Ind AS is India's converged version of IFRS, not a copy of it. The two frameworks share the same conceptual foundation, the same numbering logic and most of the same recognition and measurement rules, but Ind AS carries a set of deliberate departures known as carve-outs, and it sits legally subordinate to the Companies Act 2013.
A company can be fully Ind AS compliant and still be barred from stating that its financial statements comply with IFRS. For an Indian business this stops being academic in three places: raising capital or debt abroad, reporting into a foreign parent's consolidation, and budgeting an audit.
What Is the Difference Between IFRS and Ind AS?
IFRS are accounting standards issued by the International Accounting Standards Board and applied in more than 140 jurisdictions. Ind AS are Indian standards notified by the Ministry of Corporate Affairs under Section 133 of the Companies Act 2013 through the Companies (Indian Accounting Standards) Rules, 2015. Ind AS follows a convergence approach rather than verbatim adoption, and that convergence choice is the entire source of the difference.
The numbering makes the lineage obvious. Ind AS 101 to Ind AS 116 map to IFRS 1 to IFRS 16, so Ind AS 115 is IFRS 15 on revenue, Ind AS 116 is IFRS 16 on leases and Ind AS 109 is IFRS 9 on financial instruments. Open any two corresponding standards side by side and most paragraphs are word-for-word identical.
Divergence enters through three doors:
🚪 Carve-outs
Paragraphs of the IFRS text that were removed or modified before notification, usually to protect an existing Indian practice or to avoid volatility in reported profit.
🚪 Carve-ins
Additional guidance inserted into Ind AS that has no counterpart in IFRS — most notably Appendix C to Ind AS 103 dealing with common control business combinations.
🚪 Statutory Override
Ind AS operates within the Companies Act 2013. Where a standard conflicts with the Act or with Schedule III, the Act prevails. IFRS carries no equivalent subordination.
Everything else in the IFRS vs Ind AS comparison follows from those three. If your finance team understands why a carve-out exists, the accounting entry usually explains itself. Ind AS advisory and implementation work is largely the business of mapping those gaps before they surface in an audit.
Which Indian Companies Must Apply Ind AS and From When?
Ind AS applies mandatorily to companies crossing the net worth threshold set out in Rule 4 of the Companies (Indian Accounting Standards) Rules, 2015, and to their holding, subsidiary, joint venture and associate companies. The applicability roadmap ran in phases, and once a company enters Ind AS it cannot go back.
| Category | Threshold | Applicable From |
|---|---|---|
| Phase I Companies | Listed or unlisted, net worth ₹500 crore or more | FY 2016-17 |
| Phase II Companies | All listed companies, plus unlisted with net worth ₹250 crore or more | FY 2017-18 |
| NBFCs — Phase I | Net worth ₹500 crore or more | FY 2018-19 |
| NBFCs — Phase II | Listed NBFCs, and unlisted with net worth ₹250 crore or more | FY 2019-20 |
| Banks and Insurers | Implementation deferred by RBI and IRDAI | Not yet notified |
| All Other Companies | Below the thresholds | Continue under AS |
Net worth is computed as defined in Section 2(57) of the Companies Act 2013, on the basis of standalone audited financial statements. The net worth threshold test is a one-way door. A company that crosses ₹250 crore and moves to Ind AS stays on Ind AS permanently, even if its net worth falls back below the limit in a later year. The same applies to voluntary adoption, which is irrevocable.
The group clause catches more companies than the net worth threshold does. A small unlisted company with a net worth of ₹20 crore is pulled into Ind AS purely because it is a subsidiary of a covered parent, and its statutory audit scope changes accordingly from the first reporting period.
What Are the Key IFRS vs Ind AS Differences in Practice?
The practical IFRS vs Ind AS differences cluster around presentation, business combinations, first-time adoption and a handful of measurement carve-outs. The table below sets out the ones that change reported numbers rather than just wording.
| Area | IFRS Treatment | Ind AS Treatment |
|---|---|---|
| Bargain purchase gain (IFRS 3 / Ind AS 103) | Recognised in profit or loss | Recognised in OCI and accumulated in capital reserve |
| Common control combinations | Outside the scope of IFRS 3; policy choice applies | Appendix C to Ind AS 103 mandates the pooling of interests method |
| Conversion option in FCCB (Ind AS 32) | Derivative liability — fixed-for-fixed test fails | Classified as equity |
| Presentation format (IAS 1 / Ind AS 1) | Minimum line items only; format is flexible | Division II of Schedule III to the Companies Act 2013 is mandatory |
| Profit or loss and OCI | Single statement or two separate statements | Single Statement of Profit and Loss only |
| Deemed cost on transition (IFRS 1 / Ind AS 101) | Fair value or a revaluation-based deemed cost | Previous GAAP carrying amount permitted as deemed cost |
| Asset-related government grants (IAS 20 / Ind AS 20) | Deferred income or deduction from the asset's cost | Deferred income presentation only |
| Escalating operating lease rentals | Straight-lined over the lease term | No straight-lining where escalation reflects expected general inflation |
| Terminology | Statement of Financial Position | Balance Sheet |
Three of these move real money:
Ind AS 103 — Bargain Purchase
Keeps a potentially large credit out of reported profit. Under IFRS the same acquisition inflates the year's earnings.
