“Thank God I didn’t take up an MBA Degree”!

By the time you read this, a college graduate will be filling out forms of various MBA institutes, and shuffling lakhs of rupees on its fees for the obvious reasons we know – considerable popularity- good jobs availability- better salary- good marriage proposals – making Sharma aunty jealous, etcetera, etcetera. No wonder, MBA is the ‘GO-TO’ degree that graduates take up blindfoldedly, pre-assuming this degree would spike up their career graphs and land them in jobs they have always dreamt of.

We bring you the story of Payal Bahirwani, who, like every second graduate was once a potential target of MBA institutes. Today she has advanced her accounting career, catapulted her practical experience while being internationally recognized, joined the world’s largest accountants association that has its expanse in over 170 countries, all this happened in just 2 years, but not with an MBA. No, you won’t have to wait for a conclusion part like Bahubali- the story unfolds as you read on. Yes- it’s equally exciting as Bahubalis’ conclusion- keep your popcorn ready!

Always been a bright student, specially accounting and finance, Payal was all set to trace her career goals. With sheer determination of following her dreams of maximizing her potential and achieving senior roles, she started preparing for an MBA degree.

Whoever she knew in her circle was either doing CA or taking up MBA.  She too was kind of “following the herd”. But, life had some other plans for her! She came across articles that read the downfall of MBAs, and how 90% of MBAs in India are unemployable owing to the lack of practical skills and connect between what they are taught in colleges. Most of these MBAs were earning a measly 8000 to 10,000 rupees per month-that too, only when they could find placements.  Also, she was concerned on how spending lakhs on her education would be a good deal in the first place.

It dawned upon her that she needed a degree that guarantees her employment and makes her industry-ready. She was confused and found herself on the cross-roads of her career. Fortunately, she landed herself on an Online Ad that flashed with big bold letters- ACCA. (the Association of Chartered Certified Accountants). Being a number-cruncher at heart, she was drawn towards it in no time. After thorough research and guidance from mentors, she found out that ACCA was a more student-friendly, affordable and flexible course that concentrates not only on theory but also on the application of concepts. She was attracted to the fact that ACCA provides global recognition, making her an asset for growing MNCs and Big 4s in India. She realized what she wanted to be- an ACCA. She requested a callback from EduPristine’s ACCA Program– an authorized training provider of ACCA qualification, they guided her towards achieving the ACCA membership.

Today, she is a proud ACCA topper in Foundation Papers conducted during her 2016 sessions. As seen in the picture, with twinkle in her eyes, and sparkle in her smile, she is all set to conquer the Accounting world. Are you? If yes, know more on how to get skilled-up with ACCA, click here.

ACCA Eligibility

The Association of Chartered Certified Accountants (ACCA) is the global body of professional accounting. It was founded in 1904. ACCA offers the globally
recognized Chartered Certified Accountant qualification (ACCA or FCCA). ACCA has its head office in London and the principal administrative office in
Glasgow. ACCA operates through 91 branch offices and centers. ACCA has a global network of over 8,500 Approved Employers providing employee development.
ACCA has more than 170,000 members and 436,000 students across 180 countries. ACCA focuses on encompassing highest standard of business-related
qualifications to individuals who wish to excel in the field of accountancy and finance.

In India, ACCA is gaining importance for those who are keen on building their career in the area of accountancy and business skills. The organizations are
also keen on going global for which they need expertise to manage their resources and business activities at a global platform.

ACCA Eligibility Criteria in India:

The minimum requirements in India to register for ACCA are stated below:



10+2 / India School Certificate / Intermediate Certificate / Higher School Certificate / Higher Secondary Certificate / Pre-University

Sufficient for registration

(providing passes are held in 5 subjects (at least 3 in Year XII) including English and Mathematics / Accounts, mark of 65% in at least 2
subjects and over 50% on the others)

(For the Higher Secondary Certificate the marks are out of 200, so over 130 meets the 65% requirement and over 100 meets the 50%

Below is a breakdown of the grades in terms of percentage and actual grade.

50%-60% = Satisfactory = C1

60%-70% = Good = B2

85%+, 80%-85%, 70%-80% = A1–A2, B1

All India Senior School Certificate/Senior Secondary School Examination

Sufficient for registration

(providing passes are held in 5 subjects including English and Mathematics / Accounts, mark of 65% in at least 2 subjects and over 50% on
the others)

Polytechnics / College of Technology Diploma (Two years)

Sufficient for Registration


The students who have already studied relevant qualifications can get exemptions from Foundation level Qualification and of the ACCA Qualification. A student can get exemption from a maximum of nine papers of the fundamentals level depending upon the earlier qualification. But to ensure that the standards of ACCA are maintained, there are no exemptions from the ACCA Professional level exams.

