ind as roadmaps and over all impact of ind as adoption · ind as roadmaps and over all impact of...

IND AS ROADMAPS AND OVER ALL IMPACT OF IND AS ADOPTION

7 October 2016

Titre de la présentation1

AGENDA

Convergence with IFRS in India- The Journey

The roadmaps

IND-AS Roadmaps-Comparisons

Ind AS vs. IFRS-Listing

Key focus areas

Learning from global peers

01CONVERGENCE WITH IFRS IN INDIA- THE JOURNEY

DateTitre de la présentation

CONVERGENCE WITH IFRS IN INDIA- THE JOURNEY

Date4 Titre de la présentation

ICAI in 2007- concept paper on convergence

with IFRS in India

In February 2015 MCA notified 39 Ind AS for cos

other than banking companies, insurance

cos and NBFCs

In the Union Budget 2014–15, the strategy for

the adoption of Ind AS was laid down

In 2009, India made a strong commitment to

converge AS with IFRS at the G20 summit and a Core Group of MCA was set-up with participation from RBI,CAG, SEBI,

IRDA etc.

In 2010 roadmap from MCA was issued to be

implemented from 1 April 2011 (35 Ind AS were issued); however,

could not be implemented

ICAI had proposed a revised roadmap in

March 2014

02THE ROADMAPS


THE ROADMAPS


Issued by MCA for corporates

Issued by RBI for SCBs

Issued by RBI for AIFIs (EximBanks, NABARD, NHB and SIDBI)

Issued by RBI for NBFCs

Issued by IRDAI for Insurance Companies

MCA'S ROADMAP

• The Ind AS- The Ind AS Rules, 2015

• 40 Ind AS (39 issued in Feb 2015 + 2 more issued withdrawing 1 in March

2016).

• Cos other than covered under road map will continue to apply AS Rules

2006.

• Phases

- Recommendatory

- Mandatory


MANDATORY PHASE


Mandatory Phase Iwef accounting periods on or after 1 April 2016

(comparatives for 2015-16)

XEquity and/or debt

securities are listed or are in the process of listing in

India/overseas andhaving net worth of

=>Rs.500 cr

YCos, other than (X), having a net worth of =>Rs.500 cr

XHolding, subsidiary, JV or associates of (X) or (Y).

MANDATORY PHASE


Mandatory Phase IIwef accounting periods on or after 1 April 2017

(comparatives for 2016-17)

XEquity and/or debt

securities are listed or are in the process of listing in

India/ overseas not covered in Phase I

YCos other than (X) or in Phase I and having

a net worth of => Rs.250 cr but <

Rs.500 cr

XHolding, subsidiary, JVs or associates (X) or (Y).

MCA'S ROADMAP-OTHER ASPECTS

• Once Ind AS voluntarily opted, option is irrevocable.

• Net worth- as per standalone audited FS as on 31 March 2014

• Applies to both SFS and CFS

• Cos meeting the specified thresholds for the first time at the end of an accounting year shall apply Ind AS from the immediate next accounting year.

• Cos shall prepare their FS per Ind AS effective at the end of its first Ind AS reporting period.


MCA ROADMAP-KEY DATES


CLARIFICATIONS PROVIDED BY ITFG


• Applicability of Ind AS due to increase in net worth after 31 March 2014

• Applicability of Ind AS on subsequent change in status as subsidiaries

• Applicability of Ind AS to an Indian sub of a foreign co

• Clarification on adoption of transition date

• Compliance of Ind-AS by companies with negative net worth

RBI’S ROADMAP- BANKS (SCBS)

Effective date of implementation: 1 April 2018 (comparatives for F.Y.2017-18)

Criteria for affiliates: Notwithstanding the MCA roadmap, the affiliates of SCBs (excluding RRBs) would prepare Ind AS FS for accounting periods beginning from 1 April 2018 onwards

Early adoption: Not permitted

Applicability to SFS and CFS: Applicable to both SFS and CFS


RBI’S ROADMAP- BANKS (SCBS)

• Regulatory reporting:

- Assess the impact of implementation and place quarterly progress

reports to their Boards.

- Submit proforma Ind AS FS to the RBI from the half-year ended 30

September 2016, onwards latest by 30 November 2016.

- Disclose in AR the strategy for Ind AS implementation, including the

progress made from the FY 2016-17 until implementation.


RBI’S ROADMAP- AIFIS


Criteria for affiliates: Not mentioned

Early adoption: Not permitted

Applicability to SFS and CFS: Applicable to both SFS and CFS


RBI’S ROADMAP- AIFIS

Regulatory reporting:

• Assess the impact of implementation and place quarterly progress reports to

their Boards.

• Submit proforma Ind AS FS to the RBI from the half-year ended 30 September

2016, onwards latest by 30 November 2016, except in case of NHB where

proforma Ind AS FS for the half year ended 31 December 2016 can be

submitted latest by 28 February 2017.

• Disclose in AR of the strategy for Ind AS implementation, including the

progress made from the financial year 2016-17 until implementation.


RBI’S ROADMAP- NBFCS

Effective date of implementation:

Criteria for affiliates: When an NBFC gets covered under NBFC roadmap, its affiliates, other than those companies already covered under the MCA roadmap would also prepare Ind AS FS from that year.

Early adoption: Not permitted. However, NBFCs are allowed to provide Ind AS compliant FS data for preparation of CFS by its parent/investor.


