Educational Material on Ind AS 101 First-Time Adoption of Indian Accounting Standards

Educational Material on Ind AS 101 First-Time Adoption of Indian Accounting Standards

Ind AS 101 First-Time Adoption of Indian Accounting Standards : Ind AS 101 prescribes the accounting principles for first-time adoption of Ind AS. It lays down various ‘transition’ requirements when a company adopts Ind AS for the first time, i.e., a move from Accounting Standards (Indian GAAP) to Ind AS. Conceptually, the accounting under Ind AS should be applied retrospectively at the time of transition to Ind AS. However, to ease the process of transition, Ind AS 101 has given certain exemptions from retrospective application of Ind AS.

Educational Material on Ind AS 101 First-Time Adoption of Indian Accounting Standards

Ind AS 101 First-Time Adoption of Indian Accounting Standards : Ind AS 101 defines various terms used in the Standard. These are contained in Appendix A to Ind AS 101. These definitions are important to understand the requirements of Ind AS 101. Some of the key definitions are given below:

  • Date of transition to Ind AS: The beginning of the earliest period for which an entity presents full comparative information under Ind AS in first Ind AS financial statements.
  • Deemed cost: An amount used as a surrogate for cost or depreciated cost at a given date. Subsequent depreciation or amortisation assumes that the entity had initially recognised the asset or liability at the given date and that its cost was equal to the deemed cost.
  • First Ind AS financial statements: The first annual financial statements in which an entity adopts Indian Accounting Standards (Ind AS), by an explicit and unreserved statement of compliance with Ind AS
  • First Ind AS reporting period: The latest reporting period covered by an entity’s first Ind AS financial statements.
  • First-time adopter: An entity that presents its first Ind AS financial statements.
  • Opening Ind AS balance sheet: An entity’s balance sheet at the date of transition to Ind AS.
  • Previous GAAP: The basis of accounting that a first-time adopter used for its statutory reporting requirements in India immediately before adopting Ind ASs. For instance, companies required to prepare their financial statements in accordance with Section 133 of the Companies Act, 2013, shall consider those financial statements as previous GAAP financial statements.

Objective 

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The objective of Ind AS 101 is to ensure that an entity’s first Ind AS financial statements, and its interim financial reports for part of the period covered by those financial statements, contain high quality information that:

  • is transparent for users and comparable over all periods presented.
  • provides a suitable starting point for accounting in accordance with Ind AS.
  • can be generated at a cost that does not exceed the benefits.

Scope 

An entity shall apply Ind AS 101 in its first Ind AS financial statements and each interim financial report, if any, that it presents in accordance with Ind AS 34 for part of the period covered by its first Ind AS financial statements.

Relevant link to download the Educational Material: 

Educational Material on Ind AS 101 First-Time Adoption of Indian Accounting Standards

Ind AS 101 First-Time Adoption of Indian Accounting Standards : Ind AS 101 provides a suitable starting point for accounting in accordance with Ind AS at a cost that does not exceed the benefits. This Standard grants some mandatory exceptions, and voluntary exemptions from retrospective application of some aspects of other Ind AS . This publication contains summary of Ind AS 101 and Frequently Asked Questions (FAQs) on issues which are expected to be encountered while implementing Ind AS 101.To facilitate the smooth transition from the existing Indian GAAP to Ind-AS and to understand the impact of the said transition,  Ind-AS 101 ‘First time adoption of Ind-AS’ (corresponding to IFRS 1) has been issued. The standard provides guidance on requirements on the preparation and presentation of financial statements by entities that are adopting the Ind-AS for the first time.

Steps in transition to Ind AS 101 First-Time Adoption of Indian Accounting Standards

  • Use of Ind-AS and Opening Ind-AS Balance Sheet.
  • Opening reconciliation and Comparatives for first Ind-AS BS.
  • Accounting Policies and Recognition and de-recognition.
  • Exemptions provided by Ind-AS 101 and Presentation and Disclosure.
  • Key exemptions- Mandatory , Estimates  and Hedge accounting.
  • Impairment of financial assets and Classification and measurement of financial assets.
  • De-recognition of financial instruments  and Non-controlling interests.
  • Embedded derivatives ,Government loan and Key exemptions- Optional.
  • Business combinations  and Non-current assets held for sale and discontinued operations.
  • Long term foreign currency monetary items , Leases and Deemed cost.
  • Share-based payment transactions, Carve-outs-Differences with IFRS and Foreseeable implications. 

Relevant link to download the Educational Material: 

Educational Material on Ind AS 101 First-Time Adoption of Indian Accounting Standards 

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Educational Material on Ind AS 101 First-Time Adoption of Indian Accounting Standards

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