Six things to know before you compare the two frameworks
Converged, not identical
Ind AS is converged with IFRS, not identical to it. The Indian standards are built on the IFRS text but carry deliberate departures called carve-outs, added to fit Indian law, regulation and commercial practice.
Not interchangeable
A set of Ind AS financial statements cannot simply be relabelled as IFRS financial statements. Where a carve-out has been applied, the numbers themselves differ — not just the wording.
Applicability is not a choice
Applicability is driven by net worth and listing status, not by choice. The roadmap brought companies in at ₹500 crore and then ₹250 crore of net worth, with separate phase-ins for NBFCs.
Where reported profit moves
The differences that most often change reported profit sit in business combinations, first-time adoption and certain financial instrument classifications.
Presentation is prescriptive
Presentation is more prescriptive in India. Schedule III, Division II fixes the face of the financial statements, while IAS 1 leaves an entity considerably more latitude.
The next shift is visible
The next shift is already visible. Ind AS 118, India’s response to IFRS 18, is expected to apply from 1 April 2027 — which makes FY 2026-27 the comparative year companies are living through right now.
A finance director preparing for a first overseas fundraise asked us a reasonable question last year: the company reports under Ind AS, the investor wants IFRS, so can we just change the cover page? The answer is no, and the reason why is worth understanding before it costs a deal.
Ind AS was written from the IFRS text. Paragraph numbers line up, definitions match, and for most transactions the two frameworks produce the same answer. But India did not adopt IFRS wholesale. It converged with it, and converging meant writing in a set of deliberate departures. Those departures are small in number and large in consequence, and they are the reason a company cannot move between the two frameworks by editing a heading.
The RelationshipWhat Is the Actual Relationship Between IFRS and Ind AS?
IFRS is issued by the International Accounting Standards Board and used, in some form, across more than a hundred jurisdictions. Ind AS is the Indian family of standards notified by the Ministry of Corporate Affairs under the Companies Act, 2013, developed by the Institute of Chartered Accountants of India and based on the IFRS text.
Three points define the relationship — the numbering that maps one framework onto the other, the departures written in deliberately, and the fact that adoption only runs one way.
1. The numbering deliberately mirrors IFRS
Ind AS numbering deliberately mirrors IFRS. Ind AS 115 corresponds to IFRS 15 on revenue, Ind AS 116 to IFRS 16 on leases, Ind AS 109 to IFRS 9 on financial instruments. Standards derived from the older IAS series carry the IAS number prefixed by 1 — IAS 21 becomes Ind AS 21, IAS 1 becomes Ind AS 1.
2. Departures have names: carve-out and carve-in
Where India departs from the international text, the departure is called a carve-out. Where India adds a requirement IFRS does not impose, it is a carve-in.
3. Adoption is not reversible
A company that moves to Ind AS, whether because it crossed a threshold or because it chose to, cannot go back to the older Accounting Standards afterwards.
The short version: Ind AS is IFRS as adapted for Indian conditions. Close enough that the concepts transfer; different enough that the financial statements are not interchangeable.
Which Indian Companies Actually Have to Apply Ind AS?
Applicability follows the roadmap notified under the Companies (Indian Accounting Standards) Rules, and it turns on two things: whether the company is listed, and what its net worth is. Companies below the thresholds continue with the Accounting Standards notified separately.
Chart 1 — Net worth gates that pull a company into Ind AS
Source: Companies (Indian Accounting Standards) Rules and the notified roadmap. Holding, subsidiary, associate and joint venture entities of a covered company are drawn in with it. Banks and insurers follow separate regulator-led timelines. Confirm your own position — thresholds and phase dates have been amended more than once.
Two consequences catch companies out. First, the group net is wide: once a parent is covered, its subsidiaries, associates and joint ventures come with it, however small they are individually. Second, crossing the threshold in a single year is enough. A company that grows past the gate does not get to wait and see whether the growth holds.
The Real DifferencesWhere Do Ind AS and IFRS Actually Differ?
This is the part most comparisons handle badly, usually by listing every standard and noting that they are broadly the same. The useful question is narrower: where does applying the Indian standard give a different number, or a different place on the face of the accounts, from applying the international one?
