NEED, IMPLEMENTATION

AND CHALLENGES
INDIAN ACCOUNTING STANDARDS
Ind AS
Financial Reporting & Standards Assignment

Semester 6, Batch 2020-23

Project by:
Shloka Vasudeva
TY-A
Roll No. 3082
PRN: 20020621424
 INDEX

Sr. Topic Pg. No.

No.
1. Introduction 2

I. Accounting Standards

II. Ind AS and List of Major Applicable Ind AS

2. Review of Articles and Research Paper Researched 3

I. Need

II. Implementation

III. Challenges

3. Questionnaire and Responses 5

I. Discussion with Ms. Neelu Kamath

II. Discussion with Mr. Anand Mathur

4. Personal View Point 13

5. Conclusion 15

6. References 15

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 INTRODUCTION
Accounting Standards
Accounting standards are a set of guidelines and principles that determine how financial
transactions and statements should be recorded, presented, and disclosed. These standards are
designed to ensure the transparency, comparability, and reliability of financial information,
enabling stakeholders to make informed decisions based on accurate and consistent data.
Accounting standards can be established by various regulatory bodies and are typically
enforced through legislation or professional codes of conduct. There are several different types
of accounting standards, including:
1. Generally Accepted Accounting Principles (GAAP) and
2. International Financial Reporting Standards (IFRS).
These standards are periodically updated to reflect changes in the business environment and to
maintain their relevance and effectiveness.

Indian Accounting Standards (Ind AS)

Indian Accounting Standards are a set of accounting principles and guidelines that apply to
companies in India. Ind AS are based on the International Financial Reporting Standards
(IFRS), which are a globally recognized set of accounting standards developed by the
International Accounting Standards Board (IASB).
Ind AS were introduced in India in 2016, with the objective of aligning the country's accounting
standards with international practices and promoting the comparability and transparency of
financial information. Ind AS apply to listed companies in India, and to the unlisted companies
that meet certain criteria. These cover a wide range of topics, including financial statement
presentation, revenue recognition, and financial instruments, etc.
The implementation of Ind AS has been a significant development for the Indian accounting
industry, and has had a significant impact on the financial reporting practices of companies in
the country.
This report focuses on the need, implementation and challenges of Ind AS in the current times.

Major Applicable Ind AS

The following table provides a converged and pertinent list of major applicable Ind AS as per
MCA:
Ind AS 1 Presentation of Financial Statements
Ind AS 2 Inventories Accounting
Ind AS 7 Statement of Cash Flows
Ind AS 8 Accounting Policies, Changes in Accounting
Estimates and Errors
Ind AS 10 Events after Reporting Period

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 Ind AS 11 Construction Contracts
Ind AS 12 Income Taxes
Ind AS 16 Property, Plant and Equipment
Ind AS 17 Leases
Ind AS 18 Revenue
Ind AS 19 Employee Benefits
Ind AS 23 Borrowing Costs
Ind AS 24 Related Party Disclosures
Ind AS 27 Separate Financial Statements
Ind AS 32 Financial Instruments: Presentation
Ind AS 33 Earnings per Share
Ind AS 34 Interim Financial Reporting
Ind AS 37 Provisions, Contingent Liabilities and Contingent
Assets
Ind AS 38 Intangible Assets
Ind AS 40 Investment Property
Ind AS 101 First-time adoption of Ind AS
Ind AS 102 Share Based payments
Ind AS 103 Business Combination
Ind AS 105 Non-Current Assets Held for Sale and Discontinued
Operations
Ind AS 107 Financial Instruments: Disclosures
Ind AS 108 Operating Segments
Ind AS 110 Consolidated Financial Statements
Ind AS 111 Joint Arrangements
Ind AS 112 Disclosure of Interests in Other Entities
Ind AS 113 Fair Value Measurement
Ind AS 114 Regulatory Deferral Accounts
Ind AS 115 Revenue from Contracts with Customers

REVIEW OF ARTICLES AND RESEARCH PAPERS REFERRED

Findings from Articles and Research Papers for “Need of Ind AS”
1. The Need for Convergence of Indian Accounting Standards with International
Financial Reporting Standards by K. Venkataraman and S.S. Sundararajan (Journal of
Accounting, Auditing & Finance, 2015)
“Ind AS” stands for "Indian Accounting Standards." It is a set of accounting standards that
have been adopted by the Institute of Chartered Accountants of India (ICAI) for use by Indian
companies.
The need for Ind AS arises from the fact that the accounting standards used in India previously
were not fully aligned with international accounting standards, such as International Financial
Reporting Standards (IFRS). As a result, it was difficult for investors and other stakeholders to

