To provide a "fair picture" of a company's financial position, more than 3,000 disclosures will be required under the Indian Accounting Standards, according to chartered accountants' apex body ICAI.
Ind AS, which is mandatory for certain class of companies from April 1 this year, is converged with International Financial Reporting Standards (IFRS).
The aim of these standards is to make the financial statements more transparent and minimise the possibility of manipulation, as per the Institute of Chartered Accountants of India (ICAI).
The new accounting standard primarily focuses on three aspects -- time value of money, fair value of assets/ liabilities and disclosures.
ICAI President M Devaraja Reddy said Ind AS are based on the premise that financial statements should be more transparent and faithfully represent the actual financial position and performance of an entity.
"In order to present a fair picture of the entity's financial position, these standards would require more than 3,000 disclosures. Such disclosures would assist investors in making more informed financial decisions and predicting the future financial performance of the entities," Reddy told PTI.
Reddy said increased transparency would ensure that analysts and other stakeholders, among others, would be able to benchmark the judgments and estimates made by the entity against their peers in India and globally.
Among others, Ind AS 107 requires very comprehensive disclosures regarding financial instruments and risks to which an entity is exposed as well as the policies for managing such risks.
Certain class of companies, including those with a net worth of Rs 500 crore or more have to mandatorily follow Ind AS from April 1, 2016.
