CFR IND AS SUMMARY CHARTS

IND AS 1 Presentation of Financial Statements
OVERALL CONSIDERATIONS COMPONENTS OF FINANCIAL STATEMENTS
A complete set of financial statements comprises:
True and fair presentation Going concern Accrual basis of Presentation Materiality and aggregation Offsetting Comparative  A balance sheet at the end of the period
and compliance with IND Financial statements are accounting consistency An entity shall present Offsetting of information  Statement of profit and loss for the period
separately:
ASs, Financial statements required to be prepared Entities are An entity is assets and At least 1 year  Statement of changes in equity for the period
 each material class of 
are required to be on a going concern basis required to use required to similar items liabilities or of comparative Statement of cash flows for the period
presented fairly as set out (unless entity is in accrual basis of retain  Notes comprising a summary of significant accounting policies and other
 items of a dissimilar nature income and information .
explanatory information
in the framework and in liquidation or has ceased accounting presentation and or function expenses is not  Comparative information in respect of the preceding period as specified in
accordance with IND AS trading or there is an except for cash classification unless they are immaterial permitted paragraphs 38 and 38A
and are required to comply indication that the flow from one period except when required by unless required  A balance sheet as at the beginning of the preceding period when an entity
with all requirements of entity is not a going information. to the next. law separately . by other IND ASs applies an accounting policy retrospectively or makes a retrospective restatement
of items in its financial statements, or when it reclassifies items in its financial
IND ASs. concern). statements in accordance with paragraphs 40A–40D
All statements are required to be presented with equal prominence.

STRUCTURE AND CONTENT
IDENTIFICATION OF THE BALANCE SHEET STATEMENT OF PROFIT & LOSS STATEMENT OF CHANGES IN
FINANCIAL STATEMENTS EQUITY
 Present current and non-current items separately; or
Specific quantitative disclosure requirements:
 Present items in order of liquidity- if reliable and more  An entity shall present a single statement of profit and loss, with
Specific
Financialquantitative disclosure
statements must be clearly requirements: profit or loss and other comprehensive income presented in two Information required to be presented:
relevant
identified and distinguished from sections. The sections shall be presented together, with the profit or  Total comprehensive income for the period,
other information in the same Current assets Current liabilities loss section presented first followed directly by the other showing separately attributable to owners or
published document, and must the parent and non-controlling interest
 Expected to be realised  Expected to be settled in comprehensive income section
identify: in, or is intended for the entity’s normal  For each component of equity, the effects of
 Name of the reporting entity sale or consumption in operating cycle  Entities shall present an analysis of expense recognised in profit or retrospective application / restatement
 Whether the financial statements the entity’s normal  Held primarily for trading loss using a classification based on the nature of expense method recognised in accordance with IND AS 8
cover the individual entity or a operating cycle  Due to be settled within Accounting Policies, Changes in Accounting
group of entities  Held primarily for 12 months Information required to be presented in the: Estimates and Errors
 The date of financial statements trading  For each component in equity a reconciliation
 The entity does not have - Statement of profit and loss is defined in IND AS 1.82A - 87
(or the period covered)  Expected to be realised an unconditional right to between the carrying amount at the
- Profit or loss as defined in IND AS 1.88 and 89 beginning and end of the period, separately
 The presentation currency within 12 months defer settlement of the
 The level of rounding used
- Other comprehensive income in INDAS 1.82A and 90-96. disclosing each change.
 Cash or cash liability for at least 12 - Further information required to be presented on the face or in
equivalents. months.  Amount of dividends recognised as
the notes to the Statement of Profit and loss is detailed in IND distributions to owners during the period (can
All other assets are AS 1.97
NOTES TO THE FINANCIAL required to be classified All other liabilities are alternatively be disclosed in the notes.
as non-current. required to be classified as  Analysis of each item of OCI (alternatively to
STATEMENTS non-current.  Line items within other comprehensive income are required to be be disclosed in the notes).
categorised into two categories:
 Statement of compliance with IND - Those that could subsequently be reclassified to profit or loss
ASs.  Information required to be presented on the face of the - Those that cannot be re-classified to profit or loss.
balance sheet is detailed in IND AS 1.54
 Significant accounting policies,
estimates, assumptions, and  Further information required to be presented on the face
judgements must be disclosed or in the notes is detailed in IND AS 1.79 – 80.
 Additional information useful to THIRD BALANCE SHEET
users understanding / decision REPORTING PERIOD
making to be presented
 Information that enables users to  Accounts presented at least annually An entity shall present a third balance sheet as at the beginning of the
evaluate the entity’s objectives, preceding period in addition to the minimum comparative financial
 If longer or shorter, entity must disclose that fact.
policies and processes for statements required in paragraph 38A if:
managing capital  it applies an accounting policy retrospectively, makes a
STATEMENT OF CASH FLOWS retrospective restatement of items in its financial statements or
reclassifies items in its financial statements; and
 the retrospective application, retrospective restatement or the
 Provides users of financial statements with cash flow
reclassification has a material effect on the information in the
information – refer IND AS 7 Statement of Cash Flows.
balance sheet at the beginning of the preceding period.

