First Ind AS financial statements as per Ind AS 101

First Ind AS Reporting Phase 1


First Ind AS financial statements are the first and only financial statements in which the entity adopts Ind ASs as per the Ind ASs notified in the Companies Act 2013 and makes an explicit and unreserved statement in those financial statements of compliance with Ind ASs.
It should be noted that the entire set of standards notified by the Ministry of Corporate Affairs should be complied with by the entity without any exception for any standard.

Opening Ind AS balance sheet:

An entity should prepare opening Ind AS balance sheet at the date of transition to Ind AS. This becomes the starting point for its accounting as per the Ind ASs.

Roadmap – Phase I

Phase I
  1. 1st April 2015 or thereafter: Voluntary Basis for all companies
  2. 1st April 2016: Mandatory Basis
  • Companies listed on Stock Exchange having net worth equal to or more than Rs.500 Crore
  • Unlisted Companies having net worth equal to more than Rs.500 Crore
  • Parent, Subsidiary, Associate and Joint Venture of above

First Ind AS reporting



Roadmap – Phase II

Phase II 1st April 2017 (Mandatory Basis)

1st April 2017 (Mandatory Basis)

  • Parent, Subsidiary, Associate and JV of above
  • Unlisted Companies having net worth equal to or more than Rs.250 Crore up to Rs.500 Crore
  • All Listed Companies not covered in Phase I
  • Other companies will continue to follow existing ASRoadmap for banks, NBFCs and insurance companies still to be decided
  • Banks, Insurance Companies, MBFC’s, RRB’s not yet covered in Phase I and Phase II. Roadmap is notified subsequently

Requirements of an entity applying Ind AS for the first time

  • The end of entity A’s first Ind AS reporting period is 31 March 2017 (For companies covered under Phase 1).
  • Entity A decides to present comparative information in those financial statements for one year only.
  • Its date of transition to Ind ASs is the beginning of business on 1 April 2015 (or, equivalently, close of business on 31 March 2015).
  • Entity A presented financial statements in accordance with its AS (previous GAAP) annually to 31 March each March 2016.year up to, and including, 31

Entity A is required to apply the Ind ASs effective for periods ending on 31 March 2017 in preparing & presenting:
1. Its opening Ind AS balance sheet at 1 April 2015.
2. Balance sheet for 31 March 2017 (comparative for YE 31 March 2016).
3. Statement of profit and loss.
4. Statement of changes in equity.
5. Statement of cash flows for the year to 31 March 2017 (comparative for YE 31 March 2016).
6. Disclosures (including comparative information for YE 31 March 2016).

First Ind AS financial statements

An entity’s first Ind AS financial statements shall include at least
1. Three Balance Sheets
2. Two Statements of profit and loss
3. Two Statements of cash flows and
4. Two Statements of changes in equity and
5. Related notes
6. Includes comparative information for all statements presented

Non Ind AS info and historical summaries

  • Historical summaries are sometimes presented for prior periods before the first period for which they present full comparative information in accordance with Ind ASs.
  • Such summaries need not comply with the recognition and measurement requirements of Ind ASs.

Non-Ind AS comparative information

  • Some entities present comparative information in accordance with previous GAAP as well as the comparative information required by Ind AS 1.
  • In any financial statements containing historical summaries or comparative info as per previous GAAP, an entity shall:
  1. label the previous GAAP information prominently as not being prepared as per Ind ASs and
  2. disclose the nature of the main adjustments that would make it comply with Ind ASs.
  • An entity need not quantify those adjustments.


Explanation & reconciliations

  • An entity shall explain how the transition from previous GAAP to Ind ASs affected its reported Balance sheet, financial performance and cash flows.
  • An entity’s first Ind AS financial statements shall include:

a) reconciliations of its equity as per previous GAAP to its equity as per Ind ASs for both of the following dates:
i. the date of transition to Ind ASs.
ii. the end of the latest period presented in the entity’s most recent annual financial statements in accordance with previous GAAP.


