Standard 101: First-time Adoption of Indian Accounting Standards

Standard 101: First-time Adoption of Indian Accounting Standards · Complied AI

(b)

Appendices C–D grant exemptions from some requirements of other Ind ASs.

Exceptions to the retrospective application of other Ind ASs

13 This Ind AS prohibits retrospective application of some aspects of other Ind ASs. These exceptions are set out in paragraphs 14–17 and Appendix B.

Estimates

14 An entity’s estimates in accordance with Ind ASs at the date of transition to Ind ASs shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

15 An entity may receive information after the date of transition to Ind ASs about estimates that it had made under previous GAAP . In accordance with paragraph 14, an entity shall treat the receipt of that information in the same way as non-adjusting events after the reporting period in accordance with Ind AS 10, Events after the Reporting Period . For example, assume that an entity’s date of transition to Ind ASs is 1 April 2015 and new information on 15 July 2015 requires the revision of an estimate made in accordance with previous GAAP at 31 March 2015. The entity shall not reflect that new information in its opening Ind AS Balance Sheet (unless the estimates need adjustment for any differences in accounting policies or there is objective evidence that the estimates were in error). Instead, the entity shall reflect that new information in profit or loss (or, if appropriate, other comprehensive income) for the year ended 31 March 2016.

16 An entity may need to make estimates in accordance with Ind ASs at the date of transition to Ind ASs that were not required at that date under previous GAAP. To achieve consistency with Ind AS 10, those estimates in accordance with Ind ASs shall reflect conditions that existed at the date of transition to Ind ASs. In particular, estimates at the date of transition to Ind ASs of market prices, interest rates or foreign exchange rates shall reflect market conditions at that date.

17 Paragraphs 14–16 apply to the opening Ind AS Balance Sheet. They also apply to a comparative period presented in an entity’s first Ind AS financial statements, in which case the references to the date of transition to Ind ASs are replaced by references to the end of that comparative period.

Exemptions from other Ind ASs

18 An entity may elect to use one or more of the exemptions contained in Appendices C-D . An entity shall not apply these exemptions by analogy to other items.

19 [Refer to Appendix 1]

Presentation and disclosure

20 This Ind AS does not provide exemptions from the presentation and disclosure requirements in other Ind ASs.

Comparative information

21 An entity’s first Ind AS financial statements shall include at least three Balance Sheet, two Statements of profit and loss, two Statements of cash flows and two Statements of changes in equity and related notes, including comparative information for all statements presented.

Non-Ind AS comparative information and historical summaries

22 Some entities present historical summaries of selected data for periods before the first period for which they present full comparative information in accordance with Ind ASs. This Ind AS does not require such summaries to comply with the recognition and measurement requirements of Ind ASs. Furthermore, 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 information in accordance with previous GAAP, an entity shall:

(c)

if the entity recognised or reversed any impairment losses for the first time in preparing its opening Ind AS Balance Sheet, the disclosures that Ind AS 36, Impairment of Assets , would have required if the entity had recognised those impairment losses or reversals in the period beginning with the date of transition to Ind ASs.

25 The reconciliations required by paragraph 24(a) and (b) shall give sufficient detail to enable users to understand the 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.

26 If an entity becomes aware of errors made under previous GAAP, the reconciliations required by paragraph 24(a) and (b) shall distinguish the correction of those errors from changes in accounting policies.

27 Ind AS 8 does not apply to the changes in accounting policies an entity makes when it adopts Ind ASs or to changes in those policies until after it presents its first Ind AS financial statements . Therefore, Ind AS 8’s requirements about changes in accounting policies do not apply in an entity’s first Ind AS financial statements.

27A If during the period covered by its first Ind AS financial statements an entity changes its accounting policies or its use of the exemptions contained in this Ind AS, it shall explain the changes between its first Ind AS interim financial report and its first Ind AS financial statements, in accordance with paragraph 23, and it shall update the reconciliations required by paragraph 24(a) and (b).

27AA If an entity adopts the first time exemption option provided in accordance with paragraph D7AA , the fact and the accounting policy shall be disclosed by the entity until such time that those items of Property, plant and equipment, investment properties or intan gible assets, as the case may be, are significantly depreciated, impaired or derecognised from the entity’s Balance Sheet.

28 If an entity did not present financial statements for previous periods, its first Ind AS financial statements shall disclose that fact.