, IND AS 2 Inventories
DEFINITION SCOPE

Inventories are assets Excludes Does not apply to measurement of inventories held by
 Held for sale in ordinary course of business  Construction contracts (IND AS 115 Revenue from contract  Producers of agricultural and forest products measured at NRV
 In the process of production for such sale with customers)  Minerals and mineral products measured at NRV
 In the form of materials or supplies to be consumed in the production process or in the  Financial instruments (IND AS 32 Financial Instruments:  Commodity brokers who measure inventory at fair value less
rendering of services. Presentation & IND AS 109 Financial Instruments: costs to sell.
Recognition and measurement)
 Biological assets (IND AS 41 Agriculture).


INVENTORIES ARE MEASURED AT THE LOWER OF COST AND NET REALISABLE VALUE (NRV)
(This is an implicit impairment test, thus inventories are excluded from the scope of IND AS 36 Impairment of Assets)

Specific quantitative disclosure requirements: COST NET REALISABLE VALUE


Includes Excludes NRV is the estimated selling price in the ordinary course of business, less the estimated costs
 Costs of purchase, including non-recoverable taxes,  Abnormal waste of completion and the estimated costs to make the sale.
transport and handling  Storage costs (unless necessary for the production
 Net of trade volume rebates process)
 Costs of conversion considering Fixed and Variable  Admin overheads not related to production
Overheads  Selling costs
 Other costs to bring inventory into its present condition  Interest cost (where settlement is deferred)
and location. - IND AS 23 Borrowing Costs identifies rare
circumstances where borrowing costs can be included.



Cost Formulas Measurement Techniques: The Standard requires an entity to use the same cost formula for all the inventories having a similar nature and use to the
 For non-interchangeable items: organisation. For inventories with a different nature of use, different cost formulas may be used
- Specific identification.
Standard cost method
 Takes into account normal levels of materials and supplies, labour, efficiency and capacity utilisation. They are regularly reviewed and, if necessary, revised in
 For interchangeable items, either:
the light of current conditions.
- FIFO
- Weighted average cost. Retail method
 Often used in the retail industry for measuring inventories of large numbers of rapidly changing items with similar margins for which it is impracticable to use
 Use of LIFO is prohibited. other costing methods. The cost of the inventory is determined by reducing the sales value of the inventory by the appropriate percentage gross margin.

, IND AS 7 Statement of Cash Flows
COMPONENTS OF CASH FLOW


Operating activities Investing activities Financing activities
Principal revenue-producing activities of the entity and other Activities that relate to the acquisition and disposal of long-term assets and other Activities that results in changes to contributed equity and
activities that are not investing or financing activities investments that are not included in cash equivalents. Only expenditure that results borrowings of an entity.
in recognition of an asset in the balance sheet are eligible for classification as
Investing activities.




REPORTING CASH FLOWS FROM OPERATING ACTIVITIES DEFINITIONS
Cash flows from operating activities can be reported using the direct or indirect method. Cash : comprises of cash on hand and demand deposits (not necessarily include demand deposits with banks)
Specific quantitative disclosure requirem
Cash & Cash Equivalents:

DIRECT METHOD INDIRECT METHOD  Short term (where the original maturity is 3 months or less)
 Highly liquid investments
Major classes of gross cash receipts and The net cash flow from operating activities is determined by  Readily convertible to known amounts of cash
gross payments are disclosed. adjusting profit or loss for the effects of:  Subject to insignificant risk of changes in value.
Preferred method of presentation  Changes during the period in inventories and operating
Eg. receivables and payables. Held for meeting short term cash commitments and not for Investment or other purposes.
 Cash received from sale of goods  Non-cash items (e.g. depreciation, provisions, deferred
 Cash paid to suppliers for goods / taxes, unrealised foreign currency gains and losses etc.)
services  Other items of income / expense associated with investing
or financing cash flows. (e.g. Interest / Dividend paid)
OTHER CONSIDERATIONS
 Cash paid to employees