Ind AS 32 — FCCB Option
Removes the fair value volatility that an IFRS reporter books through profit or loss every quarter.
Ind AS 101 — Deemed Cost
Lets a first-time adopter carry forward existing PP&E values instead of commissioning a full fair value exercise on the transition date.
The Schedule III Division II requirement is the one finance teams underestimate. It is not a disclosure preference. It fixes line items, sub-classifications, ageing schedules for trade receivables and payables, and a specific set of ratios — none of which IAS 1 asks for.
Why Can Ind AS Financial Statements Not Claim Compliance with IFRS?
IAS 1 permits an entity to make an explicit and unreserved statement of compliance with IFRS only if its financial statements comply with every requirement of every IFRS. Because Ind AS departs from the IFRS text through carve-outs, Ind AS financial statements fail that test and cannot carry an IFRS compliance statement.
This is the single most commercially important point in the whole IFRS vs Ind AS comparison, and it is routinely missed. An Indian company that is Ind AS compliant is not IFRS compliant, however close the two sets of numbers happen to be in a given year.
Do not describe Ind AS financial statements as IFRS compliant in an information memorandum, a loan covenant certificate, an investor deck or a group reporting package.
A company that has to report under both frameworks needs a separate IFRS conversion or a documented reconciliation of the differences, prepared and reviewed alongside the statutory accounts rather than after them.
Where does this bite? A subsidiary reporting into a foreign parent that consolidates under IFRS must submit an IFRS-basis package, so the carve-out adjustments have to be reversed each period. An Indian issuer raising debt or equity offshore faces prospectus requirements that ask for IFRS or US GAAP financial information. And acquirers running diligence on an Indian target frequently restate Ind AS numbers to IFRS before comparing them with the rest of the portfolio.
Building the IFRS reporting bridge into the monthly close, rather than the annual one, is what separates a smooth group audit from a delayed one.
What Is the Difference Between AS, Ind AS and IFRS for an Indian Business?
India runs three frameworks in parallel: the older Accounting Standards for smaller companies, Ind AS for large and listed companies, and IFRS for overseas reporting. AS is historical-cost oriented, Ind AS is fair-value and substance oriented, and IFRS is the global benchmark that Ind AS is converged with.
The difference between AS and Ind AS is far wider than the IFRS vs Ind AS gap. Under AS there is no concept of other comprehensive income, no expected credit loss model, no fair value hierarchy and no single lessee accounting model. AS 22 computes deferred tax on timing differences through the income statement, while Ind AS 12 uses the balance sheet temporary difference approach. AS 19 splits leases into operating and finance for the lessee; Ind AS 116 puts almost every lease on the balance sheet as a right-of-use asset.
For a business, the practical consequence is that a move from AS to Ind AS changes reported net worth, reported profit and most covenant ratios in the same year, without a single change in the underlying business. Lenders and shareholders need to be briefed before the first Ind AS results are published, not after.
Companies still on AS are not exempt from the direction of travel. Threshold-adjacent businesses that expect an acquisition, a fundraise or a listing generally start accounting process alignment a year or two ahead, because the comparative period has to be restated as well.
How Do You Transition from AS to Ind AS?
Transition is governed by Ind AS 101, First-time Adoption of Indian Accounting Standards. The framework requires an opening Ind AS balance sheet at the transition date, restated comparatives, and formal reconciliations of equity and total comprehensive income between the two frameworks.
A company first reporting under Ind AS for FY 2026-27 therefore has a transition date of 1 April 2025 and must restate the whole of FY 2025-26.
- Confirm applicability and fix the transition date. Test net worth against Rule 4 using standalone audited figures, and check whether the group clause pulls you in through a holding or subsidiary relationship. Fix the transition date and the comparative period in writing.
- Run a gap assessment before touching the ledger. Map each material balance and transaction stream to the corresponding Ind AS, and list where treatment changes. Financial instruments, revenue contracts, leases, employee benefits and business combinations produce the largest adjustments in most Indian groups.
- Select the Ind AS 101 exemptions and elections. Ind AS 101 offers optional exemptions and mandatory exceptions, and the choices are not reversible later. The deemed cost election for property, plant and equipment, and the decision on whether to restate past business combinations, are the two that most affect the opening balance sheet.