Designation of financial assets or financial liabilities

29 An entity is permitted to designate a previously recognised financial asset as a financial asset measured at fair value through profit or loss in accordance with paragraph D19A . The entity shall disclose the fair value of financial assets so designated at the date of designation and their classification and carrying amount in the previous financial statements.

29A An entity is permitted to designate a previously recognised financial liability as a financial liability at fair value through profit or loss in accordance with paragraph D19 . The entity shall disclose the fair value of financial liabilities so designated at the date of designation and their classification and carrying amount in the previous financial statements.

Use of fair value as deemed cost

30 1 If an entity uses fair value in its opening Ind AS Balance Sheet as deemed cost for an item of property, plant and equipment, an intangible asset or a right-of-use asset (see paragraphs D5 and D7 ), the entity’s first Ind AS financial statements shall disclose, for each line item in the opening Ind AS Balance Sheet:

(c)

If an entity changes its accounting policies or its use of the exemptions contained in this Ind AS, it shall explain the changes in each such interim financial report in accordance with paragraph 23 and update the reconciliations required by (a) and (b).

33 Ind AS 34 requires minimum disclosures, which are based on the assumption that users of the interim financial report also have access to the most recent annual financial statements. However, Ind AS 34 also requires an entity to disclose ‘any events or transactions that are material to an understanding of the current interim period’. Therefore, if a first-time adopter did not, in its most recent annual financial statements in accordance with previous GAAP, disclose information material to an understanding of the current interim period, its interim financial report shall disclose that information or include a cross-reference to another published document that includes it.

3 Effective Date

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39A *

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39X As a consequence of issuance of Ind AS 115, Revenue from Contracts with Customers , paragraphs D1(m),(u), D22 and heading after paragraph D33 are amended, paragraphs D34-D35 are added and earlier paragraph D36 in context of ‘Transfer of assets from customers’ is deleted. An entity shall apply those amendments when it applies Ind AS 115.

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39AA *

39AB 4 Ind AS 116, Leases , amended paragraphs 30, C4, D1, D7, D8B, D9 and D9AA, deleted paragraph D9A and added paragraphs D9B–D9E. An entity shall apply those amendments when it applies Ind AS 116.

39AC Appendix B, Foreign Currency Transactions and Advance Consideration of Ind AS 21 added paragraph D36 in context of foreign currency transactions and advance consideration and in paragraph D1, renumbered item (v) as (ua) and a new item (v) is added in its place. An entity shall apply that amendment when it applies Appendix B of Ind AS 21.

39AD 5 *

39AE 6 Ind AS 117 , Insurance Contracts , amended paragraphs B1 and D1 , deleted the heading before paragraph D4 and paragraph D4 , and after paragraph B12 added a heading and paragraph B13 . An entity shall apply those amendments when it applies Ind AS 117.

39AF Appendix C, Uncertainty over Income Tax Treatments, to Ind AS 12 added paragraph E8. An entity shall apply that amendment when it applies Appendix C to Ind AS 12.

39AG 7 Annual Improvements to Ind AS (2021) , amended paragraph D1(f) and added paragraph D13A. An entity shall apply that amendment for annual reporting periods beginning on or after 1st April, 2022.

39AH 8 Deferred Tax related to Assets and Liabilities arising from a Single Transaction, amended paragraph B1 and added paragraph B14. An entity shall apply these amendments for annual reporting periods beginning on or after 1 April 2023.

39AI 9 Lack of Exchangeability (Amendments to Ind AS 21), amended paragraphs 31C and D27 . An entity shall apply those amendments when it applies the amendments to Ind AS 21.

Appendix A

Defined terms

This appendix is an integral part of this Ind AS.

date of transition to Ind ASs

The beginning of the earliest period for which an entity presents full comparative information under Ind ASs in first Ind AS financial statements

deemed cost

An amount used as a surrogate for cost or depreciated cost at a given date. Subsequent depreciation or amortisation assumes that the entity had initially recognised the asset or liability at the given date and that its cost was equal to the deemed cost.

fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. (See Ind AS 113 .)

first Ind AS financial statements

The first annual financial statements in which an entity adopts Indian Accounting Standards (Ind ASs), by an explicit and unreserved statement of compliance with Ind ASs.

first Ind AS reporting period

The latest reporting period covered by an entity’s first Ind AS financial statements

first-time adopter

An entity that presents its first Ind AS financial statements.