ACCA Exam Structure and Pattern

ACCA doesn’t have a single definite pattern for all of its exams. Broadly the entire ACCA Exam Structure and Pattern are divided into different levels and modules and the ACCA Course pattern varies with them and within them. Let’s try to understand it from the beginning.

ACCA Modules and Levels:

ACCA Exams are primarily divided into two levels, Fundamentals and Professional.

The Fundamentals level has a total of 9 papers/subjects and they are divided into two modules: Knowledge and Skills

The Knowledge module has 3 papers and deals with the main areas of financial and management accounting. You will study the accountancy areas in greater detail in greater detail after you have studied this. There are six subjects in the Skills module which cover the main technical areas that accountants are expected to know.

Knowledge Module:

F1 – Accountant in Business

F2 – Management Accounting

F3 – Financial Accounting

Skills Module:

F4 – Corporate and Business Law

F5 – Performance Management

F6 – Taxation

F7 – Financial Reporting

F8 – Audit and Assurance

F9 – Financial Management

The Professional level is also made up of two modules; Essentials and Options. Both of the modules are at Professional level and have been set at the same ability level as a Masters degree.

This level builds on the technical knowledge you will already have gained through the Fundamentals level. It will also explore more advanced professional skills, techniques and values. These are required at a senior level by accountants working in an advisory or consultancy role.

All students have to pass the three papers in the Essentials module. The Options module contains four papers, but you only need to complete two.Essentials

P1 – Governance, Risk and Ethics

P2 – Corporate Reporting

P3 – Business Analysis

Options (two to be completed)

P4 – Advanced Financial Management

P5 – Advanced Performance Management

P6 – Advanced Taxation

P7 – Advanced Audit and Assurance

Besides these two levels, there’s a professional ethics module which has to be cleared to become ACCA certified. This module is open once you have cleared Fundamentals level and entered the professional level.

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ACCA Exam Pattern:

As said earlier, the exam pattern varies for each level and module and within modules. Here’s a table giving out the details for each of the exams:

Exam Syllabus covered Duration/exam type Exam pattern
F1 Governance, Risk and Ethics 2hrs/PBE(or)CBE The exam contains 2 sections:Section A will contain 30 two mark objective questions and 16 one mark objective questions. Section B will contain 6 four mark multitask questions each of which will examine one of the six main sections of the F1 syllabus.
F2 Management Accounting 2hrs/PBE(or)CBE The examination will consist of two sections. Section A will contain 35 two mark objective questions. Section B will contain 3 ten mark multi-task questions each of which will examine Budgeting, Standard costing and Performance measurement sections of the syllabus.
F3 Financial Accounting 2hrs/PBE(or)CBE The examination will consist of two sections. Section A will contain 35 two mark objective questions. Section B will contain 2 fifteen mark multi-task questions. These will test consolidations and accounts preparation. The consolidation question could include a small amount of interpretation and the accounts preparation question could be set in the context of a sole trader or a limited company.
F4 Corporate and Business Law
F5 Performance Management 3hrs/PBE Section A of the exam comprises 20 multiple choice questions of 2 marks each. Section B of the exam comprises three 10 mark questions and two 15 mark questions. The two 15 mark questions will come from decision making techniques, budgeting and control and or performance measurement and control areas of the syllabus. The section A questions and the other questions in section B can cover any areas of the syllabus. Candidates are provided with a formulae sheet.
F6 Taxation 3hrs/PBE The paper will be predominantly computational and will have five questions, all of which will be compulsory.Question one will focus on income tax and question two will focus on corporation tax. The two questions will be for a total of 55 marks, with one of the questions being for 30 marks and the other being for 25 marks.

Question three will focus on chargeable gains (either personal or corporate) and will be for 15 marks.

Questions four and five will be on any area of the syllabus, can cover more than one topic, and will be for 15 marks.

