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Ind AS IFRS Conversion Services Mumbai | N D Savla & Associates — CA Firm
Bookkeeping & Accounting

Conversion of Financial Statements to Ind AS / IFRS
Indian GAAP to Ind AS Migration & Ongoing Reporting

Expert Ind AS and IFRS conversion services in Mumbai — financial statement conversion from Indian GAAP to Ind AS or IFRS, restated comparatives, GAAP difference analysis, disclosure notes, ongoing Ind AS reporting. Mumbai CA firm.

Part of our practice: Ind AS Implementation IFRS Implementation Services Financial Reporting MIS Outsourced Accounting Mumbai

Overview

Key Differences Between Indian GAAP and Ind AS / IFRS

The conversion of financial statements from Indian GAAP (Generally Accepted Accounting Principles based on the older Accounting Standards issued by ICAI) to Indian Accounting Standards (Ind AS, which are substantially converged with IFRS) or to full IFRS is one of the most technically demanding assignments in financial reporting. It requires not just a deep knowledge of the differences between the old and new standards — which are extensive and affect virtually every line of the financial statements — but also the practical skill to apply those differences to the specific facts and transactions of the company being converted, prepare the opening balance sheet under the new standard, restate the comparative period financials, draft the extensive disclosure notes required by the new standards, and document the accounting policy choices and optional exemptions taken at the time of first-time adoption.

N D Savla & Associates provides Ind AS and IFRS conversion services to companies across Mumbai and India — whether mandated to adopt Ind AS by the Ministry of Corporate Affairs (MCA) threshold requirements, converting voluntarily because investors or lenders require Ind AS or IFRS financial statements, or preparing subsidiary financials in IFRS for group reporting purposes to a foreign parent or holding company. Our CA team has the technical knowledge of both the old Indian GAAP framework and the current Ind AS and IFRS standards required to manage the conversion professionally and accurately.

The Ind AS roadmap introduced by the MCA has already brought most large and medium-sized companies within the Ind AS reporting framework. Companies with net worth of Rs. 250 crore or more, listed companies, banks, insurance companies, and NBFCs with assets above specified thresholds have been mandated to prepare financial statements under Ind AS. Subsidiaries, associates, and joint ventures of companies that have adopted Ind AS are also required to prepare Ind AS financials for consolidation purposes, even if they would not be mandated independently. For companies within the consolidated group of a foreign parent preparing IFRS financial statements, subsidiary financials in IFRS (or a reconciliation from Ind AS to IFRS) are required for the group consolidation.

01

Revenue Recognition — Ind AS 115 vs AS 9

Revenue recognition is one of the areas of most significant difference between Indian GAAP and Ind AS. Under the old AS 9, revenue was recognised when risks and rewards of ownership transferred (for goods) or when services were rendered (for services) — a relatively straightforward principle. Under Ind AS 115 (Revenue from Contracts with Customers, aligned with IFRS 15), revenue is recognised under a five-step model: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; and (5) recognise revenue when (or as) the performance obligation is satisfied. For businesses with multiple-element arrangements, long-term contracts, variable consideration, significant financing components, or contract modification, the Ind AS 115 treatment can be very different from the AS 9 treatment. Construction companies, software developers, real estate developers, and subscription-based businesses typically experience the most significant revenue recognition differences on conversion.
02

Financial Instruments — Ind AS 109 vs AS 13/30/31

The treatment of financial instruments — investments, loans, borrowings, receivables, and derivatives — is substantially more complex under Ind AS 109 (Financial Instruments, aligned with IFRS 9) than under the old Indian GAAP standards. Under Ind AS 109, financial assets are classified based on the business model for managing them and the cash flow characteristics of the instrument into one of three categories: amortised cost, Fair Value through Other Comprehensive Income (FVOCI), or Fair Value through Profit or Loss (FVTPL). This replaces the simpler held-to-maturity, available-for-sale, and trading classification under old Indian GAAP. The impairment model under Ind AS 109 uses an Expected Credit Loss (ECL) approach — requiring companies to provision for expected credit losses on loans and receivables from day one (even before any actual default occurs), rather than the incurred loss model under old Indian GAAP. The ECL model can require significant provisions on loan portfolios that appear current, based on probability-weighted scenarios of future default. This is particularly impactful for banks, NBFCs, and companies with large intercompany loan portfolios.
03