  • A reconciliation to its total comprehensive income as per Ind ASs for the latest period in the entity’s most recent annual financial statements.
  • The starting point for that reconciliation shall be total comprehensive income as per previous GAAP for the same period or, if an entity did not report such a total, profit or loss under previous GAAP.
  • The reconciliations shall give sufficient detail about material adjustments to the Balance Sheet and Statement of profit and loss.
  • If an entity presented a Statement of cash flows under its previous GAAP, it shall also explain the material adjustments to the Statement of cash flows.
  • If an entity becomes aware of errors made under previous GAAP, it shall distinguish the correction of those errors from changes in accounting policies.

Overview of Ind AS 101 – Part 1

Ind AS 101 - Overview



When an entity following accounting standards (AS) as per iGAAP gets transitioned into Ind AS, there would be some challenges faced by the entity. The initial issue is to have a proper starting point for preparation of the accounts as per Ind AS. The entity that wants to adopt Ind AS, should prepare an opening balance sheet that is consistent with Ind ASs.


The objective of Ind AS 101 is to ensure that the first Ind AS financial statements and interim financial reports contain high quality information and is transparent for the users and comparable over all the periods that are presented.
The standard also provides guidance to prepare the opening balance sheet so as to get a suitable starting point for accounting as per Indian Accounting Standards (Ind ASs). In all of these, the objective is that the high quality information should be generated at a cost that does not exceed the benefits.

Overview of Ind AS 101

  • IFRS 1 defines previous GAAP as the basis of accounting that a first-time adopter used immediately before adopting IFRS.
  • However, Ind AS 101 defines previous GAAP as the basis of accounting that a first-time adopter used for its reporting requirement in India immediately before adopting Ind AS.
  • The change makes it mandatory for Indian entities to consider the financial statements prepared in accordance with existing notified Indian accounting standards as was applicable to them as previous GAAP when it transitions to Ind ASs.


Ind AS 101 applies to entities during its first Ind AS financial statements and also during each interim financial report under Ind AS 101. 

Scope exception:

  • Ind AS 101 is applicable for the first time adoption of Ind AS only and does not apply to changes in accounting policies made by an entity that already applies Ind AS.
  • Ind AS 101 is different from transition adjustment that is provided in each standard. When a new accounting standard is introduced, the standard provides as to how the issues relating to transitioning the standards from existing GAAP to
  • Ind AS is mentioned in the respective standards. The transition adjustments will not be applicable to entities in India, as the entire set of 39 accounting standards are applicable with effect from the date on which it is set to be mandatorily applicable by the Ministry of Corporate Affairs.
  • When an Ind AS is applicable, ipso facto it is applicable with effect from the date of inception of the entity and not from the date on which the standard becomes mandatorily applicable. In order to avoid the hardship caused to the entities
  • while applying the same on a retrospective basis, every accounting standard contains a section known as ‘transition adjustments’ which specifies the way in which the entity can avail certain exceptions and exemptions from the rigors of implementing the standard on a retrospective basis.

Training on Ind AS including financial instruments (Ind AS 109) specifically for Banks

Training on financial instruments

Training on financial instruments and accounting standards for financial instruments are important for all officers of the bank. As an endeavour to enable the banks in India to adopt the complex Indian Accounting Standards, especially accounting standards for financial instruments, we are happy to announce training program for the officers of the banks. The training is done as a workshop model with extensive hands on problems and solutions from real life scenarios. The interactive training program assumes no prior knowledge of accounting for the participants. As the entire subject may be relatively new to several participants, training is imparted from the basics. Training on the new set of standards is imperative, as this will enable the officers to understand the impact of convergence to Ind AS. Also, it will enable them to evaluate Ind AS based financial statements of their customers which will effectively improve the process of credit appraisal before granting such facilities to them. Needless to say that this knowledge will be useful in their responsibility of monitoring the financial performance of their customers on a periodical basis.

