Part 1

Presented by

Chitranshu Rahul Srivastava

ACA, IFRS

Mumbai

Ensure that entity's First IND-AS financial statement and its interim financial reports contain high

quality information that:-

* is transparent & comparable for its users

* provide a Suitable Stating Point

* cost effective

Entity shall apply IND AS 101 in :-

* First IND AS Financial Statements

* Interim Financial Reporting (presented in accordance with IND AS -34 “Interim

Financial Reporting.”)

An entity shall prepare and present an opening IND-AS Balance Sheet at the date of transition to IND-

ASs.

Date of Transition is The beginning date of the earliest period for which an entity presents full

comparative information.

* Use same Accounting Policy throughout the all period of Reporting.

* Entity should comply with each IND AS

* However some exceptions from Retrospective application of few aspect of some

IND ASs & exemptions from some IND ASs is available.

* Entity should Not apply different versions of IND-ASs that were effective at earlier

dates.

* Entity May apply New IND-AS even not mandatory but permits early applications.

* Opening IND-AS balance Sheet shall recognize, reclassify & re-measure all the assets

& liabilities as per IND-AS.

* Any difference because of accounting policy (IND AS VS Previous GAAP) -

Adjust it directly from Retained Earnings (or, if appropriate, another category

of equity)

Estimates

* Estimates accordance with IND AS should consistent with Previous GAAP.

* However Any Accounting Policy adjustment because of IND-AS VS Previous

GAAP is allowed to consider retrospectively.

* Further any error in Previous estimation in previous GAAP FS identified with

Objective Evidence then the correction is permitted retrospectively.

* Any Information after the date of transition about estimates then treat it in the same

way of "IND AS-10 Events after the Reporting Period“.

Means information which is dated after the transition date, would not be use for

the date of transition unless require as an adjustments or errors.

* Any Estimate which require as per IND AS (Not require under previous GAAP)

would not apply retrospectively.

Others prohibitions on retrospective application as per Appendix B

(a) De-recognition of financial assets and financial liabilities Paragraphs - B2 & B3

(b) Hedge accounting Paragraphs - B4 - B6

(c) Non-controlling interests Paragraphs - B7

(d) Classification and measurement of financial assets Paragraphs - B8 - B8C

(e) Impairment of financial assets Paragraphs - B8D - B8G

(f) Embedded derivatives and Paragraphs - B9

(g) Government loans Paragraphs - B10 – B12

Exemptions for business combinations

As on IND AS transition date, there are some exemptions for IND AS 103 Business Combination.

Detail in Appendix C.

Exemptions from other IND-ASs

An entity may elect to use one or more of the exemptions which is available in INS AS 101. Listing

of topics in which such exemptions are available is as below :-

(a) Share-based payment transactions

(b) Insurance contracts

(c) Deemed cost

(d) Leases

(e) Cumulative translation differences

(f) Investments in subsidiaries, joint ventures and associates

(g) Assets and liabilities of subsidiaries, associates and joint ventures

(h) Compound financial instruments

(i) Designation of previously recognized financial instruments

(j) Fair value measurement of financial assets or financial liabilities at initial

….. recognition

(k) Decommissioning liabilities included in the cost of property, plant and

equipment

(l) Financial assets or intangible assets accounted for in accordance with

Appendix C to IND AS 115 Service Concession Arrangements

(m) Borrowing costs

(n) Extinguishing financial liabilities with equity instruments

(o) Severe hyperinflation

(p) Joint arrangements

(q) Stripping costs in the production phase of a surface mine

(r) Designation of contracts to buy or sell a non-financial item

(s) Revenue from contracts with customers ; AND

(t) Non-current assets held for sale and discontinued operations

Note :- An entity shall not apply these exemptions by analogy to other items.