Table 1 — The carve-outs that change the answer
| Area | Under IFRS | Under Ind AS |
|---|---|---|
| Bargain purchase in a business combination | Excess of fair value of net assets over consideration is taken to profit or loss as a gain | The acquirer must first satisfy itself that a genuine bargain occurred; where the reasons are clear the gain goes to capital reserve through other comprehensive income rather than boosting reported profit |
| Business combinations under common control | Excluded from the scope of IFRS 3, so entities choose a policy | Appendix C of Ind AS 103 prescribes the pooling of interests method, removing the choice |
| First-time adoption — deemed cost | IFRS 1 requires fair value, or a previous GAAP revaluation, as deemed cost | Ind AS 101 additionally permits carrying values under previous Indian GAAP to be used as deemed cost, which spared adopters a full revaluation exercise |
| Long-term foreign currency monetary items | No option to defer; exchange differences go to profit or loss | A first-time adopter could continue a previous policy of capitalising or amortising exchange differences on long-term items recognised before transition |
| Foreign currency convertible bonds | The conversion option is equity only if the exercise price is fixed in the functional currency | The option can be treated as equity where the exercise price is fixed in any currency, which matters for Indian issuers raising in dollars |
| Lease rental escalations | Escalating lease payments are generally straight-lined over the term | Straight-lining is not required where the increases compensate for expected general inflation |
| Presentation format | IAS 1 sets principles and minimum line items, leaving the format to the entity | Schedule III, Division II prescribes the face of the balance sheet and statement of profit and loss |
| Single or two statements | An entity may present one combined statement or two separate statements | A single statement of profit and loss including other comprehensive income is required |
| Government grants — non-monetary | A non-monetary grant may be recognised at fair value or at a nominal amount | The nominal amount option is not available |
Source: notified Ind AS as compared with the corresponding IFRS and IAS. Carve-outs have been revisited by the ICAI more than once and some have narrowed over time — confirm the position applicable to your reporting period.
Two of these interact with topics we have covered separately. The foreign currency carve-out sits on top of the ordinary machinery of Ind AS 21 and foreign currency transactions, and the bargain purchase treatment is one of the clearest examples of why other comprehensive income is worth understanding properly rather than treating as a residual bucket.
Why They ExistWhy Do the Carve-Outs Exist at All?
They are not accidents of drafting. Each one traces to a specific Indian condition.
Company law comes first
Where the Companies Act or a schedule made under it prescribes something, an accounting standard notified under that same Act cannot contradict it. Schedule III is the clearest instance.
Transition had to be affordable
Requiring every first-time adopter to fair value its entire fixed asset base would have imposed a cost with limited benefit for companies whose assets were long held and well documented.
Indian capital structures differ
Foreign currency convertible bonds are a common Indian instrument, and the international classification rule would have pushed a widely used structure into liability treatment.
Volatility in reported profit was a policy concern
Routing a bargain purchase gain through capital reserve rather than profit avoids a windfall that reflects deal pricing rather than performance.
Regulators supervise sectors separately
Banks, insurers and NBFCs answer to their own regulators, which is why their adoption timelines were set apart from the general roadmap.
The Differences You Will Notice First: Wording and Layout
Before any measurement difference appears, the two sets of statements simply look different. Anyone reading an Indian set for the first time after a career on IFRS notices this within a page.
Table 2 — Presentation and terminology, side by side
| Element | IFRS convention | Ind AS convention |
|---|---|---|
| Statement of position | Statement of Financial Position | Balance Sheet |
| Performance statement | Statement of Profit or Loss and Other Comprehensive Income | Statement of Profit and Loss |
| Format of the face | Principles-based, entity decides the layout | Prescribed by Schedule III, Division II |
| Number of statements | One combined statement or two separate ones | One combined statement |
| Ordering of the balance sheet | Entity chooses, liquidity or current/non-current | Prescribed order under Schedule III |
| Rounding and units | Entity policy, disclosed | Governed by Schedule III based on turnover |
| Comparative disclosures | IAS 1 minimum, extended by regulators | Schedule III requirements plus specified ratio disclosures |
Source: IAS 1 and Ind AS 1 read with Schedule III, Division II to the Companies Act, 2013.
Why this matters in practice: a reader who assumes the two labels mean different things will look for a difference that is not there. The Balance Sheet and the Statement of Financial Position are the same statement. The genuine differences are in the carve-outs, not the vocabulary.
What Is Changing Next, and Why FY 2026-27 Matters
The international framework has moved. IFRS 18, the new standard on presentation and disclosure, replaces IAS 1 and takes effect internationally for periods beginning on or after 1 January 2027. India’s counterpart, Ind AS 118, has been through exposure draft and regulatory deliberation, with implementation expected from 1 April 2027.
What the new standard does, in outline:
- Income and expenses must be classified into defined categories — operating, investing and financing — with separate presentation for income taxes and discontinued operations.
- Operating profit and profit before financing and tax become mandatory, defined subtotals, which sharply narrows the discretion companies currently have in presenting performance.
- Management-defined performance measures must be identified, disclosed and reconciled, bringing adjusted-EBITDA style metrics inside the audited financial statements.
- The classification logic depends on an assessment of the entity’s main business activities, so two companies in different sectors may classify the same item differently.
