Apex accounting advisory panel NACAS has asked the government to postpone implementation of a key revenue recognition standard as a clear picture about its applicability is yet to emerge globally.
The recommendation to postpone implementing Ind AS 115 -- under the new accounting norms -- also comes at a time when the industry has been seeking deferral of the same.
Ind AS 115 would be applicable for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows in financial statements.
"We have recommended to the government to defer the implementation of Ind AS 115," NACAS Chairperson Amarjit Chopra told PTI.
The recommendation has been made to the Corporate Affairs Ministry, which would take a final view on the matter.
The National Advisory Committee on Accounting Standards (NACAS) provides advice to the government on accounting policies and standards.
Indian Accounting Standards (Ind AS), which are converged with the International Financial Reporting Standards (IFRS), would be mandatorily applicable from April 2016.
Ind AS 115 is equivalent to IFRS 15 and implementation of the latter has been deferred by the International Accounting Standards Board (IASB).
IFRS 15 was jointly issued by the IASB and the US Financial Accounting Standards Board (FASB) in May last year.
IASB is expected to provide clarifications related to the standard.
According to Chopra, the principles related to Ind AS 115 could undergo changes and it would not be fair to implement it in India without having a definite idea.
Recently, industry bodies including CII, Ficci and Assocham had made representations to NACAS for deferring the implementation of Ind AS 115.
Sanjeev Singhal, Partner in Indian member firm of EY Global, said the decision to defer Ind AS 115 on revenue would be a welcome step and enable Indian companies to apply the standard in its final shape.
"The move will also help in easing the process of transition to Ind AS," he added.
Under the revised roadmap for Ind AS roll-out, companies with a net worth of Rs 500 crore or more have to mandatorily follow these norms from April 1, 2016.
Besides, corporates having a net worth of less than Rs 500 crore but are listed or in the process of getting listed have to compulsorily follow the new norms from April 1, 2017.
The road map, announced in January this year, exempts banking, insurance and non-banking finance companies.
