COMPANY LAW UPDATE – NEW ACCOUNTING STANDARDS RULES NOTIFIED – Eshwars
Call Us +91 44 42048335

COMPANY LAW UPDATE – NEW ACCOUNTING STANDARDS RULES NOTIFIED

Authored by Adit N Bhuva

Brief background:

The companies are required to prepare their financial statements in conformity with the accounting standards notified by Ministry of Corporate Affairs. All the companies were required to follow Companies (Accounting Standards) Rules, 2006 (“AS 2006”).

Thereafter, Companies (Indian Accounting Standards), Rules, 2015 (“Ind AS”) were notified from 1st April 2015 and the Ind AS was made applicable for the accounting periods beginning on or after 1st April, 2016, to certain class of companies, in a phased manner and currently the following classes of Companies are required to follow Ind AS (“Ind AS Companies”):

1. All the listed Companies (equity or debt securities) being listed on any stock exchange in India or outside India.

2. All the Companies who are in the process of being listed on any stock exchange in India or outside India

3. All the unlisted companies having net worth of rupees two hundred and fifty crore or more

4. All the holding, subsidiary, joint venture or associate companies of companies covered above.

Hence currently the following companies are required to follow AS 2006:

1. All Companies other than Ind AS Companies specified above

2. Companies whose securities are listed or are in the process of being listed on SME exchange as referred to in Chapter XB or on the Institutional Trading Platform without initial public offering in accordance with the provisions of Chapter XC of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

Replacement of AS 2006:

The Ministry of Corporate Affairs (‘MCA”), has on 23rd June 2021 notified the Companies (Accounting Standards) Rules, 2021 (“AS 2021”) in supersession of the Companies (Accounting Standards) Rules, 2006. This is applicable for the accounting period starting on or after 1st April 2021.

Hence the Companies to whom AS 2006 was applicable is required to follow AS 2021 from financial year April 2021-22 onwards.

Leave a comment

Your email address will not be published. Required fields are marked *

Eshwars | House Of Corporate & IPR Laws,
Chennai | Delhi | Bengaluru | Mumbai | New Jersey

Board: +91 - 44 - 42048335
+91 - 44 - 42048235