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CA Final · Financial Reporting · Introduction to Indian Accounting Standards

Meghdoot Pharma Ltd, an unlisted company, has net worth of Rs 180 crore as at 31 March of the preceding year and has no listed or to-be-listed securities, and its holding, subsidiary, associate and joint venture entities are all unlisted with net worth below Rs 250 crore. Under the Companies (Indian Accounting Standards) Rules, 2015, what is the position on Ind AS applicability to Meghdoot Pharma Ltd?

Ind AS is not mandatory for Meghdoot Pharma. It is unlisted, its net worth of Rs 180 crore is below the Rs 250 crore threshold, and no group entity is covered. It continues with Accounting Standards but may voluntarily adopt Ind AS.

  1. AInd AS is compulsory because net worth exceeds Rs 100 crore
  2. BInd AS is compulsory because it is a pharmaceutical company
  3. CInd AS is not mandatory and the company continues with Accounting Standards, though it may voluntarily adopt Ind ASCorrect
  4. DInd AS is mandatory only for its consolidated financial statements

Explanation

Mandatory Ind AS applies to listed or to-be-listed companies and to unlisted companies with net worth of Rs 250 crore or more, including holding, subsidiary, associate and JV of such companies. Meghdoot meets none of these, so Ind AS is not mandatory, though voluntary adoption is allowed. The Rs 100 crore figure is a wrong threshold.

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