F7 Financial Reporting 3hrs/PBE Section A of the exam comprises 20 multiple choice questions of 2 marks each.
Section B of the exam comprises two 15 mark questions and one 30 mark question.
The 30 mark question will examine the preparation of financial statements for either a single entity or a group.
The section A question and the other questions in section B can cover any areas of the syllabus. An individual question may often involve elements that relate to different subject areas of the syllabus
F8 Audit and Assurance 3hrs/PBE The exam will be structured in two sections.
Section A will contain 8 two mark and four one mark objective test questions assessing the breadth of the syllabus.
Section B will contain four 10 mark questions and two 20 mark questions.
F9 Financial Management 3hrs/PBE Exam has two sections:
Section A of the exam comprises 20 multiple choice questions of 2 marks each.
Section B of the exam comprises three 10 mark questions and two 15 mark questions. The two 15 mark questions will come from workingcapital management, investment appraisal andbusiness finance areas of the syllabus.
The section A questions and the other questions in section B can cover any areas of the syllabus.
P1 Governance, Risk and Ethics 3hrs/PBE The examination paper will be structured in two sections.Section A will be based on a case study style question comprising a compulsory 50 mark question, with requirements based on several parts with all parts relating to the same case information. The case study will usually assess a range of subject areas across the syllabus and will require the candidate to demonstrate high level capabilities to evaluate, relate and apply the information in the case study to several of the requirements.

Section B comprises three questions of 25 marks each, of which candidates must answer two. These questions will be more likely to assess a range of discrete subject areas from the main syllabus section headings, but may require application, evaluation and the synthesis of information contained within short scenarios in which some requirements may need to be contextualised.

P2 Corporate Reporting 3hrs/PBE The examination paper will be structured in two sections.
Section A will consist of one scenario based question worth 50 marks. It will deal with the preparation of consolidated financial statements including group statements of cash flows and with issues in financial reporting. Students will be required to answer two out of three questions.
In Section B, has 3 questions out of which 2 have to be answered, they will be scenario or case-study based and one essay question which may have some computational element. Section B could deal with any aspects of the syllabus.
P3 Business Analysis 3hrs/PBE The examination paper will be structured in two sections.
Section A contains one multi-part question based on a case study scenario. This question is worth 50 marks.
Section B will consist of three discrete questions each worth 25 marks. Candidates must answer two questions from this section.
P4 Advanced Financial Management 3hrs/PBE The examination paper will be structured in two sections.
Section A will contain a compulsory question, comprising of 50 marks. Section A will normally cover significant issues relevant to the senior financial manager or advisor and will be set in the form of a case study or scenario. Within this question candidates will be expected to provide answers in a specified form such as a short report or board memorandum commensurate with the professional level of the paper in part or whole of the question.
In section B candidates will be asked to answer twofrom three questions, comprising of 25 marks each.Section B questions are designed to provide a morefocused test of the syllabus. Questions will normallycontain a mix of computational and discursiveelements, but may also be wholly discursive orevaluative where computations are alreadyprovided.
P5 Advanced Performance Management 3hrs/PBE The examination paper will be structured in two sections.
Section A will contain one compulsory question comprising of 50 marks
In section B candidates will be asked to answer two from three questions comprising of 25 marks each
P6 Advanced Taxation 3hrs/PBE + 15 mins of planning and reading. Section A consists of two compulsory questions. Question 1 has 35 marks, including 4 professional marks, and question 2 has 25 marks
Section B consists of three 20-mark questions, two of which must be answered. Questions will be scenario based and will normally involve consideration of more than one tax, together with some elements of planning and the interaction of taxes. Computations will normally only be required in support of explanations or advice and not in isolation.
P7 Advanced Audit and Assurance 3hrs/PBE Section A questions will be based on ‘case study’ type questions, there will be 2 compulsory questions.
Different types of question will be encountered in Section B and will tend to be more focussed on specific topics, for example ‘auditor’s reports’, ‘quality control’ and topics of ISAs which are not examinable in Paper F8, Audit and Assurance. (This does not preclude these topics from appearing in Section A). Current issues will be examined across a number of questions.

Financial Reporting

In any industry, whether manufacturing or service, we have multiple departments, which function day in day out to achieve organizational goals. The functioning of these departments may or may not be interdependent, but at the end of day they are linked together by one common thread – Accounting & Finance department. The accounting & financial aspects of each and every department are recorded and are reported to various stakeholders. There are two different types of reporting – Financial reporting for various stakeholders & Management Reporting for internal Management of an organization. Both these reporting are important and are integral part of Accounting & reporting system of an organization. But considering the number of stakeholders involved and statutory & other regulatory requirements, Financial Reporting is very important and critical task of an organization. It is vital part of Corporate Governance. Let’s discuss about various aspects of Financial Reporting in following paragraphs.