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compare the financial reports of Indian companies with those of companies from other
countries. Ind AS was introduced to address this issue and improve the quality and consistency
of financial reporting in India.
2. Indian Accounting Standards (Ind AS): An Overview by Kirtan P. Raval (International
Journal of Management Sciences, 2017)
The paper concludes that the adoption of IFRS in India in the form of Ind AS will be a
challenging yet rewarding task for the Indian corporate disclosure system. Since the past two
decades, the demand for uniformity of accounting practices has become very strong. Due to
differences in financial reporting and accounting standards, there are hurdles in financial
comparisons for Indian companies at an international level.
To solve this problem, IASB came up with the concept of convergence of IFRS to the Indian
context in the form of Ind AS. This will result in transparent financial reporting, with benefits
to investors, customers and other stakeholders in terms of increased reliability.
3. A Study on Issues Related to Converging Indian Accounting Standards into
International Financial Reporting Standards by Bhatt (International Journal of Financial
and Managerial Accounting, 2016)

Findings from Articles and Research Papers for “Implementation and

Applicability of Ind AS”
1. Article: Applicability of IND AS – Indian Accounting Standards (www.cleartax.in)
Summary of mandatory phase-wise implementation of Ind AS as notified by MCA:

2. RBI Notification: Implementation of Indian Accounting Standards (www.rbi.org.in)

The critical issues that need to be considered in an Ind AS implementation plan include the
following:
a. Project Management: Effective communication with all stakeholders along with strong
linkages between accounting, systems, people, etc.
b. Ind AS Technical Requirements: Analysis of basic differences between the current
accounting framework and Ind AS, drafting accounting policies, disclosures, etc.
c. Business Impact: Taxation, capital planning, assessment of impact on capital adequacy.

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d. People: Evaluation of availability of personnel, training programs and strategies.
e. Systems and Processes: Evaluate significant impact on IT systems, assessment of processes
requiring changes.

Findings from Articles and Research Papers for “Challenges of Ind AS”
1. Implementation of Ind AS in India: Issues and challenges by R. K. Jain and R. K.
Agarwal, (Journal of Accounting, Finance and Economics, 2017)
This paper gives an in-depth account of challenges of adopting Ind AS in India. The research
concludes that there are several irreconcilable differences between Indian GAAP and Ind AS.
Lack of financial education and accounting training, requirement of Ind AS for renegotiating
customer contracts, tax treatment and complexity of fair value measurement are some
challenges discussed by the author. It states that the top management and regulators need to
address the adoption challenges and facilitate efficient implementation.
2. The Implementation of Ind AS in India: Challenges and Benefits by J. S. Saini (Journal
of Financial Reporting and Accounting, 2016)
This paper particularly emphasises on the effect of the convergence on SMEs (Small and
Medium Enterprises). The convergence with Ind AS has become a pain point for medium
enterprises because these companies lack adequate resources to invest in the preparation of
shift from Indian GAAP, both in terms of money and expertise.
3. A Study on Challenges in Implementation of Ind AS in India by Madhubala Sharma
(International Journal of Research in Engineering, IT and Social Sciences, 2020)

PROFESSIONALS INTERVIEWED
For the report, I reached out to two working professionals from a limited company and a bank,
via LinkedIn, in order to gain a thorough understanding of the need, implementation and
potential roadblocks/challenges of implementing Ind AS, in their respective industries/sectors.
These professionals, with their diverse backgrounds and specialised domain knowledge, were
able to provide valuable insights on the questions posed during the discussion.

Ms. Neelu Kamath: Professional from Corporate Sector (Real Estate Limited
Company)
Ms. Neelu Kamath is a chartered accountant with over 22 years’ experience in accounting for
limited companies, especially in the real estate sector. She has been working with Larsen &
Toubro Ltd. since the last 10 years as General Manager (F&A), specializing in financial
reporting and compliances.

