Everything You Need to Know About Indian Accounting Standards (Ind AS)

Indian Financial Standards (Ind AS) have a significant impact on how companies report their financial statements in India compared to the earlier Accounting Standards. These are issued by the Ministry of Corporate Affairs (MCA) with the aim of presenting a clearer and more comparable picture of the company, as per the International Financial Reporting Standards (IFRS).

What is Ind AS?

Ind AS is a framework acceptable by Indian companies for the preparation of their financial statements. Such rules help to maintain compliance with the international standards. This helps investors, regulators and other stakeholders have a common frame of reference when analysing financial statements and comparing firms in different countries.

Important Features of Ind AS

1. Broad Coverage: Ind AS addresses many aspects of accounting, ensuring consistency in financial reporting.
2. Global Alignment: Ind AS aligns with IFRS, enabling Indian companies to present their financial data in a worldwide recognised format.
3. Detailed Disclosures: Companies must provide comprehensive information in their financial statements to enhance transparency.
4. Fair Value Measurement: In Ind AS, the current market value has to be provided for the business assets and liabilities.

Check out the key difference between IndAS vs IGAAP

Steps to File Ind AS Financial Statements in XBRL Format

According to MCA, companies must use eXtensible Business Reporting Language (XBRL) to file their Ind AS financial statements. XBRL filing provides a more accurate and effective means of conveying financial information.

The following are the nine steps to file Ind AS financial statements in XBRL format:

1. Prepare Financial Statements: Create the company’s financial statements following Ind AS requirements.
2. Download XBRL Tool: Get the XBRL validation tool from the MCA website to check the XBRL document.
3. Mapping Data to MCA Taxonomy: Use the validation tool to map the financial statement data according to the MCA taxonomy. Using the mapped data, create the XBRL instance document.
4. Validation of XBRL Instance Document: Validate the XBRL instance document using the MCA’s validation tool. This step ensures the document adheres to the prescribed taxonomy and validation rules.
5. Rectify Validation Errors: If there are any errors during validation, correct them and re-validate the document.
6. Final Verification: The next step is creating a PDF to check the final instance document.
7. File Form AOC-4 XBRL: Log in to the MCA portal, complete Form AOC-4 XBRL, and attach the validated XBRL document.
8. Submit the Form: After filling out the AOC-4 XBRL forms, perform pre-scrutiny, sign the forms, and upload them on the MCA portal according to the standard eForm filing process.
9. View Financial Statements on the MCA Portal: The XBRL documents submitted with Form AOC-4 XBRL are in machine-readable format. MCA21 system converts them into human-readable format.

Conclusion

Indian Accounting Standards (Ind AS) align Indian financial reporting with global practices. They enhance the transparency and comparability of financial statements. Filing these statements in XBRL format makes the reporting process more efficient.

DataTracks is your go-to partner to file error-free reports with MCA using Indian Accounting Standards. Contact us at +91 73050 74307 or email enquiry@datatracks.in.