AS vs Ind AS vs IFRS

A Complete Guide with Applicability Limits, Standards, Functions, Conceptual Differences & Practical Impact

Financial reporting frameworks determine how companies measure profit, assets, liabilities, and disclosures. In India, companies may follow AS (Indian GAAP) or Ind AS, while globally many follow IFRS.

This comprehensive guide combines:

• Meaning and issuing authority
• Applicability limits (Net worth thresholds)
• Phase-wise implementation
• Major standards list
• Core conceptual differences
• Functional comparison
• Practical impact

1. Accounting Standards (AS) – Indian GAAP

Issued By

• Institute of Chartered Accountants of India
• Notified by Ministry of Corporate Affairs

Legal Base

• Companies Act, 2013
• Accounting Standards Rules

Applicability (Current Position)

AS applies to:

• Unlisted companies with Net Worth below ₹250 crore
• Private companies not meeting Ind AS threshold
• Companies not voluntarily adopting Ind AS

Net Worth Calculation

Paid-up Capital

• Reserves – Accumulated Losses – Deferred Expenditure

Based on latest audited financial statements.

SME Classification under AS (Disclosure Relaxation)

Level II & III entities get disclosure exemptions.

Main Focus of AS

• Historical Cost Accounting
• Conservative income recognition
• Rule-based framework
• Simpler disclosures
• Creditor protection orientation

Important AS Standards (Comprehensive List)

• AS 1 – Accounting Policies
• AS 2 – Inventories
• AS 3 – Cash Flow Statement
• AS 4 – Contingencies
• AS 5 – Net Profit/Loss
• AS 7 – Construction Contracts
• AS 9 – Revenue Recognition
• AS 10 – Property, Plant & Equipment
• AS 11 – Foreign Exchange
• AS 13 – Investments
• AS 14 – Amalgamations
• AS 15 – Employee Benefits
• AS 16 – Borrowing Costs
• AS 17 – Segment Reporting
• AS 18 – Related Party
• AS 19 – Leases
• AS 20 – EPS
• AS 22 – Income Taxes
• AS 26 – Intangible Assets
• AS 28 – Impairment
• AS 29 – Provisions

2. Indian Accounting Standards (Ind AS)

Issued By

• ICAI
• Notified by MCA under Companies Act

Ind AS is converged with IFRS (with carve-outs and carve-ins).

Phase-wise Applicability

Phase I (From 1 April 2016)

• Listed companies with Net Worth ≥ ₹500 Cr
• Unlisted companies with Net Worth ≥ ₹500 Cr
• Holding, subsidiary, JV, associate of above

Phase II (From 1 April 2017)

• Listed companies with Net Worth < ₹500 Cr
• Unlisted companies with Net Worth ≥ ₹250 Cr
• Holding, subsidiary, JV, associate

Current Mandatory Threshold

Ind AS applies if:

• Net Worth ≥ ₹250 Crore
• Listed (Equity or Debt)
• In process of listing

NBFC Applicability

From 1 April 2018:

• NBFCs with Net Worth ≥ ₹500 Cr

From 1 April 2019:

• NBFCs with Net Worth ₹250–500 Cr

Voluntary Adoption

Companies with Net Worth ≥ ₹250 Cr may voluntarily adopt Ind AS (cannot revert).

Main Focus of Ind AS

• Fair value measurement
• Substance over form
• Expected Credit Loss (ECL)
• Control-based consolidation
• Investor-oriented reporting
• Extensive disclosures

Major Ind AS Standards

• Ind AS 1 – Presentation
• Ind AS 2 – Inventories
• Ind AS 7 – Cash Flow
• Ind AS 8 – Accounting Policies
• Ind AS 10 – Events After Reporting
• Ind AS 12 – Income Taxes
• Ind AS 16 – PPE
• Ind AS 19 – Employee Benefits
• Ind AS 21 – Forex
• Ind AS 23 – Borrowing Costs
• Ind AS 24 – Related Party
• Ind AS 27 – Separate FS
• Ind AS 28 – Associates
• Ind AS 32 – Financial Instruments (Presentation)
• Ind AS 33 – EPS
• Ind AS 36 – Impairment
• Ind AS 37 – Provisions
• Ind AS 38 – Intangible Assets
• Ind AS 40 – Investment Property
• Ind AS 41 – Agriculture
• Ind AS 101 – First-time Adoption
• Ind AS 103 – Business Combination
• Ind AS 107 – Financial Instrument Disclosure
• Ind AS 109 – Financial Instruments
• Ind AS 110 – Consolidation
• Ind AS 111 – Joint Arrangements
• Ind AS 113 – Fair Value
• Ind AS 115 – Revenue
• Ind AS 116 – Leases

3. IFRS – International Financial Reporting Standards

Issued By

International Accounting Standards Board

Applicability

Mandatory or permitted in:

• European Union
• Australia
• Canada
• Most developed economies
• Multinational corporations
• Companies listed overseas

India does not adopt IFRS directly but follows Ind AS (converged framework).

Main Focus of IFRS

• Principle-based accounting
• Fair value orientation
• Capital market transparency
• Global comparability
• Investor protection

Major IFRS & IAS Standards

IFRS Series

• IFRS 1 – First-time Adoption
• IFRS 2 – Share-based Payment
• IFRS 3 – Business Combination
• IFRS 5 – Non-current Assets Held for Sale
• IFRS 7 – Financial Instrument Disclosure
• IFRS 9 – Financial Instruments
• IFRS 10 – Consolidation
• IFRS 11 – Joint Arrangements
• IFRS 12 – Interest in Other Entities
• IFRS 13 – Fair Value
• IFRS 15 – Revenue
• IFRS 16 – Leases
• IFRS 17 – Insurance Contracts

IAS Series (Still Active)

• IAS 1 – Presentation
• IAS 2 – Inventories
• IAS 7 – Cash Flow
• IAS 8 – Accounting Policies
• IAS 12 – Income Taxes
• IAS 16 – PPE
• IAS 19 – Employee Benefits
• IAS 21 – Forex
• IAS 23 – Borrowing Costs
• IAS 24 – Related Party
• IAS 36 – Impairment
• IAS 37 – Provisions
• IAS 38 – Intangible Assets
• IAS 40 – Investment Property

Detailed Comparative Analysis

Core Conceptual Shift

1. Historical Cost → Fair Value
2. Legal Ownership → Economic Control
3. Incurred Loss → Expected Loss
4. Compliance Reporting → Investor Reporting

Applicability Decision Logic

If company is:

• Small private company → AS
• Net worth ≥ ₹250 Cr → Ind AS
• Listed outside India → IFRS
• Subsidiary of Ind AS company → Ind AS mandatory

Final Practical Summary

AS is conservative and compliance-oriented.

Ind AS aligns India with global financial reporting.

IFRS is the international capital market language.

Transitioning from AS to Ind AS significantly impacts:

• Net profit
• Net worth
• Debt-equity ratio
• EBITDA
• Lease liabilities
• Financial instrument valuation