Mr. Anand Mathur: Professional from Banking Sector (HDFC Bank)

Mr. Anand Mathur is a chartered accountant and has been working at HDFC Bank as Asst. VP
(IFRS Implementation) for the bank’s operations in Mumbai. With over 13 years’ experience
in banking industry, he leads IFRS implementation for the group companies in Mumbai.

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 QUESTIONNAIRE AND RESPONSES
Discussion with Ms. Neelu Kamath
Q1. Given your immense experience in accounting for limited companies, especially in
the realty space, how would you assess the need for Ind AS in the real estate sector and
for limited companies in general?
Prior to the adoption of Ind AS, most limited companies in India and L&T Ltd. followed the
Indian Generally Acceptable Accounting Principles (IGAAP).
For real estate sector in particular, revenue accounting for construction projects was a huge
debate under IFRS. The Accounting Standard (AS) 9, i.e., “Revenue Recognition” as per the
Indian GAAP, did not provide comprehensive guidance for certain critical aspects, resulting in
diversity in practices. This hindered comparability and consistency, thus limiting Indian
companies’ global reach. This gap was filled by Ind AS 18, “Revenue”, and Ind AS 11,
“Construction contracts”, which laid down concrete and comprehensive principles for revenue
recognition. This provided a unified framework for preparation of financial statements and
enhanced transparency in the financial reporting.
Similarly, barter transactions, which are a characteristic feature of the Indian real estate sector,
were not recognised by Indian GAAP. This further limited its scope. Under Ind AS, such
transactions are recorded at fair value, thus making the financial statements more credible.
Thus, the lack of specific guidance under the Indian GAAP created a strong need for Ind AS
in limited companies.
For limited companies in general, there was a need to enhance quality of financial reporting in
India along with improving comparability and adherence to global and internationally
recognised standards, giving rise to Ind AS.

Q2. Do you believe the phased convergence proposed by MCA provided adequate time
for the transition to Ind AS? Could you outline a broad approach that L&T Ltd. followed
to transition to and implement Ind AS?
The MCA notified a phase-wise convergence to Ind AS from the former accounting standards,
in 2015. In 2007, ICAI had even issued a detailed paper explaining the need for convergence
of IFRS in India. So, the talks had been around since a decade prior to the mandatory
applicability.
Phase I was classified mandatory according to Ind AS for all companies from 1 st April 2016,
provided it was a listed/unlisted company and its net worth was greater than or equal to ₹500
crores. At the time, L&T Ltd. was a listed company with a net worth of approx. ₹8,200 crores.
Hence, L&T Ltd. was required to converge to Ind AS mandatorily in Phase I.
However, the company had sufficient time to transition to Ind AS, given the “one-time reliefs”
given by the MCA to first time adopters of Ind AS, through Ind AS 101. The most critical
exemption used by L&T Ltd. to facilitate the convergence was not restating any business
combinations before the transition date. The exemption to use carrying values on the date of
transition to Ind AS for Property and Equipment came as a huge relief to the company.

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At L&T Ltd. the broad approach followed to transition to Ind AS was based on the idea that
Ind AS was not a mere technical exercise, but had critical strategic implications that required
organisational commitment extending beyond process, people, control, etc. The objective was
to take a holistic approach for an effective converging effort. The accounting professionals
were advised to follow five steps –
Step 1: Project Set-up and Assessment
A project steering committee was set up to analyse the impact of Ind AS on standalone and
consolidated financial statements. The committee, comprising of the company’s top Chartered
Accountants and change management consultants, defined scope and vision for Ind AS
adoption. An implementation strategy was formulated.
Step 2: Diagnostic Review
Towards a holistic approach to convergence, it involved a thorough analysis of existing
contracts and transactions, projected personnel requirements, training needs and impact of the
transition on the company’s information systems.
Step 3: Board and Management Discussion
Based on the diagnostic review, the Board of Directors and management of L&T Ltd. evaluated
various operating strategies and finalised the optimal ones. At this stage, certain necessary
approvals concerning IT systems, contracts, etc. were obtained as the lead time from
announcement to reporting date is quite short.
Step 4: Comprehensive Ind AS Conversion
Ind AS processes and controls for accounting, reporting and consolidation were designed.
Appropriate templates were formulated for quantification of adjustments pertaining to tax
conversion, disclosures, etc.
Step 5: Continued Ind AS reporting
This step relied on cross-functional collaboration as it addressed the ongoing training needs of
personnel and regular updates to the finance department and external consultants. Quarterly
financials were prepared based on Ind AS for the first reporting period. Most importantly, as
the business processes were restored to “usual”, the management explained the stakeholders
about the changes and impact of Ind AS conversion.