Definition of Financial Modeling

Financial Reporting involves the disclosure of financial information to the various stakeholders about the financial performance and financial position of the organization over a specified period of time. These stakeholders include – investors, creditors, public, debt providers, governments & government agencies. In case of listed companies the frequency of financial reporting is quarterly & annual.
Financial Reporting is usually considered as end product of Accounting. The typical components of financial reporting are:

  1. The financial statements – Balance Sheet, Profit & loss account, Cash flow statement & Statement of changes in stock holder’s equity
  2. The notes to financial statements
  3. Quarterly & Annual reports (in case of listed companies)
  4. Prospectus (In case of companies going for IPOs)
  5. Management Discussion & Analysis (In case of public companies)

The Government and the Institute of Chartered Accounts of India (ICAI) have issued various accounting standards & guidance notes which are applied for the purpose of financial reporting. This ensures uniformity across various diversified industries when they prepare & present their financial statements. Now let’s discuss about the objectives & purposesof financial reporting.

Objectives of Financial Reporting

According to International Accounting Standard Board (IASB), the objective of financial reporting is “to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions.

The following points sum up the objectives & purposes of financial reporting –

  1. Providing information to management of an organization which is used for the purpose of planning, analysis, benchmarking and decision making.
  2. Providing information to investors, promoters, debt provider and creditors which is used to enable them to male rational and prudent decisions regarding investment, credit etc.
  3. Providing information to shareholders & public at large in case of listed companies about various aspects of an organization.
  4. Providing information about the economic resources of an organization, claims to those resources (liabilities & owner’s equity) and how these resources and claims have undergone change over a period of time.
  5. Providing information as to how an organization is procuring & using various resources.
  6. Providing information to various stakeholders regarding performance of management of an organization as to how diligently & ethically they are discharging their fiduciary duties & responsibilities.
  7. Providing information to the statutory auditors which in turn facilitates audit.
  8.  Enhancing social welfare by looking into the interest of employees, trade union & Government.

Now let’s discuss few aspects about importance of financial reporting.

Importance of Financial Reporting

The importance of financial reporting cannot be over emphasized. It is required by each and every stakeholder for multiple reasons & purposes. The following points highlights why financial reporting framework is important –

  1. In helps and organization to comply with various statues and regulatory requirements. The organizations are required to file financial statements to ROC, Government Agencies. In case of listed companies, quarterly as well as annual results are required to be filed to stock exchanges and published.
  2. It facilitates statutory audit. The Statutory auditors are required to audit the financial statements of an organization to express their opinion.
  3. Financial Reports forms backbone for financial planning, analysis, bench marking and decision making. These are used for above purposes by various stakeholders.
  4. Financial reporting helps organizations to raise capital both domestic as well as overseas.
  5. On the basis of financials, the public in large can analyze the performance of the organization as well as of its management.
  6. For the purpose of bidding, labor contract, government supplies etc., organizations are required to furnish their financial reports & statements.


So we can conclude from the above points that financial reporting is very important from various stakeholders point of view. At times for large organizations it becomes very complex but the benefits are far more than such complexities. We can say that financial reporting contains reliable and relevant information which are used by multiple stakeholders for various purposes. A sound & robust financial reporting system across industries promotes good competition and also facilitates capital inflows. This in turn helps in economic development.

Amalgamation Explained in detail

What is Amalgamation?

Amalgamation is defined as the combination of one or more companies into a new entity. It includes:

  1. Two or more companies join to form a new company
  2. Absorption or blending of one by the other

Thereby, amalgamation includes absorption.

However, one should remember that Amalgamation as its name suggests, is nothing but two companies becoming one. On the other hand, Absorption is the process in which the one powerful company takes control over the weaker company.

Generally, Amalgamation is done between two or more companies engaged in the same line of activity or has some synergy in their operations. Again the companies may also combine for diversification of activities or for expansion of services

Transferor Company means the company which is amalgamated into another company; while Transferee Company means the company into which the transferor company is amalgamated.

Existing companies A and B are wound up and a new company C is formed to take over the businesses of A and B Amalgamation
Existing company A takes over the business of another existing company B which is wound up Absorption
A New Company X is formed to take over the business of an existing company Y which is wound up. External reconstruction

How is Amalgamation different from a Merger?

Amalgamation is different from Merger because neither of the two companies under reference exists as a legal entity. Through the process of amalgamation a completely new entity is formed to have combined assets and liabilities of both the companies.

