Ind AS vs IFRS — Key Differences Explained
Ind AS vs IFRS: what are Ind AS standards, how they differ from IFRS, which companies must follow Ind AS in India, key differences table, and what this means for finance professionals.
What is Ind AS?
Ind AS (Indian Accounting Standards) are India's accounting standards, converged with IFRS but with certain modifications to suit India's legal, regulatory, and economic context. Ind AS is issued by the Ministry of Corporate Affairs (MCA) based on recommendations from the Institute of Chartered Accountants of India (ICAI).
India adopted a "convergence" approach rather than full adoption of IFRS — meaning Ind AS is substantially based on IFRS but includes carve-outs and additions specific to India.
Which Companies Must Follow Ind AS?
| Category | Applicability |
|---|---|
| Listed companies + companies with net worth ≥ ₹250 crore | Mandatory Ind AS from 2016–17 |
| Unlisted companies with net worth ≥ ₹500 crore | Mandatory from 2017–18 |
| NBFCs with net worth ≥ ₹500 crore | Mandatory from 2018–19 |
| Scheduled commercial banks, insurance companies | Separate RBI/IRDAI roadmap |
| Smaller companies (below thresholds) | Still follow AS (Indian GAAP) |
Companies that are subsidiaries, associates, or joint ventures of companies required to follow Ind AS are also required to comply.
Key Differences: Ind AS vs IFRS
| Topic | IFRS | Ind AS (India carve-out) |
|---|---|---|
| IFRS 1 (First-time adoption) | Standard first-time adoption exemptions | Additional exemptions for Indian companies on first-time adoption |
| Property, Plant and Equipment | IAS 16 — standard IFRS | Ind AS 16 — permits deemed cost using Indian GAAP carrying amount on transition |
| Financial Instruments (IFRS 9) | ECL model; FVTPL, FVOCI, amortised cost | Ind AS 109 — substantially same but RBI carve-outs for banks on ECL transition |
| Business Combinations | IFRS 3 — full acquisition method | Ind AS 103 — business combinations under common control use book value method (IFRS 3 carve-out) |
| Revenue (IFRS 15) | Standard IFRS 15 | Ind AS 115 — substantially same; additional guidance for real estate sector |
| Leases (IFRS 16) | All leases on balance sheet | Ind AS 116 — same as IFRS 16 |
| Dividends | Recognised when declared | Ind AS — dividend distribution tax (DDT) treatment differs; recognised when approved by shareholders |
| Insurance Contracts | IFRS 17 | Ind AS 117 deferred; insurance companies use Ind AS 104 (older version) |
Ind AS vs IFRS — For Finance Professionals
If you work at:
- Indian listed company or large unlisted company: You will work with Ind AS — understanding the carve-outs is essential
- Multinational with Indian subsidiary: You will prepare Ind AS financials for the subsidiary, then convert to IFRS (or US GAAP) for consolidation
- Big 4 or audit firm: You need to understand both Ind AS and IFRS, and the reconciling differences
- ACCA students: ACCA curriculum covers full IFRS — you need to separately understand how Ind AS differs for work in India
Will India Fully Adopt IFRS?
India's position remains convergence rather than full adoption. The key reason: India's legal and regulatory framework (Companies Act, SEBI regulations, RBI guidelines) requires certain modifications that prevent identical adoption. Full convergence is the stated goal, with the gap narrowing over time.
ACCA professionals working in India should understand both IFRS (for the qualification) and Ind AS (for Indian practice). Explore ACCA with Learnsignal.
Further Reading
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Learnsignal Education Team
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