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Q3. Due to the Ind AS convergence process, no line item of the financial statements
remains unaffected. However, this impact varies from one company to another –
depending on the sector, nature and size of business. How does the implementation of Ind
AS continue to impact your company?
Fundamentally, Ind AS emphasises on substance rather than legal form, coupled with the risks
and rewards of the underlying transactions. Having followed Indian GAAP all her professional
career until 2016, Ms. Kamath highlighted that Ind AS breaks away from the former legal-
structure centric accounting to more substance-driven reporting. It brings out the underlying
business rationale and the accurate economics of transactions.
In the initial discussions, the project steering committee of L&T Ltd. narrowed down to 3 major
impact areas –

1. Information Technology: Capacity to handle multi-ledger reporting, as during transition

years reporting as per both Ind AS and Indian GAAP will be required.
2. Policy and Governance: Develop and implement new finance operating policies and
model that requires significant judgement than Indian GAAP and facilitates consistency in
application. Training of employees and educate stakeholders
3. Tax: Impact on tax planning structures, effective tax rates and dividend requirements.
For L&T Ltd., for instance, the 20-80 structure is popular wherein the buyer pays 20% upfront
for residential real estate and balance at the time of possession. The construction extends
beyond 12 months, so under Ind AS, the unbilled revenue is recognised at its present value –
unlike under Indian GAAP. This has significantly impacted the company’s revenue recognition
on YoY basis along with its net worth by +/- 20%. In terms of current status, this change
continues to affect employee emoluments due to changes in their bonuses.
Additionally, a personal observation has been that investors who make financial decisions
based on a thorough reading of financial statements were overwhelmed with additional
information to be provided under Ind AS.

Q4. What challenges did your company face in its Ind AS journey? Do they persist in the
present time?
Having to transition to Ind AS in Phase I, the convergence process for L&T Ltd. was fraught
with several challenges and roadblocks, some of which persist even today –
1. Additional Disclosures/ Increased Reporting Burden: The quantum of disclosures, for
limited companies in general, has increased exponentially. Two standards –

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  Ind AS 107: Financial Disclosures
 Ind AS 112: Disclosure of Interests in Other Entities
have posed a particular challenge for the company. This requires L&T Ltd. to implement ERP
system changes as the existing systems back then were not capable to manage the information
load. Moreover, Ind AS necessitated certain disclosures to external parties e.g., fair value of
property, etc. The extensive data requirements and disclosures increased time, effort, cost
involved substantially.
2. Additional Cost: At L&T Ltd., the additional cost arises due to the necessity for hiring
external valuers and consultants. Example, measurement remains same for plant, property and
equipment, i.e.,
Cost – Accumulated depreciation and impairment
However, the fair value of each property needs to be disclosed under Ind AS, requiring the
help of external valuers.
3. Complex Standards: Ind AS implementation has multiplied financial reporting risks, owing
to technically complex standards and increased time to implement them. Ind AS has posed
particularly complex technical challenges to L&T Ltd., such as –
 Ind AS 115: Contracts with Customers
 Ind AS 103: Business Combinations
 Ind AS 111: Joint Arrangements
which are way more complex than standards under Indian GAAP.
4. Employee Training: This was one of the biggest hurdles L&T Ltd. faced during the
transition, and continues to face, even today. It refers to the lack of training facilities and
academic courses on Ind AS in India. Ind AS implied a drastic change in management system
reporting and internal control, meaning that employees had to be trained in this respect, adding
to the costs. There is a huge gap between trained professionals required and those available.
For instance, the large number of joint ventures of L&T Ltd. worsened the situation. Under
Indian GAAP, the company performed a line-by-line consolidation but under Ind AS, it had to
be accounted as per equity method. This meant investment appears as a single line item; assets
and liabilities not recognised separately – all necessitating training from scratch for employees.
5. High Conversion Cost: The dual reporting as per Ind AS and Indian GAAP during the
transition period commands additional manpower – audit fee and IT system upgrade charges
are also immense. The increased fee for IT and ERP systems, persist today, impacting profit
margins.
Q5. How does the company overcome the aforementioned challenges to ensure smooth
implementation of Ind AS? In your view, are there any steps the company can take to
improve further?
Overcoming the challenges discussed has been a long, tedious and expensive process for
limited companies. However, the earlier a company addresses the challenges and bottlenecks,
the more benefits it will reap from the smooth implementation of Ind AS. A few steps used by
professionals at L&T Ltd. to facilitate seamless transition –

