEBI,
IRDA etc.
In 2010 roadmap from MCA was issued to be
implemented from 1 April 2011 (35 Ind AS were issued); however,
could not be implemented
ICAI had proposed a revised roadmap in
March 2014
02THE ROADMAPS
DateTitre de la présentation
THE ROADMAPS
Date6 Titre de la présentation
Issued by MCA for corporates
Issued by RBI for SCBs
Issued by RBI for AIFIs (EximBanks, NABARD, NHB and SIDBI)
Issued by RBI for NBFCs
Issued by IRDAI for Insurance Companies
MCA'S ROADMAP
• The Ind AS- The Ind AS Rules, 2015
• 40 Ind AS (39 issued in Feb 2015 + 2 more issued withdrawing 1 in March
2016).
• Cos other than covered under road map will continue to apply AS Rules
2006.
• Phases
- Recommendatory
- Mandatory
Date7 Titre de la présentation
MANDATORY PHASE
Date8 Titre de la présentation
Mandatory Phase Iwef accounting periods on or after 1 April 2016
(comparatives for 2015-16)
XEquity and/or debt
securities are listed or are in the process of listing in
India/overseas andhaving net worth of
=>Rs.500 cr
YCos, other than (X), having a net worth of =>Rs.500 cr
XHolding, subsidiary, JV or associates of (X) or (Y).
MANDATORY PHASE
Date9 Titre de la présentation
Mandatory Phase IIwef accounting periods on or after 1 April 2017
(comparatives for 2016-17)
XEquity and/or debt
securities are listed or are in the process of listing in
India/ overseas not covered in Phase I
YCos other than (X) or in Phase I and having
a net worth of => Rs.250 cr but <
Rs.500 cr
XHolding, subsidiary, JVs or associates (X) or (Y).
MCA'S ROADMAP-OTHER ASPECTS
• Once Ind AS voluntarily opted, option is irrevocable.
• Net worth- as per standalone audited FS as on 31 March 2014
• Applies to both SFS and CFS
• Cos meeting the specified thresholds for the first time at the end of an accounting year shall apply Ind AS from the immediate next accounting year.
• Cos shall prepare their FS per Ind AS effective at the end of its first Ind AS reporting period.
Date10 Titre de la présentation
MCA ROADMAP-KEY DATES
Date11 Titre de la présentation
CLARIFICATIONS PROVIDED BY ITFG
Date12 Titre de la présentation
• Applicability of Ind AS due to increase in net worth after 31 March 2014
• Applicability of Ind AS on subsequent change in status as subsidiaries
• Applicability of Ind AS to an Indian sub of a foreign co
• Clarification on adoption of transition date
• Compliance of Ind-AS by companies with negative net worth
RBI’S ROADMAP- BANKS (SCBS)
Effective date of implementation: 1 April 2018 (comparatives for F.Y.2017-18)
Criteria for affiliates: Notwithstanding the MCA roadmap, the affiliates of SCBs (excluding RRBs) would prepare Ind AS FS for accounting periods beginning from 1 April 2018 onwards
Early adoption: Not permitted
Applicability to SFS and CFS: Applicable to both SFS and CFS
Date13 Titre de la présentation
RBI’S ROADMAP- BANKS (SCBS)
• Regulatory reporting:
- Assess the impact of implementation and place quarterly progress
reports to their Boards.
- Submit proforma Ind AS FS to the RBI from the half-year ended 30
September 2016, onwards latest by 30 November 2016.
- Disclose in AR the strategy for Ind AS implementation, including the
progress made from the FY 2016-17 until implementation.
Date14 Titre de la présentation
RBI’S ROADMAP- AIFIS
Effective date of implementation: 1 April 2018 (comparatives for F.Y.2017-18)
Criteria for affiliates: Not mentioned
Early adoption: Not permitted
Applicability to SFS and CFS: Applicable to both SFS and CFS
Date15 Titre de la présentation
RBI’S ROADMAP- AIFIS
Regulatory reporting:
• Assess the impact of implementation and place quarterly progress reports to
their Boards.
• Submit proforma Ind AS FS to the RBI from the half-year ended 30 September
2016, onwards latest by 30 November 2016, except in case of NHB where
proforma Ind AS FS for the half year ended 31 December 2016 can be
submitted latest by 28 February 2017.
• Disclose in AR of the strategy for Ind AS implementation, including the
progress made from the financial year 2016-17 until implementation.
Date16 Titre de la présentation
RBI’S ROADMAP- NBFCS
Effective date of implementation:
Criteria for affiliates: When an NBFC gets covered under NBFC roadmap, its affiliates, other than those companies already covered under the MCA roadmap would also prepare Ind AS FS from that year.
Early adoption: Not permitted. However, NBFCs are allowed to provide Ind AS compliant FS data for preparation of CFS by its parent/investor.
Date17 Titre de la présentation
2018-19 Listed Unlisted (comparatives for 2017-18) (Net worth 500 cr or more) (Net worth 500 cr or more)
2019-20 Listed Unlisted (comparatives for 2018-19) (Net worth less than 500 cr) (Net worth 250 cr or more
but less than 500 cr)
IRDAI’S ROADMAP- INSURANCE COMPANIES
Effective date of implementation: 1 April 2018 (comparatives for F.Y.2017-18)
Criteria for affiliates: Not mentioned.
Early adoption: Not permitted. However, insurance companies are allowed to
provide Ind AS compliant FS data for preparation of CFS by its parent/investor.
Applicability to SFS & CFS: Applicable to both SFS and CFS.
