1. Ind AS December 2014 Presented by Price Waterhouse & Co. Shrenik Baid
Price Waterhouse & Co.

2. Agenda Ind AS in India Ind AS 101-First-time Adoption of Ind-AS
December 2014

3. 1 Ind AS in India Where are we? Adoption timelines
Fundamental areas in which Indian GAAP and Ind-AS differ 1
December 2014

4. Where are we? Roadmap - ICAI - 24 March, 14*
Comparative period
a) Equity/ debt securities are listed or in process of listing
on any stock exchange in India or outside India
b) Net worth# >= Rs. 500 crore
c) Holding, subsidiary, joint venture or associate of companies covered under above
Transition date April 1, 2015
Only for consolidated financial statements
*Mandatory adoption date for specified companies as per roadmap finalized by ICAI Council as on 24 March, 2014 and submitted to MCA for it’s consideration.
Roadmap for banks, NBFCs and Insurance Companies will be decided in consultation with RBI and IRDA.
# Net worth = Share Capital + Reserves – Revaluation as at 31 March, 2014 audited standalone financial statements
December 2014
Price Waterhouse & Co.

5. First Ind-AS Reporting period
Adoption timelines
Equity
P&L
Ind-AS Ind-AS Ind-AS
EGAAP* EGAAP* EGAAP*
First Ind-AS Reporting period
31/12/2014
31/3/2015
Transition Date
Opening balance sheet
31/3/2016
Adoption
Date
31/3/2017
Reporting Date
Closing balance sheet
*EGAAP = Existing GAAP
Herein, the dates have been assumed and are for illustrative purpose only
December 2014
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6. Fundamental areas in which Indian GAAP and Ind-AS differ
Full compliance, qualification not accepted
More guidance
Focus on substance over form
Focus on risks and rewards
Present value and fair value concepts
Estimates
Restatement of previously issued financial statements
Detailed disclosures
December 2014

7. Ind AS 101-First-time Adoption of Ind-AS
2.1 Introduction and Overview
2.2 Exceptions and Exemptions
2.3. Disclosures 2
December 2014

8. Introduction and Overview
2.1
December 2014

9. Introduction and Overview
Objective
Is transparent for users and comparable over all periods presented;
Provides a suitable starting point for accounting under Indian Accounting Standards (Ind-ASs); and
Can be generated at a cost that does not exceed the benefits to users.
Application
To the first Ind AS financial statements ; and
Each interim financial report under Ind-AS in the first period.
Ind AS 101 is different from transition adjustments in each standard and also it is different from change in accounting policies.
Ind AS 101 is for first time adoption of Ind AS only
December 2014

10. Introduction and Overview
Ind AS 101 requires
Identify the period for adoption of Ind AS.
Prepare an opening balance sheet at the date of transition to Ind AS.
Select accounting policies that comply with Ind AS, and apply those policies for all periods presented in the first Ind AS financial statements.
Consider whether to apply any of the optional exemptions from retrospective application.
Apply the mandatory exceptions.
Provide disclosures to explain the transition to Ind AS from Previous GAAP.
The first Ind AS financial statements are:
The first financial statements to contain “an explicit and unreserved statement of compliance with Ind ASs”
December 2014

11. Exceptions and Exemptions
2.2
December 2014

12. Ind AS 101 - Mandatory exceptions summary
Estimates
Non-controlling interests
Government loans
Embedded derivatives
Hedge accounting
Derecognition of financial assets and financial liabilities
Classification and measurement of financial assets
Impairment of financial assets
December 2014
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13. Ind AS 101 - Mandatory exceptions summary Estimates
required by
previous GAAP?
Evidence of error?
Calculation consistent
with Ind AS?
Yes No No
Yes
Yes No
Make estimate
reflecting conditions
at relevant date
Use previous estimate
Use previous
estimate and adjust
to reflect Ind AS
December 2014
Price Waterhouse & Co.

