INDIAN ACCOUNTING STANDARD 101: FIRST-TIME ADOPTION OF IND AS

• Financial asset or intangible assets accounted for service concession arrangements: Change in accounting policy to be  accounted retrospectively except for amortization policy in tangible assets relating to toll roads adopted as per previous GAAP. If impracticable for an operator to apply the requirements of the Ind AS retrospectively at the date of transition to Ind AS, it shall recognize financial assets and intangible assets that existed at the date of transition to Ind AS using the previous carrying amounts.
• Designation of contracts to buy or sell a non-financial item: An Entity may designate at the date of transition to Ind AS, contract that already exist on that date as measured at fair value through profit or loss but they meet the requirements of Ind AS 109 at the date and the entity designate all similar contracts.
• Striping costs in the production of surface mine: A first time adopter may apply appendix to Ind AS 16 stripping costs in the production phase of a surface mine from the date of transition to Ind AS. As at the transition date to Ind AS, any previously recognized asset balance that resulted from stripping activity undertaken during the production phase shall be reclassified as a part of an existing asset to which the stripping activity related, to the extent that there remains an identifiable component of the core body with which the predecessor stripping asset can be associated.
• Non-current assets held for sale and discounted operations:
  A first time adopter can:
  Measure non current assets held for sale or discontinued operation at the lower carrying value and fair value less cost to sell at the date of transition to Ind AS  in accordance with Ind AS 105; and
  Recognize directly in retain earnings any difference between that amount and the carrying amount of those assets at the date of transition to Ind AS determined under the entity’s previous GAAP.
• Assets and liabilities of subsidiaries, associates and joint ventures:
  If a subsidiary becomes a first-time adopter later than its parent, the subsidiary shall measure its assets and liabilities at either:
  *The carrying amounts that would be included in the parent’s consolidated financial statements, based on the parent’s date of transition to Ind AS. or
  *The carrying amounts required by Ind AS 101, based on the subsidiary’s date of transition to Ind AS.
  If an entity becomes first time adopter later than its subsidiary, the entity shall measure the assets and liabilities at the subsidiary at the same carrying amounts as in the financial statements of the subsidiary, after adjusting for consolidation and equity accounting adjustments and for the effects of the business combination in which the entity acquired the subsidy.
• Revenue from Contract with Customers:
  Any of the following exemption may be used in applying Ind AS 115 retrospectively:
  *For completed contracts: Need not restate contracts that begin and end within the same annual reporting period;
  *For completed contracts that have variable consideration: Option to use the transaction price at the date the contract was completed rather than estimating variable consideration amounts in the comparative reporting periods;
  *For all reporting periods presented before the beginning of the first Ind AS reporting period, an entity need not disclose the amount of the transaction price allocated to the remaining performance obligations and an explanation of when the entity expects to recognize that amount as revenue.
• Joint arrangements:
  Transition from Proportionate Consolidation to Equity Method:
  *To measure initial investment at transition date at the aggregate of carrying amount of assets and liabilities that had previously proportionately consolidated including goodwill arising on acquisition.
  *To test the investment for impairment.
  *If aggregate of all previously recognized assets/liabilities results in negative asset and if having legal or constructive obligation than recognize corresponding liability otherwise adjust retained earnings.
  
  Transition from Equity Method to accounting for assets and liabilities:
  *To derecognize previous investment and recognize share of each asset and liability in respect of its interest in joint operation.
  *Difference between amount as per Ind AS and previously recognized;
  (a) If carrying amount of previous investment is lower:
  Offset against goodwill relating to investment and thereafter retained earning
  (b) If carrying amount of previous investment is higher: Adjust against retained earning.
  
  Transitional provisions in entity’s Separate FS:
  *To derecognise the investment and recognize assets and liabilities as per transition  from equity method to accounting for assets and liabilities.
  *Provide reconciliation between amount derecognized, recognized and adjustment to retained earnings.

PRESENTATION AND DISCLOSURE

1. Comparative Information:

• Ind AS does not require historical summaries to comply with the recognition and measurement requirement of Ind AS.
• In any financial statements containing historical summaries or comparative information in accordance with previous GAAP, an entity shall:
  *Label the previous GAAP information prominently as not being prepared in accordance with Ind AS; and
  *Disclose the nature of the  main  adjustments  that  would  make  it  comply  with Ind AS. An entity need not quantify those adjustments.

2. Explanation of transition to Ind AS:

• Reconciliation of:
  Equity from previous GAAP to Ind AS at transition and last year end;
  Last year’s total comprehensive income under previous GAAP to Ind AS.
• Sufficient detail to understand adjustments to each line item.
• Reconciliation to distinguish correction of errors identified during transition from change in accounting policy.
• Fair value as deemed cost and the amount of the adjustment.
• Ind AS 36 disclosures for impairment during transition.
• If adopted first time exemption option, to disclose the fact and accounting policy until such time those PPE, Intangible Assets, investment properties or intangible assets significantly depreciated/impaired/derecognized.
• Interim financial reports to include reconciliation with equity and profit or loss under previous GAAP.
• Further information to comply with Ind AS 34.