CONVERSION OF FINANCIALS STATEMENTS TO IND-AS / IFRS

Call Us Today +91 80000 57972

The Indian Accounting Standards (Ind AS) are structured in alignment with International Financial Reporting Standards (IFRS). The naming and numbering of Ind AS follow the same format as IFRS, ensuring consistency with global accounting practices.

Conversion of Financial Statements to IFRS/Ind AS
CONVERSION OF FINANCIALS STATEMENTS TO IND-AS / IFRS
form 26qb

Phone No - +91 80000 57972

Mail us at - [email protected]

Visit – www.kmgcollp.com


    Compliance with Ind AS is mandatory for certain companies in India that exceed a specified financial threshold. As a result, companies falling within this category must implement Ind AS for the presentation and disclosure of their financial statements. These standards have introduced significant changes in financial reporting, particularly in the recognition of income and expenses as well as the treatment of various items in the balance sheet.

    Methodology for Conversion to IFRS/Ind AS by KMG CO LLP

    KMG CO LLP follows a structured approach for converting financial statements to IFRS/Ind AS, ensuring compliance and accuracy. The key steps include:

    1. Initial Assessment:

      • Conducting a detailed evaluation to identify the accounting standards that will impact financial statements.

      • Comparing existing accounting standards with Ind AS to determine differences in recognition, measurement, disclosure, and classification.

    2. Implementation Support:

      • Providing guidance and assistance in addressing accounting differences during the transition.

      • Ensuring smooth adoption of Ind AS-compliant accounting policies and practices.

    3. Preparation of IFRS/Ind AS-Compliant Financial Statements:

      • Developing fully compliant financial statements as per Ind AS/IFRS.

      • Ensuring adherence to all presentation and disclosure requirements.

    Key Methodology for Conversion to IFRS/Ind AS

    KMG CO LLP adopts a systematic approach to ensure a seamless transition to Ind AS/IFRS. The methodology includes:

    1. Comparative Impact Assessment:

      • Conducting a detailed analysis of key Ind AS adjustments on the restated balance sheet and income statement at the conversion date.

      • Presenting a comparative assessment to evaluate the financial impact of transitioning from existing accounting standards to Ind AS.

    2. Training & First-Time Financial Statement Preparation:

      • Providing training sessions for company staff to ensure a smooth understanding and adoption of Ind AS.

      • Assisting in the preparation of the first set of IFRS/Ind AS-compliant financial statements.

    3. Financial Statement Consolidation:

      • Consolidating financial statements under multiple frameworks, including I-GAAP, Ind AS, and IFRS, ensuring compliance with regulatory requirements.


    FAQs

    Ind AS (Indian Accounting Standards) is a set of accounting standards converged with IFRS (International Financial Reporting Standards). It aligns Indian financial reporting with global best practices while incorporating specific modifications to suit Indian business conditions.

    Ind AS is mandatory for specified companies based on their net worth and listing status. Companies meeting the prescribed threshold are required to prepare and present their financial statements in compliance with Ind AS.

    Ind AS introduces significant changes in financial reporting, including:

    • Recognition and measurement of financial instruments

    • Revenue recognition based on performance obligations

    • Fair value measurement for assets and liabilities

    Detailed disclosure requirements

    The transition to Ind AS affects the balance sheet, income statement, and cash flow statement. Companies must restate previous financials, adopt fair value accounting for certain assets, and ensure compliance with new disclosure requirements.

    The conversion process involves:

    1. Initial assessment to identify key differences between existing GAAP and Ind AS.

    2. Adjustments and implementation of accounting differences.

    3. Preparation of Ind AS-compliant financial statements.

    Training and support to staff for a smooth transition.

    The timeframe depends on the complexity of the company’s financials, the extent of differences between existing GAAP and Ind AS, and the availability of resources. Typically, it can take a few months to a year.

    Common challenges include:

    • Understanding complex accounting adjustments.

    • Ensuring data availability for retrospective application.

    • Training staff on new reporting requirements.

    Managing tax and regulatory implications.

    No, Ind AS is applicable only to companies that meet certain thresholds, such as listed companies and those with a net worth exceeding the prescribed limit. Other companies may continue to follow Indian GAAP unless they voluntarily adopt Ind AS.

    Under Ind AS, consolidation is done as per Ind AS 110 (Consolidated Financial Statements), which follows a control-based approach instead of the earlier ownership-based approach under Indian GAAP.

    Yes, companies transitioning to Ind AS may need to prepare dual financial statements—one under the existing GAAP for previous reporting periods and another under Ind AS to comply with the new framework.

    To ensure a seamless transition, companies should:

    • Conduct an early impact assessment.

    • Seek expert guidance for implementation.

    • Provide training to finance teams.

    • Upgrade IT systems for data collection and reporting.