14. Ind AS 101 - Optional Exemptions summary
Business combinations
PPE,
Investment Properties, Intangibles
Cumulative translation differences
Leases
Leases
Share-based payments
Compound Financial Instruments
Assets and liabilities of subsidiaries, associates and joint ventures
Investments in subsidiaries, associates and joint ventures
FV measurement of Financial
Instruments on initial recognition
FV measurement of financial assets or financial liabilities at
initial recognition
Designation of financial assets and
Financial Liabilities
Designation of previously recognised financial instruments
Designation of contracts to buy or sell a non-financial item
Extinguishing financial liabilities with equity instruments
Insurance contracts
Insurance contracts
Compound Instruments
Service concessions arrangements
Investments in subsidiaries, associates and joint control entities
Revenue
Severe hyperinflation
Joint arrangement
Stripping cost
Non-current assets held for sale and discontinued operations
Decommissi--oning liabilities
December 2014
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15. Ind AS 101 - Optional Exemptions summary Business Combinations
Ind AS 103 need not be applied to combinations before date of transition
BUT, if one combination is restated, after a particular date of choice, all subsequent combinations need to be restated
When the exemption is used
No change in classification
Post combination carrying amount deemed cost for assets and liabilities measured at cost
Assets and liabilities measured at fair value restated at date of transition – adjust retained earnings
December 2014
Price Waterhouse & Co.

16. Ind AS 101 - Optional Exemptions summary Business Combinations
Assets and liabilities not recognised at the time of a business combination under previous GAAP are:
Recognized as if subsidiary adopted Ind ASs at the same date
Subsidiaries not consolidated under previous GAAP are:
Consolidated as if subsidiary adopted Ind ASs at the same date
Goodwill is the difference between cost of investment and net assets recognised at date of transition
December 2014
Price Waterhouse & Co.

17. Ind AS 101 - Optional Exemptions summary Business Combinations
Goodwill is recognised at the carrying amount under previous GAAP and adjusted for
Intangibles that are not recognised under Ind AS
Intangibles that must be recognised under Ind AS
Contingent consideration not recognised; and
Tested for impairment
Goodwill deducted from equity remains in equity
December 2014
Price Waterhouse & Co.

18. Ind AS 101 - Optional Exemptions summary Property, Plant and Equipment
For property, plant and equipment, an entity can choose to measure the value using:
• Carrying value as per previous GAAP (para D7AA of Ind AS 101).
Cost in accordance with Ind AS.
• Fair value at the date of transition as deemed cost.
• A revaluation carried out at a previous date (like a IPO) less accumulated depreciation till the date of transition as deemed cost, subject to certain conditions.
This exemption can also be applied to intangible assets that meet the
criteria for revaluation in Ind AS 38 and to investment properties where
the cost method in Ind AS 40 is applied. The exemption may not be used
for any other assets or for liabilities.
If a company elects option under para D7AA, then its Ind AS financial statement will not qualify to be compliant with IFRS.
December 2014
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19. Ind AS 101 - Optional Exemptions summary Other key exemptions
Impact
Cumulative translation differences
The cumulative translation reserve may be reset to zero.
Leases
A company may elect to assess whether an arrangement contains a lease at the date of transition, rather than at the inception of the arrangement.
Share-based payment
transactions
A company may choose (but is not required) to apply Ind AS 102 to any equity instruments that were granted before date of
transition to Ind ASs.
In addition, a company may choose (but is not required) to apply
Ind AS 102 to a liability relating to a cash-settled share-based payment that was settled prior to the date of transition to Ind AS.
Compound financial
instruments
A compound financial instrument does not need to be bifurcated if the liability component is not outstanding at the transition date.
December 2014
Price Waterhouse & Co.

