Conversion to Ind-AS / IFRS | Nainit Savla & Associates

Conversion to Ind-AS / IFRS

Q: What is the difference between Ind-AS and IFRS?

Ind-AS are IFRS-converged Indian standards with certain carve-outs for the Indian regulatory environment. Most Ind-AS are substantially similar to IFRS, but a further bridge is needed for companies reporting under full IFRS for overseas listing or foreign parent requirements.

Q: What is Ind-AS 101 and why is it important for conversion?

Ind-AS 101 governs the transition from Indian GAAP to Ind-AS. It prescribes how the opening Ind-AS balance sheet is prepared, which mandatory exceptions apply, and which optional exemptions can be elected. Incorrect application can lead to restatements or audit qualifications.

Q: How long does the Ind-AS conversion process typically take?

Typically 4 to 9 months depending on business complexity, standards with material impact, and data availability. Starting at least 12 months before the first Ind-AS reporting date is strongly recommended.

Q: Does Ind-AS conversion affect the income tax liability of the company?

Yes. Ind-AS adjustments such as fair value gains, ECL provisions, and ESOP charges can affect taxable income. Section 115JB MAT provisions have specific rules for Ind-AS transition adjustments that require coordinated tax analysis.

Q: What is the impact of Ind-AS 116 on companies with significant leases?

Ind-AS 116 requires lessees to recognise a right-of-use asset and lease liability on the balance sheet for almost all leases — increasing total assets and liabilities, changing expense patterns, and materially affecting EBITDA, debt-equity, and return on assets ratios.

The transition from Indian GAAP (AS) to Indian Accounting Standards (Ind-AS) or International Financial Reporting Standards (IFRS) is one of the most technically demanding exercises in corporate financial management. It requires a thorough understanding of the differences between the standards, restating historical financial statements, revising accounting policies, and reconfiguring systems and processes — all while maintaining compliance with both the old and new framework during the transition period. We provide specialist Ind-AS and IFRS conversion services to help companies navigate this transition with precision and confidence.

Ind-AS Impact Assessment

Comprehensive gap analysis identifying the differences between your current Indian GAAP accounting policies and Ind-AS requirements — quantifying the financial impact of transition adjustments on key line items.

Opening Balance Sheet Restatement

Preparation of the Ind-AS opening balance sheet as at the transition date — with all required adjustments under Ind-AS 101 (First-Time Adoption) for prior period comparatives.

Accounting Policy Revision

Review, revision, and documentation of all accounting policies to comply with applicable Ind-AS — covering revenue recognition (Ind-AS 115), leases (Ind-AS 116), financial instruments (Ind-AS 109), and more.

Financial Statement Reformatting

Reformatting of the balance sheet, profit & loss account, and statement of changes in equity to the Division II (Ind-AS) Schedule III format prescribed under the Companies Act, 2013.

IFRS Conversion Support

IFRS conversion for companies preparing for overseas listing, foreign parent reporting, or investor requirements — mapping Indian GAAP financials to IFRS-compliant statements with full disclosure notes.

Management & Audit Coordination

Preparation of technical accounting memos, bridging reconciliations, and notes on first-time adoption exemptions — coordinating with management and statutory auditors throughout the conversion process.

What is Ind-AS and Who Must Adopt It?

Ind-AS are accounting standards converged with IFRS and notified by the Ministry of Corporate Affairs (MCA) for mandatory adoption by specified classes of companies in India. Ind-AS is required for: (a) listed companies and those in the process of listing, (b) unlisted companies with net worth of ₹250 crore or more, (c) holding, subsidiary, associate, or joint venture companies of companies covered under (a) or (b), and (d) NBFCs with net worth of ₹500 crore or more (and their holding/subsidiary/associate/JV companies).

Conversion to Ind-AS follows a two-year phased adoption — the year of first Ind-AS financial statements must include restated comparative figures for the prior year under Ind-AS, requiring a three-year restatement exercise starting from the transition date. This process links directly to financial reporting and accounting review for ongoing post-conversion compliance.

