Advanced Accounting · Introduction to Accounting Standards

Overview of Indian Accounting Standards (Ind AS) and Convergence with IFRS

Updated 5 October 2026

Ind AS are Indian Accounting Standards converged with IFRS and notified under the Companies (Indian Accounting Standards) Rules, 2015. They apply to companies in phases based on listing and net worth; all other companies follow AS. To answer questions, check listing, net worth thresholds and group links, then name the right standard set.

Understand Overview of Indian Accounting Standards (Ind AS) and Convergence

Accounting Standards (AS) are the older set of standards, AS 1 to AS 29, that most of your Advanced Accounting paper is built on. They are fairly rule-based and mostly use historical cost. They were written for Indian conditions and not copied from any global set.

Ind AS are Indian Accounting Standards. They are based on IFRS (International Financial Reporting Standards issued by the IASB). The idea is simple: if Indian companies report on the same basis as companies worldwide, investors can compare them and Indian companies can raise money abroad more easily. This move from AS towards IFRS-based standards is called convergence. It is not full adoption. India made a few changes (called carve-outs) where IFRS did not suit Indian conditions or law.

Ind AS were notified by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015. Ind AS are more principle-based. They lean on fair value, and they stress substance over legal form. They also cover areas that AS never did, such as financial instruments (Ind AS 32, 107 and 109) and fair value measurement (Ind AS 113).

The roadmap says who must use Ind AS. It works in phases, and the test depends on listing and net worth.

Phase I applied from 1 April 2016 (with voluntary adoption allowed from 1 April 2015). It covered (i) companies whose equity or debt securities are listed (or in the process of listing) on stock exchanges in India or outside India and that have net worth of ₹500 crore or more, and (ii) other unlisted companies with net worth of ₹500 crore or more. The holding, subsidiary, joint venture and associate companies of these were covered too.
Phase II applied from 1 April 2017. It covered companies whose equity or debt securities are listed (or in the process of listing), other than on an SME exchange, that were not covered in Phase I, and unlisted companies with net worth of ₹250 crore or more but below ₹500 crore. The holding, subsidiary, joint venture and associate companies of all these were covered too. So a main-board listed company with net worth below ₹500 crore falls in Phase II.

Companies listed or in the process of listing only on SME exchanges are outside the roadmap altogether. This exclusion applies to the roadmap generally, not to one phase only. Banks, insurance companies and NBFCs follow their own separate roadmaps. Any company can also opt in voluntarily. Once a company enters Ind AS, it must continue with Ind AS in all later years.

Companies outside this roadmap continue with AS. Under AS they are further split into Level I, II and III entities for exemptions. In CA Intermediate, your numerical work is in AS. The Ind AS overview is tested as theory, comparison and applicability.

Key rules to remember

Phase I (from 1 April 2016): (i) Listed (or in process of listing) on stock exchanges in India or outside India with net worth ≥ ₹500 crore, or (ii) other unlisted company with net worth ≥ ₹500 crore → Ind AS mandatory (plus holding, subsidiary, JV, associate); Voluntary adoption was allowed from 1 April 2015. Net worth of ₹500 crore or more is the test for both listed and unlisted companies in this phase. Companies listed only on SME exchanges are outside the roadmap.
Phase II (from 1 April 2017): Listed (or in process of listing) companies, other than on an SME exchange, not covered in Phase I, or unlisted companies with net worth ≥ ₹250 crore but below ₹500 crore → Ind AS mandatory (plus holding, subsidiary, JV, associate); Companies listed or in the process of listing only on an SME exchange are not forced into Ind AS. This SME exclusion applies to the roadmap generally, not only to Phase II.
Group rule: Holding, subsidiary, JV or associate of a company that must use Ind AS → also uses Ind AS; This catches small unlisted companies that sit inside a large group.
No exit rule: Once Ind AS applies (mandatory or voluntary) → Ind AS applies for all subsequent years; Reverting to AS is not allowed.
Standard set: Not covered by Ind AS rules → follow AS (Level I, II or III for exemptions); Check Ind AS first. If it does not apply, AS applies.
AS to Ind AS mapping (common pairs): AS 2 → Ind AS 2; AS 3 → Ind AS 7; AS 10 → Ind AS 16; AS 11 → Ind AS 21; AS 12 → Ind AS 20; AS 15 → Ind AS 19; AS 16 → Ind AS 23; AS 18 → Ind AS 24; AS 20 → Ind AS 33; AS 22 → Ind AS 12; AS 25 → Ind AS 34; AS 28 → Ind AS 36; AS 29 → Ind AS 37; Also: AS 6 → Ind AS 16 (broadly, for depreciation); AS 13 → Ind AS 109 (and Ind AS 27/28 for investments in subsidiaries, associates and JVs); AS 17 → Ind AS 108; AS 19 → Ind AS 116; AS 21 → Ind AS 110; AS 26 → Ind AS 38; AS 14 → Ind AS 103; AS 24 → Ind AS 105; AS 7 and AS 9 → Ind AS 115 (largely). Caution: these mappings are approximate, not strictly one-to-one. AS 13 is split across more than one Ind AS. AS 14 (amalgamations) matches Ind AS 103 (business combinations, acquisition method only) only broadly. AS 10 matches Ind AS 16 only in part.