Date18 Titre de la présentation
IRDAI’S ROADMAP- INSURANCE COMPANIES
Regulatory Reporting:
• Insurers shall assess the impact of the Ind AS and place quarterly progress reports to their Boards.
• Submit proforma Ind AS FS to the Authority from the quarter ended 31 December 2016.
• Disclose the strategy for Ind AS implementation, including the progress made in this regard from the financial year 2015-16 onwards until implementation.
Date19 Titre de la présentation
03ROADMAP- THE COMPARISON
DateTitre de la présentation
APPLICABILITY OF ROADMAP
Date21 Titre de la présentation
CorporatesScheduled
Commercial Banks
NBFCAIFIs Insurance Companies
2016-17 Listed Unlisted (comparative for 2015-16)
(Net worth => 500 Cr)
(Net worth => 500 Cr)
2017-18 Listed Unlisted
(comparative for 2016-17)
(Net worth 0 - <500 Cr)
(Net worth >=250cr -<500cr)
2018-19 SCBs (excludi
ng RRBs)
(comparative for 2017-18)
2018-19 AIFI's (Exim bank,
NABARD, NHB & SIDBI
(Comparitives for 2017-18
2018-19 Listed Unlisted (comparative for 2017-18)
(Net worth => 500 Cr)
(Net worth => 500 Cr)
2019-20 Listed Unlisted
(comparative for 2018-19)
(Net worth<500 Cr)
(Net worth >=250cr -<500cr)
2018-19 Insurers and
Insurance
companies
(comparative for 2017-18)
CorporatesScheduled
Commercial Banks
NBFCAIFIs Insurance Companies
When a company gets covered under this MCAroadmap, company's affiliates (irrespective oftheir net worth) would also prepare Ind AS FS from that year
Notwithstanding the MCA roadmap, the affiliates of SCBs (excluding RRBs) would prepare Ind AS FS for accounting periods beginning from 1 April 2018 onwards
When an NBFC gets covered under NBFC roadmap, its affiliates, other than those companies already covered under the MCA roadmap would also prepare Ind AS FS from that year
Not mentioned Not mentioned
CRITERIA FOR AFFILIATES
Date23 Titre de la présentation
Once adopted, option can not be revoked
However, NBFCs are allowed to provide Ind AS compliant FS data for preparation of CFS by its parent/ investor
However, Insurance companies are allowed to provide Ind AS compliant FS data for preparation of CFS by its parent/ investor
CorporatesScheduled
Commercial Banks
NBFCAIFIs Insurance Companies
EARLY ADOPTION
04IND AS VS IFRS-LISTING
DateTitre de la présentation
IND AS VS. IFRS
IAS/IFRS Title Ind AS
IAS 1 Presentation of Financial Statement 1IAS 2 Inventories 2IAS 7 Statement of Cash Flows 7IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors 8IAS 10 Events after the Reporting Period 10IAS 11 Construction Contracts 11 IAS 12 Income Taxes 12IAS 16 Property, Plant and Equipment 16IAS 17 Leases 17IAS 18 Revenue 18 IAS 19 Employees Benefits 19IAS 20 Accounting for Governments Grants and disclosure of
Government Assistance20
IAS 21 The Effects if Changes in Foreign Exchange Rates 21IAS 23 Borrowing Costs 23IAS 24 Related Party Disclosures 24IAS 27 Separate Financial Statements 27IAS 28 Investments in Associates and Joint Ventures 28IAS 29 Financial Reporting in Hyperinflationary Economics 29IAS 32 Financial Instruments: Presentation 32IAS 33 Earnings Per Share 33
IND AS VS. IFRS
IAS/IFRS Title Ind AS
IAS 34 Interim Financial Reporting 34IAS 36 Impairment of Assets 36IAS 37 Provisions, Contingent Liabilities and Contingent Assets 37IAS 38 Intangible Assets 38IAS 40 Investment Property 40IAS 41 Agriculture 41IFRS 1 First-time adoption of Indian Accounting Standards 101IFRS 2 Share-Based Payments 102IFRS 3 Business Combinations 103IFRS 4 Insurance Contracts 104IFRS 5 Non-Current Assets Held for Sale and Discontiunued
Operations105
IFRS 6 Exploration for and Evaluation of Mineral Resources 106IFRS 7 Financial Instruments: Disclosures 107IFRS 8 Operating Segments 108IFRS 9 Financial Instruments 109 IFRS 10 Consolidated Financial Statements 110IFRS 11 Joint Arrangements 111IFRS 12 Disclosure of Interests in Other Entities 112IFRS 13 Fair Value Measurement 113IFRS 14 Regulatory Deferral Accounts 114
26
05KEY FOCUS AREAS
DateTitre de la présentation
FOCUS AREAS
Financial reporting factors
Date28 Titre de la présentation
• Accounting Practices
• Tax Implications
• Group Policies
• The Industry Peers
• Management Strategies
FOCUS AREASNon- Financial reporting factors
Date29 Titre de la présentation
• Company Personnel
• Training Needs
• Human Resources System
• Treasury and Finance Function
• IT Systems
• Stakeholders Expectations
06LEARNING FROM GLOBAL PEERS
DateTitre de la présentation
LEARNING FROM GLOBAL PEERS
Date31 Titre de la présentation
Lack of co-ordination
between project teams and business segments
Inferior project management
system.
Absence or lack of adequate
support from the senior
management at the early stage of
the project.
Failure of timely updating the
modified numbers into the systems.
Lack of technical training and
misunderstanding the results.
Non-involvement of tax personnel
at all levels during conversion process.
The quantum, complications and
the related timeframe of the
project were undermined.
Underestimating the marginal accounting
differences, which turned into
significant items