Indian Accounting Standards (Ind ASs)

Ind ASs are Accounting Standards prescribed under Section 133 of the Companies Act, 2013.

opening Ind AS Balance Sheet

An entity’s Balance Sheet at the date of transition to Ind ASs

previous GAAP

The basis of accounting that a first-time adopter used for its statutory reporting requirement in India immediately before adopting Ind AS’s. For instance, companies required to prepare their financial statements in accordance with Section 133 of the Companies Act, 2013, shall consider those financial statements as previous GAAP financial statements.

Appendix B

Exceptions to the retrospective application of other Ind ASs

This appendix is an integral part of this Ind AS.

B1 An entity shall apply the following exceptions:

(c)

the requirements in paragraphs B97 – B99 for accounting for a loss of control over a subsidiary, and the related requirements of paragraph 8A of Ind AS 105, Non-current Assets Held for Sale and Discontinued Operations .

However, if a first-time adopter elects to apply Ind AS 103 retrospectively to past business combinations, it shall also apply Ind AS 110 in accordance with paragraph C1 of this Ind AS.

13 Classification and measurement of financial instruments

B8 An entity shall assess whether a financial asset meets the conditions in paragraph 4.1.2 or the conditions in paragraph 4.1.2A of Ind AS 109 on the basis of the facts and circumstances that exist at the date of transition to Ind ASs.

B8A If it is impracticable to assess a modified time value of money element in accordance with paragraphs B4.1.9B - B4.1.9D of Ind AS 109 on the basis of the facts and circumstances that exist at the date of transition to Ind ASs, an entity shall assess the contractual cash flow characteristics of that financial asset on the basis of the facts and circumstances that existed at the date of transition to Ind ASs without taking into account the requirements related to the modification of the time value of money element in paragraphs B4.1.9B–B4.1.9D of Ind AS 109. An entity shall disclose the carrying amount at the reporting date of the financial assets whose contractual cash flow characteristics have been assessed based on the facts and circumstances that existed at the date of transition to Ind ASs without taking into account the requirements related to the modification of the time value of money element in paragraphs B4.1.9B–B4.1.9D of Ind AS 109 until those financial assets are derecognized.

B8B If it is impracticable to assess whether the fair value of a prepayment feature is insignificant in accordance with paragraph B4.1.12 (c) of Ind AS 109 on the basis of the facts and circumstances that exist at the date of transition to Ind ASs, an entity shall assess the contractual cash flow characteristics of that financial asset on the basis of the facts and circumstances that existed at the date of transition to Ind ASs without taking into account the exception for prepayment features in paragraph B4.1.12 of Ind AS 109. An entity shall disclose the carrying amount at the reporting date of the financial assets whose contractual cash flow characteristics have been assessed based on the facts and circumstances that existed at the date of transition to Ind ASs without taking into account the exception for prepayment features in paragraph B4.1.12 of Ind AS 109 until those financial assets are derecognised.

B8C If it is impracticable (as defined in Ind AS 8 ) for an entity to apply retrospectively the effective interest method in Ind AS 109, the fair value of the financial asset or the financial liability at the date of transition to Ind ASs shall be the new gross carrying amount of that financial asset or the new amortised cost of that financial liability at the date of transition to Ind ASs.

Impairment of financial assets

B8D An entity shall apply the impairment requirements in Section 5.5 of Ind AS 109 retrospectively subject to paragraphs B8E, B8F and B8G of this Ind AS.

B8E At the date of transition to Ind ASs, an entity shall use reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognised (or for loan commitments and financial guarantee contracts the date that the entity became a party to the irrevocable commitment in accordance with paragraph 5.5.6 of Ind AS 109) and compare that to the credit risk at the date of transition to Ind ASs (also see paragraphs B8EA–B8EB of this Ind AS).

B8EA An entity should seek to approximate the credit risk on initial recognition by considering all reasonable and supportable information that is available without undue cost or effort. An entity is not required to undertake an exhaustive search for information when determining, at the date of transition to Ind ASs, whether there have been significant increases in credit risk since initial recognition. If an entity is unable to make this determination without undue cost or effort paragraph B8G of this Ind AS applies.

B8EB In order to determine the loss allowance on financial instruments initially recognised (or loan commitments or financial guarantee contracts to which the entity became a party to the contract) prior to the date of initial application, both on transition and until the derecognition of those items, an entity shall consider information that is relevant in determining or approximating the credit risk at initial recognition. In order to determine or approximate the initial credit risk, an entity may consider internal and external information, including portfolio information, in accordance with paragraphs B5.5.1–B5.5.6 of Ind AS 109.

