The Ministry of Corporate Affairs (MCA) notified the Companies (Indian Accounting Standards) Rules, 2015 which provided a road map for implementation of the Indian Accounting Standards (Ind AS) by companies in India (corporate road map dated 16 February 2015).
This road map required Ind AS to be applied in a phased manner i.e. from the financial year commencing 1 April 2016 onwards for companies in phase I and from the financial year commencing 1 April 2017 onwards for companies in phase II. The SEBI (Issue of Capital and Disclosure Requirements (ICDR)) Regulations, 2009 require issuer companies to disclose financial information for each of the five financial years immediately preceding the filing of their offer document, while following uniform accounting policies for each of the financial years. Therefore, there was uncertainty on the accounting framework to be applied by companies that transitioned to Ind AS, when disclosing their historical financial information.
On 31 March 2016, the Securities and Exchange Board of India (SEBI) issued a circular (reference no. SEBI/HO/CFD/DIL/CIR/P/2016/47) clarifying the applicability of Ind AS to the financial information disclosed by issuer companies in their offer document.
This circular specifies the accounting framework to be applied while disclosing the financial information for each of the five financial years immediately preceding the filing of the offer document, based on the period in which it is filed.
This issue of IFRS Note provides an overview of the recent SEBI circular.
To access the text of SEBI circular, please click here.
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