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Editorial Board on Accounts and Audit
  • Ind AS entries

    by Manikanta on Monday, October 22, 2018 at 01:03 PM

    In case of first time adoption of FS, lets say the transition date is 01 Apr, 2018, the Ind AS entries relation to the period FY 16-17 to be passed in same period by reopening the old books of accounts? Please let me know where it is mentioned in Standards SA 101? Thanks in advance

    Replied byEditorial Board Wednesday, October 31, 2018 at 04:33 PM

    Ind AS 101, First-time Adoption of Indian Accounting Standards, defines ‘date of transition to Ind AS’ as the beginning of the earliest period for which an entity presents full comparative information under Ind AS in first Ind AS financial statements. The first annual financial statements in which an entity adopts Ind ASs, by an explicit and unreserved statement of compliance with Ind ASs is considered as its first Ind AS financial statements. It includes at least three Balance sheets, two Statements of profit and loss, two Statements of cash flows and two Statements of changes in equity. The three Balance sheets are an opening Ind AS Balance Sheet at the date of transition to Ind AS, comparative Balance sheet of previous financial year and current year’s Balance sheet.

    If the transition date is 1 April 2018 the first complete Ind AS Financials statements will be for year ending 31 March 2020. The three balance sheets in this case shall be Balance sheet as at 31 March 2020, 31 March 2019 and 1 April 2018.
    However, if FY first complete Ind AS Financial Statements will be for the year ending 31 March 2018 then in this case the three balance sheet shall be Balance sheet as at 31 March 2018, 31March 2018 and 1 April 2017.

    The transition entries shall be passed in books of accounts because if such entries are not passed in books of accounts then there will tremendous efforts for carrying forwarding of balances as per Ind AS. However, in some cases transition entries may not be passed in books of accounts because the efforts for transitioning are more than the efforts of maintaining Ind AS balance separately. The ultimate balances in balance sheet however should be as per Ind AS. For instance, the balances of PPE as fed in database are not changed by a lot of entities while transition to Ind AS. This is because the efforts are tremendous in migration PPE Ind AS balances in ERP and there are chances that depreciation calculations need to amend entirely. Such entities have however disclosed the PPE balances as per Ind AS in their balance sheet by making certain computation in separate workings.

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