Mandatory application of Ind AS

The Ministry of Corporate Affairs on 18th January 2016 announced the road map for implementation of Ind AS for scheduled commercial banks, insurance companies and non-banking financial companies (NBFCs). They are required to prepare the Ind AS based financial statements beginning from 1st April 2018 onwards. It should be noted that Banks are prohibited from adopting Ind AS voluntarily from an earlier date other than the dates mentioned above.
Subsequently, in a notification issued by the Reserve Bank of India (RBI) on 11th February, 2016, Banks are required to assess the impact of implementing Ind AS and are required to submit quarterly progress reports to their respective boards. Banks are also required to be in preparedness to submit proforma Ind AS financial statements to the RBI from the half year ended September 30, 2016.

As per the said notification, banks are also required to disclose in their annual reports the strategy for implementing Ind AS and the progress made in such implementation from the financial year 2016-17 until the implementation process is completed.

Pursuant to the above mentioned regulatory requirements, banks are mandatorily required to comply with Indian Accounting Standards (Ind AS) for financial statements beginning from 1st April 2018 onwards with comparatives for the periods ending 31st March 2018 or thereafter. Ind AS would be applicable to both standalone financial statements and consolidated financial statements.

Consequences of introducing Ind AS

The requirement by the RBI ensuring Ind AS compliance by banks, insurance companies and NBFCs casts enormous amounts of responsibility on their part. While the RBI recommendation is a welcome development in the backdrop of the global perspective, it requires significant learning at various levels for the officers, managers and other top officials of every bank, so that they understand the importance of the new regulatory requirements thrust on them.

Financial instruments as per Ind AS

Financial instruments which probably are the most complex topic in the entire literature of accounting standards are one of the key areas from the perspective of a bank. Most line items in a balance sheet of a bank are invariably financial instruments and hence it is extremely important to understand the requirements of financial instruments accounting standards. Banks may not have the recourse to any precedence as the financial instruments standard viz. IFRS 9 is applicable for accounting periods beginning on or after 1st January 2018 onwards globally wherever IFRS is adopted. It is pertinent to note that IFRS 9 underwent a major revision in several of the key conceptual areas viz., recognition, classification, derecognition and impairment amongst other concepts. Hedge accounting underwent a major overhaul which is now part of the new IFRS 9 that is adopted in India and converged as Ind AS 109.

Customised training

The training program would be customised based on the bank’s requirements.

Program Duration

The suggested program is for a three day course and a model session plan is given below which can be modified depending upon your specific requirements.


We have expert trainers who have hands on experience for more than 30 years in handling accounting standards. Depending upon the Bank’s requirement additional topics can be covered by respective trainers who have specialised knowledge on the subject selected.

Model session plan

Three day training course on Financial Instruments as per Ind AS requirements


Day 1

Session Topics covered
Session 1
10 am to 1 pm
Basic concepts of derivative instruments
  – What are derivatives and why we need them

  – Meaning of Forward, Futures and options
  – Pricing futures
  – Hedging, speculation & gambling
  – Option basics: ITM, ATM, OTM, Exercise, Lapse
Session 2
2 pm to 5 pm
Advanced concepts on derivative instruments
  – Greeks in options pricing
  – Black-Scholes model / Binomial model   
  – Put-call parity
Features of equity and equity derivatives
– Exercise with practical problems

Features of Interest Rate Derivatives
  – Interest Rate Swaps
  – Interest Rate CAPs / Floors
  – Interest Rate Collars / Reverse Collars
  – Cross Currency Swaps
Fixed Income Securities
FX Derivatives
Credit Default Swaps
Total Return Swaps


Day 2

Session Topics covered
Session 1
10 am to 1 pm
Accounting Standard Ind AS 32
  – Financial asset and financial liabilities
  – Compound instruments
  – Liability Vs. Equity
Session 2
2 pm to 5 pm
Accounting Standard  Ind AS 109
  – Recognition, measurement, subsequent measurement

  – Amortized cost
  – Classification, reclassification & derecognition
  – Impairment
  – Embedded derivatives
Ind AS 107 Disclosures
 – Live examples from published accounts

Report of the working group on implementation of Ind AS by Banks
 – Discussion of the report and practical implications thereof

