The Reserve Bank has deferred the implementation of the Indian Accounting Standards (Ind AS)

• The Reserve Bank of India (RBI) decided to defer implementation of Indian Accounting Standard (Ind AS) by one year for the banks.
• Scheduled commercial banks (SCBs), excluding regional rural banks (RRBs), were required to implement Ind AS from April 1, 2018.
• In a note in January, India Ratings estimates had pointed out that SCBs may need up to Rs 89,000 crore towards incremental provisioning for advances while transiting to the Ind AS 109 regimes.
• Of this, public sector Banks (PSBs) were required Rs 63,100 crore, which were equivalent to an equity write down of 1.10 per cent of the banks’ risk weighted assets and 11.5 per cent of net worth at end-March 2017.

About Indian Accounting Standards:

• India is changing its accounting standards from generally accepted accounting principles (GAAP) to Indian Accounting Standards (Ind-AS) from April 2016.
• Adoption of the new Indian Accounting Standards (IndAS) which bring in the concept of fair valuation and greater rigour on accounting for the substance of a transaction rather than its form.
• All listed companies (except those listed on the Small & Medium Enterprises Exchange) and unlisted companies with net worth exceeding R250 crore, including group companies, will be required to mandatorily adopt IndAS in a phased manner.
• These standards are set of accounting standards notified by the Ministry of Corporate Affairs which are converged with International Financial Reporting Standards (IFRS).
• This standard is followed by all companies other than the insurance companies, banking companies and NBFCs.

A complete set of financial statements under Ind AS comprises:

• A balance sheet as at the end of the period.
• Statement of profit and loss.
• Statement of changes in equity.
• A statement of cash flows.
• Notes including summary of accounting policies and other explanatory information.

By: Vishal