- Build the opening Ind AS balance sheet and reconciliations. Prepare the balance sheet at the transition date and the two reconciliations Ind AS 101 requires: equity at the transition date and at the end of the comparative period, and total comprehensive income for the comparative period.
- Remap the chart of accounts to Schedule III Division II. Ind AS reporting is only half the work; the presentation format is the other half. Rebuild the chart of accounts, the ageing schedules and the ratio disclosures to Division II before the first close, not during it.
- Model the tax consequences early. Section 115JB(2A) of the Income Tax Act sets out how book profit is computed for MAT purposes for Ind AS companies, and the transition amount is generally spread over five years. Tax advisory input belongs in the transition project, not after it.
- Restate comparatives, complete disclosures and brief stakeholders. Restate the comparative period in full, draft the expanded Ind AS disclosures, and take lenders, the audit committee and investors through the movement in equity and profit before results are announced. Strengthening internal controls over the new estimates is part of the same exercise.
How Has Indian Accounting Standard-Setting Changed Since 1991?
India moved from recommendatory, historical-cost accounting to a statutory framework converged with global standards in roughly three decades. The path explains why the IFRS vs Ind AS gap looks the way it does — carve-outs included.
1991
Schedule VI Era
Financial reporting followed Schedule VI to the Companies Act 1956. ICAI set up its Accounting Standards Board in 1977 but standards were largely recommendatory with light enforcement.
Liberalisation Changes the Audience
Foreign investment and overseas depositary receipt programmes meant Indian numbers were being read by investors working in IFRS or US GAAP. AS received statutory backing via Companies (Accounting Standards) Rules, 2006.
Companies Act 2013 — Legal Architecture
Section 133 gave the central government power to prescribe standards. The Companies (Indian Accounting Standards) Rules, 2015 notified Ind AS with the phased roadmap. All rules and amendments published at mca.gov.in.
NFRA Established
Section 132 established the National Financial Reporting Authority as an independent regulator over listed and large companies and their auditors.
GST & MAT Provisions
GST created a parallel transaction record that rarely aligns with Ind AS 115 revenue timing, making reconciliation a standing audit procedure. The Finance Act 2017 inserted MAT provisions for Ind AS companies.
Frequently Asked Questions About IFRS vs Ind AS
Is Ind AS the same as IFRS?
No. Ind AS is converged with IFRS, not identical to it. The Ministry of Corporate Affairs notified Ind AS with a set of carve-outs and carve-ins that modify the IFRS text, and Ind AS operates subordinate to the Companies Act 2013, which IFRS does not.
The practical effect of the IFRS vs Ind AS gap is that financial statements prepared under Ind AS cannot carry an unreserved statement of compliance with IFRS. Most recognition and measurement rules are the same, but a handful of differences change reported profit and equity.
Which companies are required to follow Ind AS in India?
Ind AS is mandatory for all listed companies, for unlisted companies with a net worth of ₹250 crore or more, and for the holding, subsidiary, joint venture and associate companies of any covered entity.
Non-banking financial companies came in under a separate roadmap from FY 2018-19 and FY 2019-20 depending on net worth. Banks and insurance companies remain deferred pending RBI and IRDAI notification. Companies below the thresholds continue to apply Accounting Standards under the Companies (Accounting Standards) Rules, 2021.
What are Ind AS carve-outs and why do they exist?
Carve-outs are paragraphs of the IFRS text that were deliberately removed or modified before Ind AS was notified in India. They exist for three reasons: to avoid volatility in reported profit that Indian preparers and regulators considered unhelpful, to preserve an established Indian practice such as the treatment of foreign currency convertible bonds, and to keep the standards consistent with the Companies Act 2013.
The best-known examples are the treatment of bargain purchase gains under Ind AS 103 and the equity classification of FCCB conversion options under Ind AS 32.
Can a company voluntarily adopt Ind AS?
Yes. Rule 4(1)(i) of the Companies (Indian Accounting Standards) Rules, 2015 permits any company to adopt Ind AS voluntarily. Indian subsidiaries of foreign groups often do so to align statutory reporting with the parent's consolidation basis.
The decision is irrevocable: once a company prepares financial statements under Ind AS it must continue to do so in every subsequent year, regardless of net worth. Voluntary adopters must also comply in full, including the Schedule III Division II presentation format and the Ind AS 101 transition reconciliations.
What is the difference between AS and Ind AS?
AS is the older, historical-cost oriented framework; Ind AS is fair-value and substance oriented. AS has no concept of other comprehensive income, no expected credit loss model and no fair value hierarchy.
Deferred tax under AS 22 follows a timing difference approach through the income statement, while Ind AS 12 uses the balance sheet temporary difference approach. AS 19 keeps operating leases off the lessee's balance sheet; Ind AS 116 recognises a right-of-use asset for almost all leases. Consolidation shifts from voting power under AS 21 to a control model under Ind AS 110.
