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India Inc has called for a two-year deferment of a key new revenue standard that will have a big bearing on how corporates recognised revenues in their financial statements.
Ind AS 115, which is slated to be implemented from April 1 next year, should be implemented from April 1, 2018, representatives of three apex industry chambers told NACAS at a meeting here on Monday.
The National Advisory Committee on Accounting Standards (NACAS) is a body that advises the Centre on the formulation and laying down of the accounting policy and standards for adoption by companies.
At their meeting with NACAS, the three apex chambers – Assocham, FICCI and CII – wanted the implementation of this new revenue standard (Ind AS 115) to be deferred, sources said.
The main ground for seeking deferment was the “uncertainty” around Ind AS 115 in the wake of the International Accounting Standards Board (IASB) putting off the implementation of IFRS 15 (equivalent of Ind AS 115) by one year to January 1, 2018.
India Inc now wants the government to toe the line of the IASB and defer the implementation of Ind AS 115 till April 1, 2018.
Difficulty in implementation of the new revenue standard and non-readiness on part of industry were also highlighted to NACAS, sources said.
When contacted, NACAS Chairman Amarjit Chopra said that the views of industry (seeking deferment) would be considered by NACAS at its next meeting. NACAS is expected to hold its next meeting within 10 days, Chopra told BusinessLine .
He, however, declined to comment on what apex industry chambers had conveyed to him today as regards the implementation date for new revenue standard.
Reacting to the chambers’ move, Pankaj Chadha, partner in a member firm of EY, said that a postponement of the implementation date for Ind AS 115 would enable Indian corporates to follow a two-step approach to transition on this complex standard.
It will also permit global investors in Indian companies to get financial information that is consistent with other corporates in IFRS reporting countries rather than providing financial information under Ind AS 115, which could also be different from finally amended IASB IFRS 15, he said.
Chadha highlighted that IASB is already considering changes to IFRS 15 and there is no real value for Indian companies to go through the full journey of early adoption of Ind AS 115(equivalent of IFRS 15).
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