How to solve Overview of Indian Accounting Standards (Ind AS) and Convergence questions

Use this method for any question on applicability, convergence or AS versus Ind AS.

1Read the question and mark the facts given: listed or unlisted, stock exchange (main board or SME), net worth, and any holding, subsidiary, associate or JV link.
2Check whether the entity is a bank, insurance company or NBFC. If so, say it follows its own roadmap and answer only what is asked.
3Test Phase I: listed (or in process of listing) or unlisted, with net worth of ₹500 crore or more. Then test Phase II: listed (or in process of listing) companies not covered in Phase I, or unlisted companies with net worth of ₹250 crore or more but below ₹500 crore. A company listed only on an SME exchange is outside the roadmap.
4Test the group link. If a holding, subsidiary, associate or JV company must use Ind AS, the entity must too.
5State the conclusion clearly: Ind AS mandatory, Ind AS voluntary, or AS applies. If AS applies, mention which level (I, II or III) only if the question needs it.
6For comparison questions, write 4 to 6 points in pairs: basis, measurement, approach (rule-based or principle-based), and examples such as deferred tax.
7For list or mapping questions, write the AS number with the full title, then the matching Ind AS number. Treat the mapping as approximate.

Quickest way: Three-question check for applicability, and a quick comparison format

When to use it: Use this for MCQs on applicability and for short written answers when time is tight.

Ask 1: Is it a bank, insurance company or NBFC? If yes, it has a separate roadmap, so look at the option that says so.
Ask 2: Does any one of these hold? It has net worth of ₹500 crore or more (listed or unlisted); it is a listed or in-process-of-listing company on a main-board exchange (not on an SME exchange) not covered by the first test; or it is an unlisted company with net worth of ₹250 crore or more but below ₹500 crore. If yes, Ind AS applies. A company listed only on an SME exchange is outside the roadmap.
Ask 3: Is it linked as holding, subsidiary, associate or JV to an Ind AS company? If yes, Ind AS applies.
If all three answers are no, AS applies. Eliminate any MCQ option that allows going back from Ind AS to AS.
For written comparisons, use the format: Point | AS | Ind AS. Write one line each for basis, orientation, measurement, deferred tax approach and coverage. Each correct pair earns marks.
Distractor warning: MCQ options often swap ₹500 crore and ₹250 crore, or say Ind AS applies only to listed companies. Both are wrong.

Common mistakes in Overview of Indian Accounting Standards (Ind AS) and Convergence

Saying Ind AS applies to all listed companies without exception.
Students remember Phase II as 'listed companies' and forget the SME exchange exclusion.
Fix: Write 'listed companies other than those listed only on an SME exchange'.
Applying the net worth test to the company alone and ignoring group links.
The group rule is easy to miss because the question gives a small net worth figure.
Fix: Always ask whether the company is a holding, subsidiary, associate or JV of an Ind AS company.
Writing that Ind AS is a word-for-word copy of IFRS.
The word 'convergence' is read as 'adoption'.
Fix: Say Ind AS is converged with IFRS and has a few carve-outs and changes for Indian conditions.
Mixing up AS numbers with Ind AS numbers, for example calling the cash flow standard Ind AS 3.
The two series do not match number by number.
Fix: Learn the pairs in groups. Cash flows is AS 3 and Ind AS 7. Taxes on income is AS 22 and Ind AS 12. Do not assume the numbers match, and remember the mapping is approximate (for example AS 10 maps to Ind AS 16 only in part, and AS 14 to Ind AS 103 only broadly).
Treating every number from AS 1 to AS 29 as a live standard, or assuming the only gap in the series is AS 8.
Students assume the series runs unbroken from 1 to 29, or remember one withdrawn standard and take the rest as complete.
Fix: Write that AS 8 (Research and Development) was withdrawn and its subject merged into AS 26 Intangible Assets. Do not assume AS 8 is the only point to check. Verify the list of live standards, including AS 6 Depreciation Accounting, against the current ICAI study material and the Rules before you memorise it. Also remember the AS to Ind AS mapping is approximate.
Using Ind AS treatment in numerical answers for an AS chapter.
Students blend the overview with chapter content.
Fix: Unless the question says Ind AS, solve under AS. This is the CA Intermediate approach for the numerical chapters.

Worked examples

Example 1

State with reasons whether Ind AS is applicable to each company (assume the financial year is after the phases have begun and none is a bank, insurance company or NBFC): (a) An unlisted company with net worth of ₹180 crore, not linked to any Ind AS company. (b) An unlisted company with net worth of ₹40 crore that is a subsidiary of a company required to follow Ind AS. (c) A company listed on a main-board stock exchange with net worth of ₹120 crore.

