The National Advisory Committee on Accounting Standards (NACAS) has recommended deferral of a key accounting standard related to revenue recognition and a final decision in this regard would be taken by the government.
The suggestion is with regard to implementing accounting standard Ind AS 115 which 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.
According to Chopra, the principles related to this particular standard could undergo changes and it would not be fair to implement it in India without being definite.
Indian Accounting Standards (Ind AS) are converged with the International Financial Reporting Standards (IFRS).
Ind AS 115 is equivalent to IFRS 15 and implementation of the latter has been deferred by the International Accounting Standards Board (IASB).
This revenue standard was jointly issued by the IASB and the US Financial Accounting Standards Board (FASB) in May last year. Initially, it was to be in force from January 2017.
IASB is expected to provide clarifications related to the standard.
Meanwhile, industry bodies including CII, Ficci and Assocham have made representations to NACAS for deferring the implementation of Ind AS 115.
NACAS provides advise to the government on accounting policies and standards.
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 in line with the decision of IASB and FASB.
"It will enable Indian companies to apply Ind AS 115 in its final shape. The move will also help in easing the process of transition to Ind AS," he said in a statement.
Companies with a net worth of Rs 500 crore or more would have to mandatorily follow the new accounting norms that are converged with global standards 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 would have to compulsorily follow the new norms from April 1, 2017.
The Ind AS roadmap, announced in January this year, exempts banking, insurance and non-banking finance companies.
