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New AS: ball now in industry’s court

KR Srivats New Delhi | Updated on January 23, 2018 Published on August 06, 2015

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Advisory committee on standards to seek views of three chambers

The National Advisory Committee on Accounting Standards (NACAS) on Wednesday decided to go in for further industry consultations to decide whether adoption of a key new revenue standards need to be pushed back or not.

The new revenue standard — Ind AS 115 — is slated to be implemented from April 1, 2016 and could radically change the way revenue is recognised in several industries, including telecom and software.

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Indian standard setters are debating whether this effective date needed to be deferred 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.

“We have now decided to write to all the three industry chambers — FICCI, CII and Assocham — seeking their views on the matter,” Amarjit Chopra, Chairman, NACAS, told BusinessLine here.

NACAS is likely to meet this month end to discuss the response from apex industry chambers.

At Thursday’s NACAS meeting, the CA institute had left it to the committee to take a call on the issue. It is widely perceived the CA institute is keen on avoiding any deferral of Ind AS 115.

“The Central council (CA Institute) had not given any view on this matter. It has left it to NACAS,” Chopra said.

Later, CA Institute President Manoj Fadnis said it will be better to take a call on this issue only after industry understood the pros and cons of adopting the new standard.

“To us, IFRS 15 is a superior standard. However, if industry feels implementation will be difficult, then it should be ready to adopt Ind AS 18 and Ind AS 11 for few years before moving to Ind AS 115. Our effort is to develop more consensuses within industry,” Fadnis said.

Deferral impact

Charanjit Attra, Partner, SR Batliboi & Associates LLP, said views of the industry need to be heard before any decision is taken on the issue. The impact of any deferral of Ind AS 115 on other Ind AS standards should also be considered, Attra said.

Pankaj Chadha, Partner in a member firm of EY, said IASB’s decision to defer implementation with an option for early adoption will be most suited (for India). This would permit Indian companies to fully absorb the changes that this standard entails, he added.

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Published on August 06, 2015
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