20. Ind AS 101 - Optional Exemptions summary Other key exemptions
Impact
Assets and liabilities of subsidiaries,
associates and joint ventures
A subsidiary that adopts Ind AS later than its parent can elect to apply Ind AS 101 or to use the carrying amounts of its assets and liabilities included in the consolidated financial statements, subject to eliminating any consolidation adjustments.
If a parent adopts Ind AS later than its subsidiary, the parent, in its consolidated financial statements, must measure the assets and liabilities of the subsidiary at the same carrying amounts as in the Ind AS financial statements of the subsidiary, adjusting for normal consolidation entries.
Investments in
subsidiaries, jointly
controlled entities and Associates
In their separate financial statements, first-time adopters can measure their investment in subsidiaries, jointly controlled entities and associates at either:
• Cost, determined in accordance with Ind AS 27;
• fair value at the Ind AS transition date, or
• Deemed cost, defined as previous GAAP carrying amount at the Ind AS transition date.
December 2014
Price Waterhouse & Co.

21. Disclosures
2.3
December 2014

22. Ind AS 101 - Disclosures Comparative information
An entity is mandatorily required to provide comparative financial statements for atleast one period. Entity can provide comparative financial statements for more than one period.
Opening balance sheet (related disclosures in notes) as at transition date to be presented.
Comparative financial statement to be presented in accordance with Ind AS.
Non Ind AS comparative information and historical summaries
Allows entities to disclose non-Ind AS information in the Ind AS financial statement.
Any financial statement information in accordance with previous GAAP shall be labelled as Previous GAAP information and disclose the nature of main adjustments required to make it comply with Ind AS.
Adjustment of GAAP differences on Ind AS transition date
GAAP differences on Ind AS transition date are adjusted directly in retained earnings (or, if appropriate, another category of equity).
December 2014
Price Waterhouse & Co.

23. 3 Adoption of Ind-AS Challenges in adopting Ind-AS Managing the Change
Project Management Framework
Model steps for Ind AS implementation 3
December 2014

24. Challenges in adopting Ind-AS
Managing and communicating the change
Data capturing
Aligning different policies, practices and system across the group having presence in multiple jurisdictions and having different reporting requirements including tax and statutory reporting
Conforming accounting with changes in business
Aligning the business practices considering Ind AS accounting requirements
Training across the organization
Lack of appropriately skilled resources in the market
December 2014

25. Establishing an environment to support the project
Date
Managing the Change
Project Framework
Establishing an environment to support the project
Controls and Documentation
Ensuring the conversion process is controlled and documented
Technical Accounting Advice
Embedding the Change
Creating a sustainable reporting environment
Technical accounting information along with practical application advice
Communication and Knowledge Sharing
Monitoring the pace and communication of the work
December 2014
Price Waterhouse & Co.

26. Project Management Framework
Date
Project Management Framework
A well thought out project structure on lines below ensures that an entity is able to get appropriate management focus on project and on technical front “get it right the first time” which is very essential for a successful project.
Steering Committee
Decision Maker
Auditor
TRC
Technical Review Committee
INVITEES
Issue Originators
Expert
Work Streams
Technical support material
Roles & Responsibilities
Timelines
Nodal offices
Needs
Technical Champions
WS1
WS2
WS3
WS4
Loans
Income recognition
Financial Reporting
Employee benefits
Investments
Derivatives
Consolidation
Ind AS 107
Segmental Reporting
December 2014

27. Model steps for Ind AS implementation
Date
Model steps for Ind AS implementation
Diagnostic study
Identification of key GAAP differences between IGAAP & Ind AS and accounting policy options under Ind AS,
Ind AS 101 – First-time adoption of Ind AS implication,
Finalise accounting policy under Ind AS and optional exemption under Ind AS 101 to be opted.
Ind AS conversion
Quantification of GAAP differences,
Preparation of Ind AS financial statement,
Ensuring completeness of disclosures,
Audit of Ind AS financial statement.
December 2014

28. Thank You Shrenik Baid shrenik.p.baid@in.pwc.com +91-22-6669-1312
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