Day 3

Session Topics covered
Session 1
10 am to 11.15 pm
Accounting for financial instruments
  – Interest rate derivatives
  – Fixed income securities
Effect of changes in foreign exchange rates Ind AS 21
  – Impact on financial instruments / hedge accounting
Session 2
11.30 am to 1 pm
Hedge Accounting
  – Fair Value Hedge

  – Cash Flow Hedge
Session 2
2 pm to 5 pm
Hedge Accounting
  – Case studies on Hedge Accounting

Financial instruments nuances in First time adoption


Ind AS 21 – Effects of changes in Foreign Exchange rates – Treatment of exchange differences

Let us examine the treatment of exchange differences in the books of accounts with a practical example.

Let us analyse the treatment of foreign exchange differences arising on account of translating the foreign currency balances to the presentation currency in respect of monetary items.

The exchange differences arise either on settlement or on remeasurement at the reporting date.

In both these cases, the exchange differences are recognised in the profit and loss account.

Let us briefly understand the difference between the FX revaluation entry and the FX translation entry.

The FX revaluation is converting every transaction in foreign currency into functional currency at the exchange rate on the date of transaction.

This means that there will be an entry in functional currency for each and every transaction in foreign currency.

FX translation on the other hand is performed at the account level.

There will be one journal entry for each account at the valuation date or at the settlement date based on the exchange rate on the date of valuation or settlement, as the case may be.

Let us take an example of accounting for the exchange differences arising on account of purchase of equity shares designated in foreign currency.

Let us assume that the functional currency is INR.

Bought 100 shares at $59 per shareEntry in foreign currency

Date Particulars Debit (Rs.) Credit (Rs.)
5-Jan-X1 Investment (Equity Shares – FVTPL) A/c


  To Payable to Broker A/c 5900
(Being 100 shares of Zenith Inc purchased at $59)

 Revaluation of transaction above FX rate Rs. 63/- – FX Revaluation entry

Date Particulars Debit (Rs.) Credit (Rs.)
5-Jan-X1 Investment (Equity Shares – FVTPL) A/c


  To Payable to Broker A/c


(The entry for purchase of equity shares @ 63.00 being the exchange rate on traded date)

 Settlement of liabilitySettlement entry in foreign currency

Date Particulars Debit (Rs.) Credit (Rs.)
8-Jan-X1 Payable to broker  A/c


  To Bank A/c


(Being the settlement of liability towards purchase of equity shares on settlement date)

 Revaluation of above transaction to broker FX rate Rs. 63.22 – FX Revaluation entry

Date Particulars Debit (Rs.) Credit (Rs.)
8-Jan-X1 Payable to broker  A/c


  To Bank A/c


(Being revaluation of the amount paid to the broker at the exchange rate of 62.83, which is the exchange rate on the date of settlement)

Recognition of gain/loss on settlementFX translation entry

Date Particulars Debit (Rs.) Credit (Rs.)
8-Jan-X1 Realised currency loss A/c


  To payable to broker A/c


(Being the realised currency loss adjusted with the broker account representing the fluctuation in the exchange rate between the trade date and the settlement date as shown in the following table)


Currency gains/loss on settlement date: 08-Jan-X1 INR
a) Purchase price as of 05-Jan-X1


b) Settlement amount in INR terms on 8-Jan-X1


Ind AS 21 – Effects of changes in Foreign Exchange rates – Translation to presentation currency

Let us see how the financial statements are translated to presentation currency

Financial statements should be translated to presentation currency if the currency is different from the functional currency.

The assets and liabilities are translated based on the closing rate at which the balance sheet is prepared.

Income and expenses are translated at the exchange rate at the respective transaction dates.

Sometimes, this could also be based on the average rate for a period where the exchange rates do not fluctuate significantly.

The exchange differences arising on account of translation of the financial statements to the presentation currency are recognised in other comprehensive income.

Note that the exchange differences on monetary as well as non-monetary items are all recognised in other comprehensive income.

The exchange difference should not be recognised in profit and loss account.

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