B8F When determining whether there has been a significant increase in credit risk since initial recognition, an entity may apply:

(b)

the rebuttable presumption in paragraph 5.5.11 of Ind AS 109 for contractual payments that are more than 30 days past due if an entity will apply the impairment requirements by identifying significant increases in credit risk since initial recognition for those financial instruments on the basis of past due information.

B8G If, at the date of transition to Ind ASs, determining whether there has been a significant increase in credit risk since the initial recognition of a financial instrument would require undue cost or effort, an entity shall recognise a loss allowance at an amount equal to lifetime expected credit losses at each reporting date until that financial instrument is derecognised (unless that financial instrument is low credit risk at a reporting date, in which case paragraph B8F(a) applies).

Embedded derivatives

B9 A first-time adopter shall assess whether an embedded derivative is required to be separated from the host contract and accounted for as a derivative on the basis of the conditions that existed at the later of the date it first became a party to the contract and the date a reassessment is required by paragraph B4.3.11 of Ind AS 109.

Government loans

B10 A first-time adopter shall classify all government loans received as a financial liability or an equity instrument in accordance with Ind AS 32, Financial Instruments: Presentation . Except as permitted by paragraph B11, a first-time adopter shall apply the requirements in Ind AS 109, Financial Instruments, and Ind AS 20, Accounting for Government Grants and Disclosure of Government Assistance , prospectively to government loans existing at the date of transition to Ind ASs and shall not recognise the corresponding benefit of the government loan at a below-market rate of interest as a government grant. Consequently, if a first-time adopter did not, under its previous GAAP, recognise and measure a government loan at a below-market rate of interest on a basis consistent with Ind AS requirements, it shall use its previous GAAP carrying amount of the loan at the date of transition to Ind ASs as the carrying amount of the loan in the opening Ind AS Balance Sheet. An entity shall apply Ind AS 109 to the measurement of such loans after the date of transition to Ind ASs.

B11 Despite paragraph B10, an entity may apply the requirements i n Ind AS 109 and Ind AS 20 retrospectively to any government loan originated before the date of transition to Ind ASs, provided that the information needed to do so had been obtained at the time of initially accounting for that loan.

B12 The requirements and guidance in paragraphs B10 and B11 do not preclude an entity from being able to use the exemptions described in paragraphs D19–D19C relating to the designation of previously recognised financial instruments at fair value through profit or loss.

Insurance contracts

B13 14 An entity shall apply the transition provisions in paragraphs C1–C24 and C28 in Appendix C of Ind AS 117 to contracts within the scope of Ind AS 117 . The references in those paragraphs in Ind AS 117 to the transition date shall be read as the date of transition to Ind ASs.

Deferred tax related to leases and decommissioning, restoration and similar liabilities

B14 15 Paragraphs 15 and 24 of Ind AS 12, Income Taxes exempt an entity from recognising a deferred tax asset or liability in particular circumstances. Despite this exemption, at the date of transition to Ind ASs, a first-time adopter shall recognise a deferred tax asset�to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised�and a deferred tax liability for all deductible and taxable temporary differences associated with:

(b)

assets in the development or production phases at the amount determined for the cost centre under the entity’s previous GAAP. The entity shall allocate this amount to the cost centre’s underlying assets pro rata using reserve volumes or reserve values as of that date.

The entity shall test exploration and evaluation assets and assets in the development and production phases for impairment at the date of transition to Ind ASs in accordance with Ind AS 106, Exploration for and Evaluation of Mineral Resources , or Ind AS 36 respectively and, if necessary, reduce the amount determined in accordance with (a) or (b) above. For the purposes of this paragraph, oil and gas assets comprise only those assets used in the exploration, evaluation, development or production of oil and gas.

D8B 26 Some entities hold items of property, plant and equipment, right -of- use assets or intangible assets that are used, or were previously used, in operations subject to rate regulation. The carrying amount of such items might include amounts that were determined under previous GAAP but do not qualify for capitalisation in accordance with Ind ASs. If this is the case, a first-time adopter may elect to use the previous GAAP carrying amount of such an item at the date of transition to Ind ASs as deemed cost. If an entity applies this exemption to an item, it need not apply it to all items. At the date of transition to Ind ASs, an entity shall test for impairment in accordance with Ind AS 36 each item for which this exemption is used. For the purposes of this paragraph, operations are subject to rate regulation if they are governed by a framework for establishing the prices that can be charged to customers for goods or services and that framework is subject to oversight and/or approval by a rate regulator (as defined in Ind AS 114, Regulatory Deferral Accounts ).

