Ind AS Applicability in India: Who Must Adopt and What Changes

Indian Accounting Standards, or Ind AS, are India's IFRS-converged accounting standards. They don't apply to every company — but group relationships bring many smaller companies into their scope. This guide explains who must adopt Ind AS and what changes when they do.

Who Must Follow Ind AS

Under the Companies (Indian Accounting Standards) Rules, 2015, Ind AS applies to:

• Companies whose securities are listed, or in the process of being listed, on a stock exchange in India or abroad — other than companies listed on SME exchanges.
• Unlisted companies with a net worth of ₹250 crore or more.
• Holding, subsidiary, joint venture and associate companies of any of the above.

Once a company meets the criteria, it must follow Ind AS from the specified financial year, with comparatives for the previous year.

Group Companies Get Pulled In

A small private company can have to follow Ind AS simply because it's a subsidiary or associate of a company that does. This is the most common way smaller companies find themselves in scope — often after an acquisition or investment.

Voluntary Adoption

Any company can choose to adopt Ind AS voluntarily. But the decision is permanent: once a company follows Ind AS, it must keep doing so, even if it later falls below the thresholds.

First-time Adoption Under Ind AS 101

Ind AS 101 sets how a company moves from the old standards to Ind AS. It prepares an opening Ind AS balance sheet at the transition date — the start of the comparative year — applying Ind AS retrospectively, subject to specified exemptions and exceptions. Its first Ind AS financial statements include reconciliations explaining how equity and profit changed.

Areas Where Numbers Commonly Change

• Revenue from contracts with customers, which can change when revenue is recognised.
• Leases, with most leases brought onto the balance sheet as a right-of-use asset and lease liability.
• Financial instruments, with more items at fair value and receivables provided for on an expected credit loss basis.
• Business combinations, with acquired intangibles and goodwill measured differently.
• Employee benefits and share-based payments, including ESOPs.

Tax and Other Effects

Tax is still computed under the Income-tax Act, but with specific provisions for how Ind AS transition and ongoing adjustments are treated. Changes in reported profit and net worth can also affect loan covenants and ratios.

Getting Help

Think Filing confirms Ind AS applicability, manages first-time adoption, and helps finance teams embed Ind AS reporting going forward.