Most Indian companies comply with Ind AS reporting

Most listed companies – part of the BSE 500 index – managed to file their June quarter results under the new Indian Accounting Standard or Ind AS, the extended deadline for which ended September 15. But some outside the top 500 list failed to file their numbers within the stipulated deadline citing “practical difficulties”.

Starting June quarter, all listed companies, with the exception of some in the BFSI space, had to provide their financial statements under the Ind AS format and not the earlier Indian Generally Acceptable Accounting Principle (Gaap) format. Ind AS, a fair valuation-based method, is converged with the globally adopted International Financial Reporting Standards (IFRS) format. Ind AS changes how companies report recognize their revenue, valuation of financial instruments and joint ventures among others.

Companies have to file their quarterly results within 45 days; however, market regulator Sebi had provided an extra month to file results under Ind-AS format for the June and September quarter. So companies had time till September 15 and December 15 as against the normal deadline of August 15 and November 15 respectively.

Most bluechip companies didn’t require the extra month provided by Sebi and filed their results under the new format within the normal deadline, analysis of Capitaline data shows. Meanwhile, a fifth of BSE 500 companies, particularly in the PSU space, filed their numbers just ahead of the extended deadline. Nearly two dozen companies filed their results in the three days of this week.

“At the start of the quarter, there were concerns whether India Inc will be able to adopt Ind-AS but things look largely settled. Companies have missed the deadline but they are few,” said Ashish Gupta, director, Grant Thornton Advisory.

Surana Industries is one such company that has missed the deadline. It cited “practical difficulties in implementing the Ind-AS” in an exchange filing.

“Ind-As is not a simple transition. It’s a whole accounting transition, which involves making intelligent choices. You have to prepare well in advance,” said Gupta.

Rating agency Icra says the new accounting format has had a huge impact operating income and net profits. “Around 53 per cent companies have reported a decline in operating income (net of excise) under Ind AS… ICRA observes that the change in calculation of deferred tax and the adoption of fair valuation of financial instruments has had the biggest impact on the net profits of the companies,” the rating agency said in a note.

Both listed and unlisted companies have been provided a roadmap for implementation of Ind-AS by the Ministry of Corporate Affairs (MCA). Ind-AS is made mandatory from 2016-17 for companies with net worth of over Rs 500 crore. All other listed companies and unlisted companies with net worth of less than Rs 250 crore will have to implement it from 2017-18. MCA allowed voluntary adoption of Ind-AS starting 2015-16.

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