This IND-AS 101 does not provide exemptions from the presentation and disclosure

requirements in other IND-ASs.

i.e. all presentation & disclosures need to be comply with respective IND-ASs

First time IND AS Financial Statements should include comparative information's for all

statement presented at least by :-

3 Balance Sheet

2 Statement of Profit & Loss

2 Statement of Cash flows

2 Statement of Changes in Equity & related notes

Some Entity presents historical summaries of selected data for periods prior to transition date of IND-AS.

Note that this kind of historical summary is not require.

Furthermore, If Comparative Information accordance with the previous GAAP as well as comparative information required by IND AS 101 is presented then entity shall

* Label that previous GAAP Information as not being prepared in accordance with IND AS.

* Disclose the nature & adjustment which would make it comply with IND AS.

(note that : Need not quantify)

Explain how the IND-AS conversion is affected its reported Balance Sheet, Financial Performance & Cash flows.

For the purpose of explanation of transition to IND AS some reconciliations shall include with First IND AS Financial Statements.

>> Reconciliations As on date Remark

Equity Reported 1. As on Date of transition

2. End of most recent annual

FS accordance with the

previous GAAP.

Total Comprehensive Income 1. End of most recent annual

(Starting point will be P/L if CI is FS accordance with the

not reported in previous GAAP) previous GAAP.

>> Any impairment loss recognized or reversed in IND AS Financial Statement then disclosures

require as per "IND-AS 36 “Impairment of Assets“.

* Should be good

enough to explain the

material adjustments to

the user of FS.

* Any error in previous

GAAP FS which

corrected in IND AS FS

Should be shown

separately in

reconciliations

>> If Deemed cost of PPE, Investment properties or Intangible assets is :-

* carrying value as per Previous GAAP

Then disclose the Fact & Accounting Policy until those assets significantly depreciated,

impaired or derecognized from the entity's balance sheet.

* Fair Value

Then disclose the Aggregate of those fair values & Adjustment in carrying amount

reported under previous GAAP.

Note :- All the above points of reconciliations are applicable for Interim Financial Reporting

as well.

Entity is permitted to designate a previously recognized financial assets/liabilities as financial assets/liabilities measured at fair value through profit / Loss .

Disclosure :-

Fair Value of the financial assets so designated at the date of designation

Carrying amount in Previous GAAP financial Assets

Classification in Previous GAAP FS

If entity uses fair value for PPE, an investment property or an intangible assets the disclosure requirement is :-

* The aggregate of those fair values; and

* The aggregate adjustment to the carrying amounts reported under previous GAAP.

Entity uses deemed cost for an investment in a subsidiary, joint venture or associate

then Disclosure requirement is :-

* Aggregate of carrying amount of deemed cost

* Aggregate of fair value amount of deemed cost

* Aggregate of adjustment to the carrying amount reported under

previous GAAP.

If an entity elects to measure assets and liabilities at fair value as the deemed cost because

of severe hyperinflation the entity‟s first IND AS financial statements shall disclose an

explanation of how, and why, the entity had, and then ceased to have, a functional currency

that has both of the following characteristics :-

(a) a reliable general price index is not available to all entities with

transactions and balances in the currency.

(b) exchangeability between the currency and a relatively stable foreign

currency does not exist.

* Any additional Recognition of Assets / Liability which was not in previous GAAP then

resulting change will be adjusted through

IN IND AS :- Retained Earnings, Goodwill or capital Reverse

IN IFRS :- Retained Earnings or Goodwill

* Some Optional Exemptions is in addition in IND AS i.e. Long-term foreign currency

monetary items (Paragraph D13AA) and Service Concession Arrangements relating to

toll roads (Paragraph D22).

* There are some „Short-term exemptions from IFRSs‟ in IFRS 1 Appendix E. No such

short term exemptions in IND AS 101.

* Different Terminologies between IND AS & IFRS

In IND AS IN IFRS

Balance Sheet Statement of Financial Position

Statement of profit and loss Statement of comprehensive income

Thankyou In case of any query or suggestions please contact

Chitranshu Rahul Srivastava

CA, IFRS Email IDs

crsri90@gmail.com