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1. To overcome the problem of additional disclosures, L&T Ltd. sought help from external
consultants from the Big 4 audit firms, as well as strategy consultants from Accenture, enabling
it to convert within a short lead time and preventing escalating costs.
2. The company maximised the use of Ind AS 101 exemptions and exceptions. A careful study
and analysis of all exemptions helped understand limitations and applicability.
3. To control technical complexity, the company adopted an integrated approach, considering
all possible collateral effects, including impact on tax structures and debt covenants.
Additionally, the company appointed a dedicated PMO to facilitate the multifaceted strategic
approach.
4. What set the company apart from others in the transition process is the communication and
training system that L&T developed to keep key personnel outside of finance department, such
as those from legal, IT departments or investors updated regarding key changes, timelines and
impact.
5. The company also conducted a trial run before the group-wide rollout of Ind AS policies.
This revealed that the incentive plans had to be recalibrated in accordance with Ind AS, which
saved the company time and money, before the actual conversion exercise.
In order to further avail complete benefits of Ind AS implementation, in Ms. Kamath’s opinion,
the company should employ recent versions of some reputed ERP systems, which are designed
and modified to accommodate all changes in Ind AS. In doing so, the changes can be mapped,
resulting in significant cost savings.
The MCA updates the Ind AS from time-to-time. Changes to Ind AS will likely necessitate
redefined accounting, reconciliation processes, etc., which can be easily managed using ERP.
Further, it will help the company deal with the extensive disclosure requirements and provide
new avenues to communicate with stakeholders (investors and analysts) about Ind As to ensure
financial statements are well interpreted.

Q6. In your opinion, was the MCA justified in issuing different conversion roadmaps and
applicability for limited companies, banks and NBFCs in terms of different timelines?
According to Ms. Kamath, the MCA has been absolutely fair in issuing different applicability
and roadmaps for limited companies, banks, NBFCS, insurance companies, etc., as against a
standardised roadmap. I believe that since banks and insurance companies are bound with more
statutes and regulations, the phased implementation will help them to simply follow the staged
approach to transition to the new accounting standards used by limited companies in the
previous phases (Phase I and II). This will enhance the compatibility of their financial
statements and save valuable time and resources, given the immense legal implications in these
sectors.

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Discussion with Mr. Anand Mathur
Q1. You have worked in the banking industry for the past 13 years and have led the
implementation of both Indian GAAP and Ind AS in the banking sector. Do you believe
that adequate guidance has been provided by ICAI towards issues pertaining to Ind AS
implementation for banks?
Yes, definitely. The guidance and clarifications provided by ICAI with regards Ind AS
implementation are sufficient, but only to some extent, according to CA Anand Mathur. He
agrees that since Ind AS have been introduced, ICAI frequently issues various guidance notes
like FAQs and Ind AS Transfer Facilitation Group Bulletins (ITFG) to ensure seamless
convergence. It issues guidance notes on applicability of Ind AS, adjustments to be made
during transition period, etc. These clarifications have played a substantial part in facilitating
the Ind AS implementation for banks in India.

Q2. In your opinion, does transition to Ind AS pose any opportunities for players in the
banking sector? How has HDFC leveraged the implementation of Ind AS?
Like the corporate sector, the implementation of Ind AS has been invaluable to the banking
industry. The adoption of the Indian Accounting Standards provides the banks with an
opportunity to reshape their financial status-quo and operating results, using an internationally
recognised set of accounting principles.
The adoption of globally recognised accounting pronouncements has a direct impact on the
credit rating of banks and other financial institutions in the sector. International credit rating
agencies highly regard the quality of norms and standards used as well as how rigorously they
are implemented. Thus, implementation of Ind AS helps the banks to improve their credit
ratings, leading to a significant benefit to the economy as a whole.
HDFC Bank has leveraged the opportunity to redefine its financial position using “project
management”, as specified by RBI. The framework encompasses a holistic approach to
convergence of Ind AS, thus helping the bank in early identification of roadblocks and quick
resolution through a number of alternatives. The accounting team at HDFC has carefully
analysed the first-time adoption policies and has dedicated tremendous resources to compare
the new accounting standards with the existing ones component wise and systematically
monitor and track new information required to be disclosed under Ind AS.
Further, the primary goal of the bank is to strengthen the communication with the stakeholders
regarding the implementation of Ind AS.

