The difference in the fundamental accounting methodology applicable to companies is likely to pose various challenges from a transfer pricing perspective, which have been discussed in the report.
The Ministry of Corporate Affairs (MCA), through its notification dated 16 February 2015, issued the Indian Accounting Standards (Ind AS) and recommended its application in a phased manner from 1 April 2016.
The onset of Ind AS has an impact on various areas, one of which is Transfer Pricing. This is because a company transitioning from the existing Indian Generally Accepted Accounting Principles (AS) to Ind AS would experience a change in various performance measures impacting the determination of arm’s length price for a Company following AS vis-à-vis a Company following Ind AS.
The difference in the fundamental accounting methodology applicable to companies is likely to pose various challenges from a transfer pricing perspective. This report outlines the various impact areas.
Some of the issues covered in the report are as follows:
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