The government has notified the amended rules for Indian Accounting Standards (Ind AS) even as it deferred the implementation of a key revenue recognition standard as a clear picture about its applicability is yet to emerge globally.
Ind AS, which are converged with the International Financial Reporting Standards (IFRS), would be mandatorily applicable on certain class of companies from tomorrow.
The Corporate Affairs Ministry notified the Companies (Indian Accounting Standards) Rules, 2015 on March 30.
Following apex accounting advisory panel NACAS's recommendation, the Ministry has decided to postpone implementation of Ind AS 115.
Ind AS 115 was to be applicable for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows in financial statements.
"Considering the challenges that companies might face, the government has deferred the applicability of Ind AS 115 in line with the deferral of corresponding global standards," Sai Venkateshwaran, Partner and Head of Accounting Advisory Services at KPMG in India, said.
Ind AS 115 is equivalent to IFRS 15 and the latter is expected to be implemented globally from January 2018.
Meanwhile, the compulsory implementation of Ind AS would be applicable on certain class of companies from tomorrow -- financial year 2016-17.
Among others, companies with with a net worth of Rs 500 crore or more have to mandatorily follow these norms from April 1, 2016.
About Ind AS implementation, Venkateshwaran said it would "improve the quality and transparency of financial reporting by Indian companies". Besides, the acceptance of the companies' financial statements would increase globally, he added.