Leases

D9 27 A first-time adopter may assess whether a contract existing at the date of transition to Ind ASs contains a lease by applying paragraphs 9 - 11 of Ind AS 116 to those contracts on the basis of facts and circumstances existing at that date.

D9A *

D9AA 28 When a lease includes both land and building elements, a first time adopter lessor may assess the classification of each element as finance or an operating lease at the date of transition to Ind ASs on the basis of the facts and circumstances existing as at that date.

D9B 29 When a first-time adopter that is a lessee recognises lease liabilities and right-of-use assets, it may apply the following approach to all of its leases (subject to the practical expedients described in paragraph D9D):-

(b)

the carrying amounts required by the rest of this Ind AS, based on the subsidiary’s date of transition to Ind ASs. These carrying amounts could differ from those described in (a):

(i)

when the exemptions in this Ind AS result in measurements that depend on the date of transition to Ind ASs.

(ii)

when the accounting policies used in the subsidiary’s financial statements differ from those in the consolidated financial statements. For example, the subsidiary may use as its accounting policy the cost model in Ind AS 16 Property, Plant and Equipment, whereas the group may use the revaluation model.

A similar election is available to an associate or joint venture that becomes a first-time adopter later than an entity that has significant influence or joint control over it.

D17 However, if an entity becomes a first-time adopter later than its subsidiary (or associate or joint venture) the entity shall, in its consolidated financial statements, measure the assets and liabilities of the subsidiary (or associate or joint venture) at the same carrying amounts as in the financial statements of the subsidiary (or associate or joint venture), after adjusting for consolidation and equity accounting adjustments and for the effects of the business combination in which the entity acquired the subsidiary. Notwithstanding this requirement, a non-investment entity parent shall not apply the exception to consolidation that is used by any investment entity subsidiaries. Similarly, if a parent becomes a first - time adopter for its separate financial statements earlier or later than for its consolidated financial statements, it shall measure its assets and liabilities at the same amounts in both financial statements, except for consolidation adjustments.

Compound financial instruments

D18 Ind AS 32 Financial Instruments: Presentation requires an entity to split a compound financial instrument at inception into separate liability and equity components. If the liability component is no longer outstanding, retrospective application of Ind AS 32 involves separating two portions of equity. The first portion is in retained earnings and represents the cumulative interest accreted on the liability component. The other portion represents the original equity component. However, in accordance with this Ind AS, a first-time adopter need not separate these two portions if the liability component is no longer outstanding at the date of transition to Ind ASs.

Designation of previously recognised financial instruments

D19 Ind AS 109 permits a financial liability (provided it meets certain criteria) to be designated as a financial liability at fair value through profit or loss. Despite this requirement an entity is permitted to designate, at the date of transition to Ind ASs, any financial liability as at fair value through profit or loss provided the liability meets the criteria in paragraph 4.2.2 of Ind AS 109 at that date.

D19A An entity may designate a financial asset as measured at fair value through profit or loss in accordance with paragraph 4.1.5 of Ind AS 109 on the basis of the facts and circumstances that exist at the date of transition to Ind ASs.

D19B An entity may designate an investment in an equity instrument as at fair value through other comprehensive income in accordance with paragraph 5.7.5 of Ind AS 109 on the basis of the facts and circumstances that exist at the date of transition to Ind ASs.

D19C For a financial liability that is designated as a financial liability at fair value through profit or loss, an entity shall determine whether the treatment in paragraph 5.7.7 of Ind AS 109 would create an accounting mismatch in profit or loss on the basis of the facts and circumstances that exist at the date of transition to Ind ASs.

Fair value measurement of financial assets or financial liabilities at initial recognition

D20 Despite the requirements of paragraphs 7 and 9 of this Ind AS, an entity may apply the requirements in paragraph B5.1.2A (b) of Ind AS 109 prospectively to transactions entered into on or after the date of transition to Ind ASs.