2018-19 Listed Unlisted (comparatives for 2017-18) (Net worth 500 cr or more) (Net worth 500 cr or more)

2019-20 Listed Unlisted (comparatives for 2018-19) (Net worth less than 500 cr) (Net worth 250 cr or more

but less than 500 cr)

IRDAI’S ROADMAP- INSURANCE COMPANIES


Criteria for affiliates: Not mentioned.

Early adoption: Not permitted. However, insurance companies are allowed to

provide Ind AS compliant FS data for preparation of CFS by its parent/investor.

Applicability to SFS & CFS: Applicable to both SFS and CFS.


IRDAI’S ROADMAP- INSURANCE COMPANIES

Regulatory Reporting:

• Insurers shall assess the impact of the Ind AS and place quarterly progress reports to their Boards.

• Submit proforma Ind AS FS to the Authority from the quarter ended 31 December 2016.

• Disclose the strategy for Ind AS implementation, including the progress made in this regard from the financial year 2015-16 onwards until implementation.


03ROADMAP- THE COMPARISON


APPLICABILITY OF ROADMAP


CorporatesScheduled

Commercial Banks

NBFCAIFIs Insurance Companies

2016-17 Listed Unlisted (comparative for 2015-16)

(Net worth => 500 Cr)


2017-18 Listed Unlisted

(comparative for 2016-17)

(Net worth 0 - <500 Cr)

(Net worth >=250cr -<500cr)

2018-19 SCBs (excludi

ng RRBs)


2018-19 AIFI's (Exim bank,

NABARD, NHB & SIDBI

(Comparitives for 2017-18

2018-19 Listed Unlisted (comparative for 2017-18)



2019-20 Listed Unlisted


(Net worth<500 Cr)

(Net worth >=250cr -<500cr)

2018-19 Insurers and

Insurance

companies


CorporatesScheduled

Commercial Banks


When a company gets covered under this MCAroadmap, company's affiliates (irrespective oftheir net worth) would also prepare Ind AS FS from that year

Notwithstanding the MCA roadmap, the affiliates of SCBs (excluding RRBs) would prepare Ind AS FS for accounting periods beginning from 1 April 2018 onwards

When an NBFC gets covered under NBFC roadmap, its affiliates, other than those companies already covered under the MCA roadmap would also prepare Ind AS FS from that year

Not mentioned Not mentioned

CRITERIA FOR AFFILIATES


Once adopted, option can not be revoked

However, NBFCs are allowed to provide Ind AS compliant FS data for preparation of CFS by its parent/ investor

However, Insurance companies are allowed to provide Ind AS compliant FS data for preparation of CFS by its parent/ investor

CorporatesScheduled

Commercial Banks


EARLY ADOPTION

04IND AS VS IFRS-LISTING


IND AS VS. IFRS

IAS/IFRS Title Ind AS

IAS 1 Presentation of Financial Statement 1IAS 2 Inventories 2IAS 7 Statement of Cash Flows 7IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors 8IAS 10 Events after the Reporting Period 10IAS 11 Construction Contracts 11 IAS 12 Income Taxes 12IAS 16 Property, Plant and Equipment 16IAS 17 Leases 17IAS 18 Revenue 18 IAS 19 Employees Benefits 19IAS 20 Accounting for Governments Grants and disclosure of

Government Assistance20

IAS 21 The Effects if Changes in Foreign Exchange Rates 21IAS 23 Borrowing Costs 23IAS 24 Related Party Disclosures 24IAS 27 Separate Financial Statements 27IAS 28 Investments in Associates and Joint Ventures 28IAS 29 Financial Reporting in Hyperinflationary Economics 29IAS 32 Financial Instruments: Presentation 32IAS 33 Earnings Per Share 33

IND AS VS. IFRS

IAS/IFRS Title Ind AS

IAS 34 Interim Financial Reporting 34IAS 36 Impairment of Assets 36IAS 37 Provisions, Contingent Liabilities and Contingent Assets 37IAS 38 Intangible Assets 38IAS 40 Investment Property 40IAS 41 Agriculture 41IFRS 1 First-time adoption of Indian Accounting Standards 101IFRS 2 Share-Based Payments 102IFRS 3 Business Combinations 103IFRS 4 Insurance Contracts 104IFRS 5 Non-Current Assets Held for Sale and Discontiunued

Operations105

IFRS 6 Exploration for and Evaluation of Mineral Resources 106IFRS 7 Financial Instruments: Disclosures 107IFRS 8 Operating Segments 108IFRS 9 Financial Instruments 109 IFRS 10 Consolidated Financial Statements 110IFRS 11 Joint Arrangements 111IFRS 12 Disclosure of Interests in Other Entities 112IFRS 13 Fair Value Measurement 113IFRS 14 Regulatory Deferral Accounts 114

26

05KEY FOCUS AREAS


FOCUS AREAS

Financial reporting factors


• Accounting Practices

• Tax Implications

• Group Policies

• The Industry Peers

• Management Strategies

FOCUS AREASNon- Financial reporting factors


• Company Personnel

• Training Needs

• Human Resources System

• Treasury and Finance Function

• IT Systems

• Stakeholders Expectations

06LEARNING FROM GLOBAL PEERS


LEARNING FROM GLOBAL PEERS


Lack of co-ordination

between project teams and business segments

Inferior project management

system.

Absence or lack of adequate

support from the senior

management at the early stage of

the project.

Failure of timely updating the

modified numbers into the systems.

Lack of technical training and

misunderstanding the results.

Non-involvement of tax personnel

at all levels during conversion process.

The quantum, complications and

the related timeframe of the

project were undermined.

Underestimating the marginal accounting

differences, which turned into

significant items

THANK [email protected]

7 October 2016

Titre de la présentation32

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