Listed companies get relaxation on Ind AS compliance

To ensure smooth transition, Sebi today said certain relaxations would be provided to listed companies for submitting their financial statements that are compliant with the new accounting norms.
Already, the regulator has allowed companies to continue following the existing accounting norms till December 31, 2016.
Indian Accounting Standards (Ind AS), which are converged with the International Financial Reporting Standards (IFRS), are mandatorily applicable on certain class of companies from April 1 this year. Scheduled commercial banks and insurance companies would have to start implementing Ind AS from April 1, 2018.
"In order to facilitate smooth transition...Relaxations are being given for the first half year of the adoption of Ind AS," Sebi said as it issued a circular with requirements to be followed by entities with regard to the new accounting norms.

For the first half year of Ind AS adoption, the timeline for submitting the financial results would be extended by one month while the "said half yearly financial results can be submitted within 75 days from the end of the half year", Sebi said.
On comparative financial results for the corresponding half year, Sebi said limited review or audit of such comparative half yearly results is not mandatory.

"With regard to the comparative financial results for the preceding full year, the submission of such comparative full year results is not mandatory.
"However, if the listed entity opts to submit such comparative full year results, then limited review or audit of such comparative full year results is not mandatory," it added.

In cases wherein comparative half yearly and full year results are not subjected to limited review or audit, listed entity would have to disclose the same with "due prominence", it said.
"The listed entity shall further disclose that the management has exercised necessary due diligence to ensure that the said comparative results provide a true and fair view of its affairs," Sebi said.
According to the regulator, reconciliation of equity for previous year (year immediately before Ind AS adoption) would have to be provided while submitting the annual financial results for the first year of adoption.
This is to enable investors to understand the balance sheet and statement of profit and loss on account of transition to Ind AS, Sebi said.

"Reconciliation of net profit/loss shall be provided only for corresponding half year in the preceding year," it said.
When the prepared financial statements are for a period that is different from the normal 12-month period, the listed entity would have to disclose with due prominence that the figures are not comparable along with reasons," it added.