Leases — Ind AS 116 vs AS 19

Ind AS 116 (Leases, aligned with IFRS 16) requires lessees to recognise a Right-of-Use (ROU) asset and a corresponding lease liability for virtually all leases with terms of more than 12 months — including operating leases that were previously recorded simply as rental expenses under old Indian GAAP. The ROU asset is depreciated over the lease term, and the lease liability is unwound using an effective interest rate, with separate recognition of interest expense and lease principal repayment. The impact on the financial statements is significant: the balance sheet inflates (because of the ROU asset and lease liability), EBITDA increases (because the rental expense is replaced by depreciation and interest — neither of which is below EBITDA), and the profit and loss pattern changes (interest is front-loaded on the lease liability). For companies with significant office, retail, factory, or warehouse leases — particularly those with multiple locations in Mumbai's expensive real estate market — the Ind AS 116 impact can be very material. N D Savla & Associates computes the Ind AS 116 ROU asset and lease liability for every lease of the company at the conversion date and prepares the ongoing lease accounting thereafter.
04

Employee Benefits — Ind AS 19 vs AS 15

Ind AS 19 (Employee Benefits, aligned with IAS 19) differs from AS 15 primarily in the treatment of the Projected Benefit Obligation (PBO) for defined benefit plans — such as gratuity. Under AS 15 (Revised 2005), actuarial gains and losses could be either recognised immediately in the P&L or deferred and amortised (corridor method). Under Ind AS 19, the corridor method is not permitted — all actuarial gains and losses must be recognised immediately in Other Comprehensive Income (OCI) and cannot be recycled to P&L. This changes the presentation of defined benefit plan costs: the service cost and net interest cost go to P&L, while the actuarial remeasurement goes to OCI. The conversion also requires restating the opening balance sheet to remove any unamortised actuarial gains and losses that were being deferred under AS 15.
05

Business Combinations — Ind AS 103 vs AS 14

Business combinations under Ind AS 103 (aligned with IFRS 3) must be accounted for using the acquisition method — there is no pooling of interests option. This means that in any business combination, the acquirer must measure the identifiable assets acquired and liabilities assumed at their fair values at the acquisition date, recognise any goodwill as the excess of consideration paid over the fair value of net assets, and identify and separately recognise intangible assets that meet the recognition criteria (customer relationships, brand names, technology, non-compete agreements) even if they were not previously recorded in the acquired company's books. Under old Indian GAAP, the purchase method also applied (AS 14), but the identification and measurement of intangible assets was less rigorous. The Ind AS 103 goodwill is not amortised — instead, it is subject to annual impairment testing under Ind AS 36. This can have a significant impact on companies that have made acquisitions and had been amortising goodwill under old Indian GAAP.
06

Property, Plant and Equipment and Revaluation — Ind AS 16

Ind AS 16 (Property, Plant and Equipment) allows two measurement models: the cost model (carry at historical cost less accumulated depreciation and impairment losses) and the revaluation model (carry at fair value less subsequent accumulated depreciation and impairment). Under old Indian GAAP, revaluation was also permitted but less systematically implemented. Ind AS 101 (First-time Adoption) provides the option to designate the fair value of items of PP&E at the transition date as their deemed cost — allowing companies to step up the cost base of their fixed assets to fair value at the time of conversion, without an ongoing commitment to the revaluation model thereafter. Many companies in Mumbai with significant property holdings have used this option on conversion to reflect the current fair value of their real estate in the balance sheet. N D Savla & Associates advises on the deemed cost election and coordinates with registered valuers to obtain the fair value assessments required.

Our Process

Our Ind AS / IFRS Conversion Process

Step 1: Diagnostic Analysis — Identifying GAAP Differences — We begin with a comprehensive diagnostic of the company's financial statements under Indian GAAP, identifying every area where Ind AS or IFRS treatment differs from the current accounting. We prepare a GAAP difference analysis that quantifies the estimated impact of each difference on the opening balance sheet, the comparative P&L, and the OCI — giving management a clear picture of the expected conversion impact before we begin the detailed work.

Step 2: Opening Balance Sheet Under Ind AS 101 / IFRS 1 — Ind AS 101 (First-time Adoption of Indian Accounting Standards) and IFRS 1 (First-time Adoption of International Financial Reporting Standards) provide the framework for preparing the opening balance sheet at the transition date. They specify mandatory exceptions and optional exemptions from full retrospective application — allowing companies to avoid restating certain transactions (like past business combinations or past hedging relationships) that would be impractical to restate. We evaluate all available exemptions, advise on which exemptions to take, and prepare the opening balance sheet with full supporting workings.

Step 3: Restated Comparative Financials — The year of first-time adoption requires presentation of at least one year of comparative financial statements restated under the new standard. We restate the comparative year's P&L and balance sheet to reflect Ind AS or IFRS treatment, prepare the reconciliation required by Ind AS 101 / IFRS 1 (showing the equity reconciliation from Indian GAAP to Ind AS / IFRS at the transition date and at the end of the comparative year), and document all adjustments.

