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CA Final · Financial Reporting · Introduction to Indian Accounting Standards

Meghdoot Textiles Ltd, an unlisted company with net worth of Rs 180 crore, is not a subsidiary, associate or joint venture of any company that is required to follow Ind AS. It has no listed securities and has not filed any documents for listing. Under the Companies (Indian Accounting Standards) Rules, 2015 as applicable to the roadmap, which statement is correct for the company?

Ind AS is not compulsory for Meghdoot Textiles because it is unlisted, has no listed or Ind AS-covered group entities, and its net worth of Rs 180 crore is below the Rs 250 crore threshold. It may, however, voluntarily adopt Ind AS.

  1. AInd AS is compulsory because its net worth is above Rs 250 crore
  2. BInd AS is compulsory because every company with net worth above Rs 100 crore must follow it
  3. CInd AS is compulsory only if the company is a manufacturing company
  4. DInd AS is not compulsory because its net worth is below Rs 250 crore, though it may opt voluntarilyCorrect

Explanation

For unlisted companies not covered otherwise, Ind AS applies compulsorily when net worth is Rs 250 crore or more. Here net worth is Rs 180 crore, and there is no listed or group linkage, so Ind AS is not mandatory. The company can still adopt Ind AS voluntarily, but then must follow it for all later periods. The option citing Rs 100 crore uses a wrong threshold.

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