Key Areas of Difference: Indian GAAP vs Ind-AS / IFRS

Revenue recognition — Ind-AS 115 / IFRS 15 five-step model vs AS 9 delivery-based recognition
Financial instruments — fair value measurement under Ind-AS 109 vs cost-based AS 13
Leases — right-of-use asset and lease liability on balance sheet under Ind-AS 116 / IFRS 16
Business combinations — acquisition accounting under Ind-AS 103 vs pooling of interests under AS 14
Deferred tax — comprehensive basis (including temporary differences) under Ind-AS 12 / IAS 12
Employee benefits — actuarial valuation of defined benefit obligations under Ind-AS 19 / IAS 19
Impairment — annual impairment testing for goodwill and intangibles under Ind-AS 36 / IAS 36
Consolidation — control-based consolidation under Ind-AS 110 vs majority ownership under AS 21

Frequently Asked Questions

What is the difference between Ind-AS and IFRS?

Ind-AS are Indian Accounting Standards converged with IFRS — meaning they are based on IFRS but with certain carve-outs, modifications, and additions specific to the Indian regulatory and business environment. Most Ind-AS are identical or substantially similar to their IFRS equivalents, but there are notable differences — including the treatment of regulatory assets and liabilities, certain exemptions for SMEs under Ind-AS, and modifications to financial instrument presentation. For companies preparing IFRS statements for overseas listing or foreign parent reporting, a further bridge from Ind-AS to full IFRS is required.

What is Ind-AS 101 and why is it important for conversion?

Ind-AS 101 (First-Time Adoption of Indian Accounting Standards) is the standard that governs the transition from Indian GAAP to Ind-AS. It prescribes how a company prepares its first Ind-AS financial statements — including the preparation of an opening Ind-AS balance sheet at the transition date, the mandatory exceptions that must be followed, and the optional exemptions the company may elect. Understanding and correctly applying Ind-AS 101 is critical — incorrect application of optional exemptions can lead to financial statement restatements or audit qualifications.

How long does the Ind-AS conversion process typically take?

A comprehensive Ind-AS conversion typically takes 4 to 9 months depending on the complexity of the company's business, the number of accounting standards with significant impact, the availability of historical data, and the readiness of the finance team. The process includes impact assessment, accounting policy drafting, adjustments computation, systems configuration, and audit coordination. Starting the conversion process at least 12 months before the first Ind-AS reporting date is strongly recommended to avoid a last-minute rush.

Does Ind-AS conversion affect the income tax liability of the company?

Ind-AS conversion can have tax implications because the computation of taxable income under the Income Tax Act remains based on the Companies Act financial statements — and changes in accounting treatments under Ind-AS (such as fair value gains, ECL provisions, or ESOP charges) can affect the profit figure from which taxable income is derived. The Income Tax Act has specific provisions (Section 145A, amendments for MAT under Section 115JB) addressing Ind-AS transition adjustments. We coordinate with the tax team to ensure Ind-AS conversion adjustments are analysed for tax impact before the financial statements are finalised.

What is the impact of Ind-AS 116 on companies with significant leases?

Ind-AS 116 (Leases) requires lessees to recognise a right-of-use (ROU) asset and a corresponding lease liability on the balance sheet for almost all leases — unlike the previous AS 19 which only capitalised finance leases and kept operating leases off-balance sheet. For companies with significant property, equipment, or vehicle leases (such as retailers, hotel chains, logistics companies, or IT firms with large office footprints), Ind-AS 116 materially increases total assets and total liabilities, changes the pattern of expense recognition from straight-line rent to depreciation plus interest, and affects key financial ratios including EBITDA, debt-equity, and return on assets.

Navigate Your Ind-AS or IFRS Conversion With Confidence

Specialist Ind-AS and IFRS conversion services — impact assessment, policy revision, restatement, and audit support for companies across India.

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