Step 4: Disclosure Notes and Accounting Policy Documentation — Ind AS and IFRS financial statements require extensive disclosure notes covering accounting policies, key judgements and estimates, segment information, related party transactions, financial instrument disclosures (including the IFRS 7 risk disclosures), employee benefit obligations, lease commitments, and many others. We draft the complete set of disclosure notes in the format appropriate to the company, cross-referenced to the figures in the primary statements.

Step 5: Ongoing Ind AS / IFRS Reporting — After the conversion is complete, we provide ongoing support for Ind AS or IFRS financial statement preparation — preparing annual financial statements in the new framework, maintaining the accounting policy choices and elections made on first-time adoption, and advising on the treatment of new transactions under the applicable standards.

In Detail

Contact N D Savla & Associates for Ind AS / IFRS Conversion

N D Savla & Associates provides expert Ind AS and IFRS conversion services to companies in Mumbai and across India. Whether you are approaching your mandatory Ind AS adoption date, converting voluntarily for investor or lender requirements, or preparing group IFRS financials for a foreign parent, our CA team has the technical expertise to manage the conversion professionally. Contact us for a free consultation.

Related Services

Explore Our Wider Practice

These services connect directly with this engagement across the bookkeeping & accounting function:

Ind AS Implementation
IFRS Implementation Services
Financial Reporting MIS
Outsourced Accounting Mumbai
Statutory Audit Companies Act
Transfer Pricing Services

Frequently Asked Questions

Common Questions

Which companies are mandated to prepare Ind AS financial statements?

The MCA has notified Ind AS applicability in phases. Phase I (FY 2016-17): Companies with net worth Rs. 500 crore or more, and listed and their unlisted subsidiaries. Phase II (FY 2017-18): Companies with net worth Rs. 250 crore or more. Phase III (FY 2019-20): Listed companies with net worth less than Rs. 250 crore, and NBFCs with asset size Rs. 500 crore or more (and their subsidiaries/associates/joint ventures). Banks and insurance companies have separate roadmaps. A subsidiary or associate of a company required to prepare Ind AS financials must also prepare Ind AS subsidiary financials for consolidation purposes even if it would not independently meet the threshold. N D Savla & Associates advises on whether a specific company is within the Ind AS scope.

What is Ind AS 101 and why is it important?

Ind AS 101 (First-time Adoption of Indian Accounting Standards) is the standard that governs how a company prepares its first set of Ind AS financial statements. It requires the company to: (1) determine the transition date (the beginning of the earliest comparative period presented — typically the start of the comparative year); (2) prepare an opening Ind AS balance sheet at the transition date; (3) apply all Ind AS standards in force at the reporting date retrospectively to all periods presented, subject to the mandatory exceptions and optional exemptions in Ind AS 101; (4) present the reconciliations from Indian GAAP to Ind AS required by Ind AS 101. The optional exemptions in Ind AS 101 are business decisions that can have significant financial impact — they include the deemed cost exemption for PP&E and investment property, the exemption for past business combinations, the exemption for cumulative translation differences, and others. N D Savla & Associates advises on the optimal set of exemptions for each company.

What is the impact of Ind AS 116 on companies with large office leases in Mumbai?

For companies with significant office leases in Mumbai — where commercial rental rates are among the highest in India — Ind AS 116 can be highly material. Every office lease with a term of more than 12 months must be recognised as a Right-of-Use asset and a lease liability at the present value of future lease payments discounted at the incremental borrowing rate. A company with, say, 5,000 square feet of office space in Bandra Kurla Complex on a 5-year lease at Rs. 200 per square foot per month has a future lease commitment of approximately Rs. 12 crore. This Rs. 12 crore (approximately) would be recognised as a ROU asset and lease liability on adoption of Ind AS 116 — significantly increasing the size of the balance sheet and changing the expense pattern in the P&L.

How long does an Ind AS conversion project typically take?

For a company of moderate complexity (a mid-sized manufacturing or service company without complex financial instruments, derivatives, or multiple business combinations), the Ind AS conversion project from initiation to completion of the first set of Ind AS financial statements typically takes three to six months. Larger, more complex companies — particularly those with significant financial instruments portfolios, multiple business combinations, complex revenue arrangements, or listed status requiring early engagement with auditors — may take six to twelve months. N D Savla & Associates works to the client's timeline, coordinating with the statutory auditor to ensure that the conversion is completed in time for the required reporting deadlines.

Speak with N D Savla & Associates

Chartered Accountants, Mumbai & Pune. Talk to our team about Conversion of Financial Statements to Ind AS / IFRS — scope, timelines and how the engagement is structured for your business.

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