Types of Amalgamation

  1. Amalgamation in the nature of merger:

    In this type of amalgamation, not only is the pooling of assets and liabilities is done but also of the shareholders’ interests and the businesses of these companies. In other words, all assets and liabilities of the transferor company become that of the transferee company. In this case, the business of the transferor company is intended to be carried on after the amalgamation. There are no adjustments intended to be made to the book values. The other conditions that need to be fulfilled include that the shareholders’ of the vendor company holding atleast 90% face value of equity shares become the shareholders’ of the vendee company.

  2. Amalgamation in the nature of purchase:

    This method is considered when the conditions for the amalgamation in the nature of merger are not satisfied. Through this method, one company is acquired by another, and thereby the shareholders’ of the company which is acquired normally do not continue to have proportionate share in the equity of the combined company or the business of the company which is acquired is generally not intended to be continued.

If the purchase consideration exceeds the net assets value then the excess amount is recorded as the goodwill, while if it is less than the net assets value it is recorded as the capital reserves.

Why Amalgamate?

  1. To acquire cash resources
  2. Eliminate competition
  3. Tax savings
  4. Economies of large scale operations
  5. Increase shareholders value
  6. To reduce the degree of risk by diversification
  7. Managerial effectiveness
  8. To achieve growth and gain financially

Procedure for Amalgamation

  1. The terms of amalgamation are finalized by the board of directors of the amalgamating companies.
  2. A scheme of amalgamation is prepared and submitted for approval to the respective High Court.
  3. Approval of the shareholders’ of the constituent companies is obtained followed by approval of SEBI.
  4. A new company is formed and shares are issued to the shareholders’ of the transferor company.
  5. The transferor company is then liquidated and all the assets and liabilities are taken over by the transferee company.

Accounting of Amalgamation

  1. Pooling of Interests Method:

    Through this accounting method, the assets, liabilities and reserves of the transferor company are recorded by the transferee company at their existing carrying amounts.

  2. Purchase Method:

    In this method, the transferee company accounts for the amalgamation either by incorporating the assets and liabilities at their existing carrying amounts or by allocating the consideration to individual assets and liabilities of the transferor company on the basis of their fair values at the date of amalgamation.

Computation of purchase consideration: For computing purchase consideration, generally two methods are used:

  1. Purchase Consideration using net asset method: Total of assets taken over and this should be at fair values minus liabilities that are taken over at the agreed amounts.

    Particulars Rs.
    Agreed value of assets taken over XXX
    Less: Agreed value of liabilities taken over XXX
    Purchase Consideration XXX

    Agreed value means the amount at which the transferor company has agreed to sell and the transferee company has agreed to take over a particular asset or liability.

  2. Purchase consideration using payments method: Total of consideration paid to both equity and preference shareholders in various forms.

    Example: A. Ltd takes over B. Ltd and for that it agreed to pay Rs 5,00,000 in cash. 4,00,000 equity shares of Rs 10 each fully paid up at an agreed value of Rs 15 per share. The Purchase consideration will be calculated as follows:

    Particulars Rs.
    Cash 5,00,000
    4,00,000 equity shares of Rs10 fully paid up at Rs15 per share 60,00,000
    Purchase Consideration 65,00,000

Advantages of Amalgamation

  • Competition between the companies gets eliminated
  • R&D facilities are increased
  • Operating cost can be reduced
  • Stability in the prices of the goods is maintained

Disadvantages of Amalgamation

  • Amalgamation may lead to elimination of healthy competition
  • Reduction of employees may take place
  • There could be additional debt to pay
  • Business combination could lead to monopoly in the market, which is not always positive
  • The goodwill and identity of the old company is lost

Recently announced Amalgamation

One of the recent amalgamations announced on the corporate front is of PVR Ltd. Multiplex operator PVR Ltd has approved an amalgamation scheme between Bijli Holdings Pvt Ltd and itself to simplify PVR’s shareholding structure. As per the management, the purpose of the amalgamation is to simplify the shareholding structure of PVR and reduction of shareholding tiers. It also envisages demonstrating Bijli Holdings’ direct engagement with PVR. After the amalgamation, individual promoters will directly hold shares in PVR and there will be no change in the total promoters’ shareholding of PVR.

Other examples of Amalgamations

  1. Maruti Motors operating in India and Suzuki based in Japan amalgamated to form a new company called Maruti Suzuki (India) Limited.
  2. Gujarat Gas Ltd (GGL) is an amalgamation of Gujarat Gas Company Ltd (GGCL) and GSPC Gas.
  3. Satyam Computers and Tech Mahindra Ltd
  4. Tata Sons and the AIA group of Hongkong amalgamated to form Tata AIG Life Insurance.