Show the solution

Case (a): The company is unlisted, so only the net worth test applies. ₹180 crore is below ₹250 crore, so it falls outside Phase I and Phase II. It has no group link, so the group rule does not apply.
Case (b): The company's own net worth is small, but it is a subsidiary of a company that must use Ind AS. The group rule applies, so it must also use Ind AS.
Case (c): The company is listed on a main-board exchange, not an SME exchange. Its net worth of ₹120 crore is below ₹500 crore, so it is not covered in Phase I. Phase II covers listed companies not covered in Phase I, so it falls in Phase II and Ind AS applies.

Answer: (a) Ind AS is not mandatory; it follows AS, though it may opt for Ind AS voluntarily and could not then go back. (b) Ind AS is mandatory because it is a subsidiary of an Ind AS company. (c) Ind AS is mandatory under Phase II because it is listed on a main-board exchange and is not covered in Phase I.

Example 2

Distinguish between AS and Ind AS in four points, and give the Ind AS that corresponds to AS 20 and AS 22.

Show the solution

Point 1, basis: AS were developed on Indian practice and ICAI pronouncements. Ind AS are converged with IFRS, with some carve-outs.
Point 2, approach: AS are more rule-based. Ind AS are more principle-based and stress substance over form.
Point 3, measurement: AS mainly use historical cost. Ind AS use fair value in many areas, such as financial instruments and business combinations.
Point 4, coverage and deferred tax: Ind AS cover areas that AS do not, such as financial instruments and fair value measurement. For deferred tax, AS 22 uses the income statement approach (timing differences). Ind AS 12 uses the balance sheet approach (temporary differences).
Mapping: AS 20 Earnings Per Share corresponds to Ind AS 33. AS 22 Taxes on Income corresponds to Ind AS 12 Income Taxes.

Answer: AS differ from Ind AS in basis (Indian practice versus IFRS-converged), approach (rule-based versus principle-based), measurement (historical cost versus more fair value) and coverage, including deferred tax (timing versus temporary differences). AS 20 corresponds to Ind AS 33, and AS 22 corresponds to Ind AS 12.

Exam tips

Learn the two net worth figures, ₹500 crore and ₹250 crore, and attach each to its phase. Examiners use these figures in MCQ distractors.
Practise applicability case questions in a fixed order: bank or NBFC check, net worth or listing check, group check, conclusion.
For comparison answers, use a two-column format with clear points. It reads fast and each point can earn a mark.
Memorise the titles of the live standards in the AS 1 to AS 29 series, noting that AS 8 was withdrawn (its subject is merged into AS 26). Check the full list, including AS 6, against the current ICAI material. Also learn the 10 to 12 most common Ind AS pairs, remembering the pairs are approximate. List-matching MCQs are easy marks.
Do not spend time on IFRS technical detail. At this level, understand why convergence happened, how the roadmap works, and how AS and Ind AS differ.

Practice questions from Introduction to Accounting Standards

Overview of Indian Accounting Standards (Ind AS) and Convergence: frequently asked questions

What is the difference between AS and Ind AS?

AS are the older Indian standards, AS 1 to AS 29, which are more rule-based and mostly use historical cost. Ind AS are converged with IFRS, are more principle-based and use fair value in many areas. Ind AS also cover topics like financial instruments that AS do not.

Is Ind AS the same as IFRS?

No. Ind AS are converged with IFRS, but India made some changes, called carve-outs, to suit Indian law and conditions. So Ind AS are very close to IFRS but not identical.

Which companies must follow Ind AS?

It depends on the roadmap. Phase I covers companies listed or in the process of listing on stock exchanges with net worth of ₹500 crore or more, and other unlisted companies with net worth of ₹500 crore or more. Phase II covers listed or in-process-of-listing companies (other than on an SME exchange) not covered in Phase I, and unlisted companies with net worth of ₹250 crore or more but below ₹500 crore. Companies listed only on SME exchanges are outside the roadmap. Holding, subsidiary, associate and JV companies of those covered are also covered. Banks, insurance companies and NBFCs follow their own roadmaps. Other companies follow AS.

Which accounting standards are in the AS 1 to AS 29 list?

The numbering runs from AS 1 to AS 29, but not every number is a live standard. AS 8 (Research and Development) was withdrawn and its subject merged into AS 26 Intangible Assets. Do not assume AS 8 is the only gap. Check the list of live standards, including AS 6 Depreciation Accounting, against the current ICAI study material. When you map AS to Ind AS, remember the pairs are approximate: for example, AS 10 maps to Ind AS 16 only in part, AS 6 corresponds broadly to Ind AS 16 for depreciation, and AS 13 is covered broadly by Ind AS 109 (and by Ind AS 27/28 for investments in subsidiaries, associates and JVs).

Can a company go back from Ind AS to AS?

No. Once a company adopts Ind AS, whether it was mandatory or voluntary, it must continue to follow Ind AS in all later years.