Clarification regarding applicability of Indian Accounting Standards to disclosures in offer documents under SEBI (ICDR) Regulations, 2009
Summary
This circular clarifies the applicability of Indian Accounting Standards (Ind AS) to financial disclosures in offer documents under SEBI ICDR Regulations. It mandates a phased transition from Indian GAAP to Ind AS based on the Ministry of Corporate Affairs roadmap, effective for filings on or after April 1, 2016. Issuers must ensure consistent accounting policies and provide specific transitional disclosures as per Ind AS 101.
Text
SEBI (ICDR) Regulations, 2009 require disclosure of financial information for each of the five financial years immediately preceding the filing of the offer document while following uniform accounting policies for each of the financial years.
For issuer companies to which Ind AS is applicable in Phase 1 of MCA Roadmap (beginning from FY 2016-17), disclosure shall follow the specified table transitioning from Indian GAAP to Ind AS between March 31, 2017 and April 1, 2020.
For issuer companies to which Ind AS is applicable in Phase 2 of MCA Roadmap (beginning from FY 2017-18), the above timelines w.r.t. filing of offer documents shall be followed with time lag of one year.
The issuer company may, at its discretion, choose to present all the five year periods using the Ind AS framework instead of accounting standards otherwise applicable for such period(s).
The issuer company shall clearly disclose the fact that the financial information has been disclosed in accordance with Ind AS while suitably explaining the difference between Ind AS and the previously applicable accounting standards, and the impact of transition to Ind AS.
All the financial information disclosed in the offer document for any particular year shall be in accordance with consistent accounting policies (Ind AS or applicable accounting standards).
All other requirements with respect to disclosure of financial information in the offer documents shall remain the same. Further, all the information disclosed in the offer document as per Ind AS shall be audited/reviewed in accordance with requirements of SEBI (ICDR) Regulations, 2009.
This circular is applicable for all the companies which are required to disclose the financial information in accordance with Ind AS as per MCA roadmap and whose offer document is filed with the Board on or after April 1, 2016.
Source: SecMarx — Clarification regarding applicability of Indian Accounting Standards to disclosures in offer documents under SEBI (ICDR) Regulations, 2009. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.