- Because comparatives are required, the year being reported now becomes the comparative period on transition.
The practical deadline is earlier than it looks. If Ind AS 118 applies from 1 April 2027, FY 2026-27 — the year currently under way — is the comparative period that will have to be restated and presented on the new basis. Chart of accounts design, classification logic and system mapping are decisions best taken during the comparative year rather than after it has closed.
When Does an Indian Business Need IFRS Rather Than Ind AS?
Ind AS satisfies Indian statutory reporting. IFRS becomes relevant when someone outside India needs to read your numbers on their own terms.
- An overseas parent consolidating an Indian subsidiary will usually require an IFRS reporting pack alongside the Indian statutory accounts.
- A listing or debt raise on an overseas exchange will be governed by that market’s accepted framework.
- Foreign private equity and strategic investors running diligence frequently ask for IFRS-basis figures so the target is comparable with their other holdings.
- An Indian group with overseas subsidiaries may find it simpler to run one group reporting language and reconcile to Ind AS for statutory purposes.
- In each case the practical output is a reconciliation rather than a second set of books — which is what our conversion of financial statements to Ind AS and IFRS work involves.
Four Misconceptions Worth Correcting
Converged, not identical. The carve-outs are few but they change reported figures, which is exactly what a foreign investor is reading.
Group membership pulls entities in regardless of size, and a single year above the gate is enough to trigger adoption.
It reaches loan covenants, ESOP valuations, managerial remuneration limits and deferred tax. Ratios that were comfortable under the old basis do not always survive the change.
The comparative period is running now. Deciding late means restating a year you have already closed.
How N D Savla & Associates Supports the Transition
We work with Indian companies on both frameworks — statutory reporting under Ind AS, and reporting packs prepared for overseas parents and investors under IFRS. The engagements that go well tend to start early and treat the change as a systems question as much as an accounting one.
- Our Ind AS implementation work covers the diagnostic, opening balance sheet, transition adjustments and the first set of compliant financial statements.
- Our IFRS implementation services handle group reporting requirements where an overseas parent or investor sets the framework.
- Where a transaction is driving the timeline, IPO readiness assessment and diligence support run alongside the reporting work rather than after it.
- The reporting change is audited in the ordinary course, which our audit and assurance team plans for in the same cycle.
The notified text of every Indian Accounting Standard, and the rules framed under the Companies Act, sit on the Ministry of Corporate Affairs website. Amendments arrive regularly, so check the version in force for your reporting period rather than relying on any secondary summary — this article included.
Frequently Asked QuestionsIFRS vs Ind AS — Common Questions
Is Ind AS the same as IFRS?
No. Ind AS is converged with IFRS and built from the same text, but it contains deliberate departures known as carve-outs. For most everyday transactions the two produce identical results. Where a carve-out applies — bargain purchases, common control combinations, certain convertible instruments, first-time adoption choices — the reported numbers genuinely differ.
Which companies must follow Ind AS in India?
Applicability follows the notified roadmap and turns on listing status and net worth, with gates set at ₹500 crore and ₹250 crore. Holding companies, subsidiaries, associates and joint ventures of a covered entity are drawn in alongside it. Banks, insurers and NBFCs follow separate timelines set by their regulators.
Can a company move back from Ind AS to the older Accounting Standards?
No. Once a company applies Ind AS, whether because it crossed a threshold or adopted voluntarily, it must continue with Ind AS in later years. Falling below the net worth threshold afterwards does not restore the earlier framework.
Can Ind AS financial statements be presented to a foreign investor as IFRS statements?
Not without work. Where no carve-out has been applied the figures may well agree, but the statements cannot be described as IFRS-compliant without confirming that, and the presentation follows Schedule III rather than IAS 1. In practice a reconciliation or a separate IFRS reporting pack is prepared.
What is Ind AS 118 and when does it apply?
Ind AS 118 is India’s counterpart to IFRS 18, the new international standard on presentation and disclosure that replaces IAS 1. Implementation is expected from 1 April 2027. It introduces defined categories for income and expenses, mandatory subtotals including operating profit, and disclosure of management-defined performance measures. Because comparatives are required, FY 2026-27 is the year to prepare in.
Ind AS gives Indian companies a reporting language that the rest of the world can read, without pretending that Indian company law, capital structures and transition costs do not exist. The carve-outs are the price of that pragmatism, and they are few enough to learn. What matters is knowing which ones touch your business, and planning the next change — Ind AS 118 — while the comparative year is still open rather than after it has closed.
Reach N D Savla & Associates at +91 98218 32683, +91 98190 00511 or +91 91670 58000 to scope an Ind AS transition, an IFRS reporting pack or an Ind AS 118 readiness review — or visit ndsavlaa.com to explore the firm’s services.
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