Q3. What are the fundamental challenges that banks face during transition to Ind AS?
How has HDFC overcome such bottlenecks?
The transition to Ind AS has been a complex challenge for the Indian banks, as it has
fundamentally transformed the accounting landscape, leading to significant shifts in the bank’s
lending policies, information systems, employee benefits, etc.

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1. According to Mr. Anand Mathur, one major challenge to the Indian banks is the
implementation of Ind AS 9 (Financial Instruments). This standard mandates that the
accounting for the entity’s assets must reflect the business model – derecognition of financial
assets, loan loss provision based on Expected Credit Loss (ECL) model. A credit loss arises
even if the bank expects to be paid in full later than contractual due date, thus substantially
impacting revenue recognition.
2. In order to ensure smooth transition, banks need to commit enormous amount of time
owing to the substantial process and information challenges associated with Ind AS.
3. Further, the Ind AS envisages a shift from rule-based system followed under Indian GAAP
to a look-ahead system, that focuses both on quantum and timing of cash flows. The changes
due to the ECL model will have significant impact on balance sheet and net profit, further
entailing the requirement of extra manpower. The cost incurred for issues of debt to be
amortised using the Effective Interest Rate (EIR) method poses several challenges.
Mr. Mathur, further briefed about how HDFC continues to overcome such challenges and
facilitate the transition using the following measures -

Q4. While major Indian banks have transitioned to Ind AS, some other constituent banks
still remain an exception, due to various deferrals given by RBI. In your opinion, what
could be the possible reasons for the deferment in implementation of Ind AS?
The implementation of Ind AS by banks requires several statutory changes in the format of
financial statements prescribed by the Banking Regulation Act, 1949 to comply with the
disclosure requirement of Ind AS. This is the main reason for the deferral by RBI and other
regulatory authorities.
Other reasons for the delay, according to CA Mathur, include –

 Lack of investment by banks to facilitate convergence

 ECL model, commanding superior data and IT quality, etc.
which may seriously impact the financial ratios of banks such as NPA and current ratio. While
the deferment provides relief to several banks by allowing time to prepare for the transition, it
limits their global reach due to lack of comparability with global counterparts following
international standards.