 Cash flows must be reported on “gross” basis. Presentation on Net basis is permitted only in very limited
cases like cash receipts / payments made on behalf of customers (eg. Rent collected on behalf of and paid
CLASSIFICATIONS over to owners of property), or where cash receipts / payments are for items in which turnover is quick,
amounts are large and maturities are short (eg. Purchase or sale of investments).
 Cash flows from transactions in foreign currency shall be recorded in entities Functional currency by applying
 Bank Overdrafts which are integral part of an entities cash management are included in as a component of to the foreign currency, exchange rate between the functional currency and foreign currency at the date of
cash & cash equivalent and not as a part of financing activity.
cash flow.
 A single transaction may include cash flows that are classified differently. For eg. in case if a Fixed Asset is
 Presentation of items as Extraordinary is not permitted under IND-AS.
acquired on deferral payment basis, then the instalment payment in respect of such fixed asset should be
 Where the equity method is used for accounting of Investments in Joint Ventures and Associates or cost
split and interest element on such fixed asset should be classified as financing activity and repayment of loan
method for investments in subsidiaries, the statement of cash flows should only reflect cash flows between
amount to be classified as investing activity.
the entity and the investee.
 In case an asset is acquired / manufactured for the purpose of being held for rentals to others, then in such a
 Where a jointly controlled entity is proportionately consolidated, the entity should, in consolidated statement
case, payments to acquire / manufacture such asset, receipts from such rents and subsequent sales proceeds
of cash flows, include only its proportionate share of the cash flows in the jointly controlled entity.
from disposal of such assets are disclosed as cash flows from operating activities.
 Non-cash investing and financing transactions are not to be disclosed in the statement of cash flows though
 Interest & Dividend:
information relevant may be provided elsewhere in the Financial Statements.
For Financial institutions: Interest Paid & Interest & Dividend received are to be classified as Operating
Activities. Dividend paid is to be classified as financing activity.
For other entities: Interest & dividend received are to be classified as investing activity, interest and
dividend paid are required to be classified as Financing activity.
 Total interest paid during a period is to be disclosed in the statement of cash flows whether it has been
recognised as an expense in profit or loss or capitalised in accordance with IND AS 23 Borrowing Costs.
 Cash flows from Taxes on Income shall be classified as cash flows from operating activities unless they can
specifically be identified with Financing / Investment activities.
 Cash flows arising from obtaining or losing control of subsidiaries or other businesses shall be classified as
investing activities.
 Cash flows arising from changes in ownership interests in a subsidiary without loss of control should be
classified as cash flows from financing activities in consolidated cash flow statement as they are accounted
for as Equity transactions.

, IND AS 8 Accounting Policies, Changes in
Accounting Estimates and Errors
ACCOUNTING POLICIES CHANGES IN ACCOUNTING ESTIMATES ERRORS

Definition Definition Definition
Accounting policies are the specific principles, bases, conventions, rules and practices applied by an entity in A change in an accounting estimate is an adjustment Prior period errors are omissions from and
preparing and presenting financial statements of the carrying amount of an asset or liability, or misstatements in, an entity’s financial statements for
related expense, resulting from reassessing the one or more prior periods arising from failure to
expected future benefits and obligations associated use/misuse of reliable information that:
with the asset or liability  Was available when the financial statements for that
period were issued
Selection and application of accounting policies: Only change a policy if:  Could have been reasonably expected to be taken
 If a standard deals with a transaction, use that  Standard requires it, or into account in those financial statements.
standard  Change will provide more relevant and Principle
Recognise the change prospectively in profit or loss Errors include:
 If no standard or interpretation deals with a reliable information
in:  Mathematical mistakes
transaction, judgment should be applied. The
following sources should be referred to, to make  Period of change, if it only affects that period; or  Mistakes in applying accounting policies
the judgement:  Period of change and future periods (if applicable)  Oversights and misinterpretation of facts
Specific quantitative disclosure requirements:
- Requirements and guidance in other standards Principle  Fraud
dealing with similar issues If change is due to new standard, apply
- Definitions, recognition criteriarequirements:
and transitional provisions.
Specific quantitative disclosure If no transitional provisions, apply
measurement concepts in the framework Principle
retrospectively Disclosure
- May use other GAAP that use a similar  Correct all errors retrospectively
 Nature and amount of change that has an effect in
conceptual framework and/or may consult
the current period (or expected to have in future)  Restate the comparative amounts for prior periods in
other industry practice / accounting literature
 Fact that the effect of future periods is not which error occurred or if the error occurred before
that is not in conflict with standards If impractical to determine period-specific disclosed because of impracticality that date – restate opening balance of assets,
effects or cumulative effects of the error, then  Subsequent periods need not repeat these liabilities and equity for earliest period presented
retrospectively apply to the earliest period disclosures
that is practicable

If impractical to determine period-specific effects of
the error (or cumulative effects of the error), restate
Disclosure opening balances (restate comparative information) for
 The title of the standard that caused the earliest period practicable
change
 Nature of the change in policy
 Description of the transitional provisions
Disclosure
 For the current period and each prior period
 Nature of the prior period error
presented, the amount of the adjustment
to:  For each prior period presented, if practicable,
Consistency of accounting policies disclose the correction to:
Policies should be consistent for similar transactions, - Each line item affected
- Earnings per share. - Each line item affected
events or conditions - Earnings per share (EPS)
 Amount of the adjustment relating to prior
periods not presented  Amount of the correction at the beginning of earliest
period presented
 If retrospective application is
impracticable, explain and describe how the  If retrospective application is impracticable, explain
change in policy was applied and describe how the error was corrected
 Subsequent periods need not repeat these  Subsequent periods need not to repeat these
disclosures disclosures
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