Implementing Ind As can be tricky, but you can see significant benefits with the proper guidance. However, one crucial question stands out: how do you implement Ind As? This introductory article will help you break down the implementation process and get your Ind As off to the right start. Read on to learn about the following topics: why Ind As are essential, what Ind As are, and what phase you’re in as you work towards implementing Ind As in your business or organization.
What is Ind AS?
The Indian Accounting Standards (or Ind AS) notified under Section 133 of the Companies Act 2013 had been formulated keeping in view the legal environment and Indian economy and converging with IFRS standards issued by IFRS Foundation, the copyright of which is held by IFRS Foundation. The objective of this (Ind AS) is to formulate principles for the preparation & presentation of consolidated financial statements when an entity controls one or more other entities.
The three phases of implementing Ind AS
The first phase of implementing Ind AS is the preparatory phase which prepares a company for the changes.
The second phase is the information collection phase. This is where companies discover all there is to know about their processes before changing anything.
The third and final phase of implementation is called restructuring. This entails changing your company to fit with the new rules set in place by Ind AS. During this time, you will have people going around and auditing every process to see if it complies with the new standards. If not, it will be changed until it does comply.
The benefits of implementing Ind AS
The Indian Accounting Standards (Ind AS) were first implemented in April 2015 to promote transparency and comparability of financial information. This set of accounting standards will supersede the existing company law and accounting practices. This change aims to align India’s accounting practices with international standards to ensure a fair representation of financial statements. Upon implementation of these standards, companies will be required to segregate their current assets from non-current assets on their balance sheets.
The challenges of implementing Ind AS
Indian accounting firms have struggled to prepare businesses for the changes from IFRS to Indian standards. The implementation of Ind AS has been a challenging process for many companies. Along with these challenges, both small- and medium-sized enterprises (SMEs) must be made aware of the changes so they can plan. These SMEs make up 95% of India’s economic output and employment.
To help bridge the knowledge gap among SMEs, the Accounting Standards Board will host Mumbai sessions starting this month. They will focus on three main areas: one day each on current international accounting practices, tax implications under IFRS or Ind AS, and financial reporting under Ind AS.
THE CLOSING DECLARATION
Implementing Ind AS in an organization can be complex and challenging, but it’s essential to understand what’s involved before diving into the details. This document outlines the process of implementing Ind AS, including the different phases and required steps. After reading this document, you will be well-prepared to face the challenges of implementing Ind AS in your organization.
This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.