Amalgamation is one of the tools that can help companies avoid competition among them and add to the market offerings. It is for the mutual advantage of the acquirer and acquired companies. It serves as an apt method of corporate restructuring to bring about a change for the better and make business environment competitive.

Roadmap of Convergence of Indian Accounting Standards with IFRS

Ind AS convergence with IFRS


Finally the wait is over. Indian Accounting Standards converged with IFRS are here. After issuing the revised roadmap for implementing Ind AS in January 2015, the Ministry of Corporate Affairs (MCA) has come up with the phase wise adoption of Ind AS, India’s Accounting Standards converged with IFRS. India has chosen the path of IFRS convergence and not adoption. The MCA has issued a notification dated 16 February 2015 announcing the Companies (Indian Accounting Standards) Rules, 2015 for the applicability of Ind AS. A total of 39 Ind AS has been notified. Now let’s look into the various aspects of Ind AS one by one.


The application of Ind AS is based on the listing status and net worth of a Company. Also these standards will be applied to various threshold companies in phased out manner. The below table summarises the various phase of application –

Phases Companies Date
1 Companies having Net worth of greater than or equal to INR 500 crore. 1 April 2016
2 Listed Companies and companies having Net worth of greater than or equal to INR 250 crore. 1 April 2017

– Companies covered under phase 1 will also require comparative Ind AS information for the period 1 April 2015 to 31 March 2016. So the companies under this phase have already started their Ind AS conversion planning and activities.

It is important to note that the Ind AS will also apply to subsidiaries, joint ventures, associates and holding companies of the entities covered in various phases. Companies not covered by the new Ind AS rules can voluntarily adopt Ind AS. Once adopted, they cannot switch back.


The following Companies are exempted from applying Ind AS –

  • Companies listed on SME exchanges.
  • Companies not covered by the new Ind AS rules will continue to apply the existing accounting standards.

Explanations/ Clarifications

The notification has clarified number of open points, few are stated below –

  • The date and manner of calculating net worth has been defined. The net worth needs to be calculated based on standalone financials of the company as on 31 March 2014 or first audited period ending thereafter. Net worth defined is similar to the one defined in section 2(57) of Companies Act 2013. It will be total of paid up share capital, reserves created out of profits (except revaluation and amalgamation reserve) and securities premium. From this we need to deduct accumulated losses, deferred and miscellaneous expenditure to the extent not written off.
  • Ind AS will apply to both consolidated and standalone financial statements of the company covered by the rule. This is very helpful as the companies will not be required to maintain dual accounting system.
  • Overseas subsidiaries, joint ventures and associates of an Indian Company which is covered by new Ind AS rule, are not required to prepare their standalone financials as per Ind AS. However, for the purpose of consolidation, such overseas entities should give Ind AS adjusted financials.
  • Insurances, banking and non- financial companies are not required to apply Ind AS either voluntarily or mandatorily.
  • In case of conflict with Ind AS and Law, the provisions of Law shall prevail and financial statements should be prepared in conformity with it.
  • Preparation of financial statements as per IFRS issued by IASB (true IFRS) has been ruled out

Comparison between Ind AS and IFRS

As stated earlier, India has chosen the path of IFRS conversion and not adoption. Therefore, there are few differences between Ind AS and IFRS. These are known as carve outs. These carve outs are there keeping in mind Indian economic environment and reporting requirements. A few are stated below –

  • Under Ind AS, only one statement comprising of both profit and loss and other comprehensive income will be presented. Unlike IFRS, there is no option to present other comprehensive income under a separate statement.
  • Ind AS allows presentation of expenses by nature only. Presentation of expenses by function is not allowed. Under IFRS, this is policy election.
  • Under Ind AS, earnings per share (EPS) are required to be presented for both standalone and consolidated financial statements. Under IFRS, earning per share is not required in separate financial statement if both separate and consolidated financial statements are presented.
  • Under Ind AS, the bargain purchase gain on business combination is to be recognised either in other comprehensive action or capital reserve but not profit and loss. Under IFRS, the same is recognised in profit and loss.
  • Under Ind AS, investment property is to be accounted using only cost model with fair value disclosure. Under IFRS, both cost and fair value options of accounting are available.

Future Ahead

Implementing Ind AS is likely to impact key performance metrics. Ind AS implementation can have wide range of impact on Company’s processes, systems, controls, financials, income taxes and agreements. The Companies need to carefully examine and evaluate the Ind AS transition provision and accounting policy elections. Indian Inc. now needs to get ready to embrace this transformation.