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 PERSONAL VIEWPOINT/ COMMENTS
In my opinion, the adoption of IND AS is necessary for India to improve the quality and
transparency of financial reporting, as it brings Indian accounting practices in line with global
best practices. Ind AS is the need of the hour for the Indian businesses in the interconnected
world, as it provides comprehensive accounting norms and standards that can be consistently
applied to facilitate comparability across all companies. Moreover, this will make it easier for
foreign investors to understand and compare the financial statements of Indian companies,
which can enhance the attractiveness of the Indian market to foreign investors.
With regards the applicability and implementation of Ind AS in a phased manner by the MCA,
I absolutely agree with the views of Ms. Kamath. Since banks, insurance companies and
NBFCs are subject to more statutory regulations as compared to other entities in the corporate
sector, the implementation of Ind AS in Phase III and IV will enable such companies to observe
their predecessors in Phase I and II before their own transition and enhance compatibility with
applicable requirements and regulations.
Through my discussions with Ms. Kamath and CA Anand Mathur about the impact of Ind AS
in corporate and banking sector respectively, it is evident that the impact of Ind AS is immense
on the Indian companies and extends far beyond accounting. The impact of Ind AS is pervasive
in business, from IT systems, internal control processes, tax planning to company’s forecasting
and budgeting activities.
I believe effective Ind AS transition will require significant input from every functional area
including IT, finance, HR, marketing, etc., like in the case of L&T Ltd. The adoption of Ind
AS puts the Indian businesses in the centre of high-quality and transparent, international
financial reporting. However, as evident from my discussion with the professionals, it poses
certain challenges. Thus, I feel that it is extremely important for businesses to carefully prepare
for the conversion process by following an integrated approach as mentioned by Ms. Kamath.
Without careful preparation, the level of execution risk might become unsustainable. In the
corporate sector, Ind AS poses significant roadblocks in terms of extensive disclosure
requirements which commands data mining. For instance, in the real estate segment (as in case
of L&T Ltd.) the nature and magnitude of exposure to associated risks, i.e., credit, market and
liquidity risk, classification of financial instruments, etc. – all need to be disclosed to reflect
how the management perceives and manages these risks and involves significant use of
judgment and estimates.
About the challenges posed by Ind AS 109 (Financial Instruments) in the banking sector, I
absolutely agree with Mr. Mathur. Indian banks had to implement the standard much before
their global peers and hence did not have any predecessors in terms of experience. Further, the
“substance-over-form” principle of Ind AS will require banks to take a big leap from the rule-
based system under Indian GAAP.
Summarising my interaction with the two working professionals, I believe that by starting out
early, the company will be well-positioned to spread out its conversion costs and tap into the
limited skilled human resource, as discussed with Ms. Kamath. Like HDFC Bank, it is
important that the organisation improves its processes, policies and systems in accordance with
Ind AS. This is evident in Ms. Kamath’s suggestion of implementing and upgrading “ERP
systems”. Management information systems also need to be revamped, as suggested by CA
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Anand Mathur. At the same time, a thorough analysis of exceptions and exemptions under Ind
AS 101, as mentioned by both professionals, helps to overcome the aforementioned challenges.
In conclusion, although converting to Ind AS presents its own challenges, I believe it is worth
the effort. The pivotal concept of fair value in Ind AS will help the Indian businesses better
align themselves with the globalised businesses. Eventually, the implementation of these
standards will bring the Indian financial reporting at par with global economies and act as a
foundation of credibility and trust, in case of international investments.
At the same time, I believe that an Ind AS transition project should not distract the company
from its core activities. Rather, it must be carefully studied, analysed, implemented and aligned
into a carefully drawn roadmap to ensure seamless transition.

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 CONCLUSION
This report focuses on the need, implementation and challenges of Indian Accounting
Standards (Ind AS). Ind AS (Indian Accounting Standards) is a set of accounting standards
developed by the Institute of Chartered Accountants of India (ICAI) that are based on
International Financial Reporting Standards (IFRS). To gain a detailed view of Ind AS, several
articles and research papers were reviewed.
Further, two professionals were contacted from corporate sector and banking sector
respectively. A detailed and pertinent questionnaire was prepared to structure the discussion
with the professionals. Finally, a personal view was presented.
In conclusion, Ind AS (Indian Accounting Standards) is a necessary step towards converging
Indian accounting standards with international standards. The implementation of Ind AS has
brought about several benefits, including increased comparability of financial statements,
improved quality of financial reporting, and increased foreign investment.
However, the implementation of Ind AS has also faced several challenges. These include the
need for trained professionals to understand and apply the new standards, the cost of
implementing the new standards, and the need for companies to make significant changes to
their accounting systems and processes.
Overall, Ind AS in India demonstrates the importance of high-quality financial reporting in
promoting the transparency and integrity of the financial system.

REFERENCES
1. Muniraju et al. (2020). A study on the impact of International Financial Reporting Standards
Convergence on Indian Corporate Sector. IOSR Journal of Business and Management.
2. Amit Kumar Chakrabarty (2021). Convergence of IAS with IFRS: Theoretical Aspects and
Present Status in India. The Journal of Commerce.
3. www.enterslice.com/implementation-of-ind-as
4. www.mca.gov.in/Ministry/pdf/INDAS101.pdf
5. www.adms.co.in/ind-as-implementation.php
6. www.taxguru.in/chartered-accountant/ind-as-indian-accounting-standards.html
7. www.caclubindia.com/articles/ind-as-implementation-5-major-challenges-29448.asp
8. www.m.economictimes.com/industry/services/consultancy-/-audit/phased-
9. https://www.wirc-icai.org/images/material/Ind-AS.pdf
10. Research Papers and Articles mentioned in the report

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