Decommissioning liabilities included in the cost of property, plant and equipment

D21 Appendix ‘A’ to Ind AS 16 Changes in Existing Decommissioning, Restoration and Similar Liabilities requires specified changes in a decommissioning, restoration or similar liability to be added to or deducted from the cost of the asset to which it relates; the adjusted depreciable amount of the asset is then depreciated prospectively over its remaining useful life. A first-time adopter need not comply with these requirements for changes in such liabilities that occ urred before the date of transition to Ind ASs. If a first-time adopter uses this exemption, it shall:

(b)

32 the currency is not exchangeable into a relatively stable foreign currency. Exchangeability is assessed in accordance with Ind AS 21 .

D28 The functional currency of an entity ceases to be subject to severe hyperinflation on the functional currency normalisation date. That is the date when the functional currency no longer has either, or both, of the characteristics in paragraph D27, or when there is a change in the entity’s functional currency to a currency that is not subject to severe hyperinflation.

D29 When an entity’s date of transition to Ind ASs is on, or after, the functional currency normalisation date, the entity may elect to measure all assets and liabilities held before the functional currency normalisation date at fair value on the date of transition to Ind ASs. The entity may use that fair value as the deemed cost of those assets and liabilities in the opening Ind AS Balance Sheet.

D30 When the functional currency normalisation date falls within a 12 - month comparative period, the comparative period may be less than 12 months, provided that a complete set of financial statements (as required by paragraph 10 of Ind AS 1) is provided for that shorter period.

Joint arrangements

D31 [Refer to Appendix 1]

Joint ventures - transition from proportionate consolidation to the equity method

D31AA When changing from proportionate consolidation to the equity method, an entity shall recognise its investment in the joint venture at transition date to Ind ASs. That initial investment shall be measured as the aggregate of the carrying amounts of the assets and liabilities that the entity had previously proportionately consolidated, including any goodwill arising from acquisition. If the goodwill previously belonged to a larger cash-generating unit, or to a group of cash-generating units, the entity shall allocate goodwill to the joint venture on the basis of the relative carrying amounts of the joint venture and the cash-generating unit or group of cash- generating units to which it belonged.

D31AB The balance of the investment in joint venture at the date of transition to Ind ASs, determined in accordance with paragraph D31AA above is regarded as the deemed cost of the investment at initial recognition.

D31AC A first-time adopter shall test investment in joint venture for impairment in accordance with Ind AS 36 at the date of transiti on to Ind ASs, regardless of whether there is any indication that the investment may be impaired. Any resulting impairment shall be recognised as an adjustment to retained earnings at the date of transition to Ind ASs. The initial recognition exception in paragraphs 15 and 24 of Ind AS 12 Income Taxes does not apply when the entity recognises an investment in a joint venture resulting from applying the transition requirements for joint ventures that had previously been proportionately consolidated.

D31AD If aggregating all previously proportionately consolidated assets and liabilities results in negative net assets, an entity shall assess whether it has legal or constructive obligations in relation to the negative net assets and, if so, the entity shall recognise the corresponding liability. If the entity concludes that it does not have legal or constructive obligations in relation to the negative net assets, it shall not recognise the corresponding liability but it shall adjust retained earnings at the date of transition to Ind ASs. The entity shall disclose this fact, along with its cumulative unrecognised share of losses of its joint ventures at the date of transition to Ind ASs.

D31AE An entity shall disclose a breakdown of the assets and liabilities tha t have been aggregated into the single line investment balance at the date of transition to Ind ASs. That disclosure shall be prepared in an aggregated manner for all joint ventures at the date of transition to Ind ASs.

D31AF After initial recognition at the date of transition to Ind ASs, an entity shall account for its investment in the joint venture using the equity method in accordance with Ind AS 28.

Joint operations—transition from the equity method to accounting for assets and liabilities

D31AG When changing from the equity method to accounting for assets and liabilities in respect of its interest in a joint operation, an entity shall, at the date of transition to Ind ASs, derecognise the investment that was previously accounted for using the equity method and any other items that formed part of the entity’s net investment in the arrangement in accordance with paragraph 38 of Ind AS 28 and recognise its share of each of the assets and the liabilities in respect of its interest in the joint operation, including any goodwill that might have formed part of the carrying amount of the investment.

D31AH An entity shall determine its interest in the assets and liabilities relating to the joint operation on the basis of its rights and obligations in a specified proportion in accordance with the contractual arrangement. An entity measures the initial carrying amounts of the assets and liabilities by disaggregating them from the carrying amount of the investment at the date of transition to Ind ASs on the basis of the information used by the entity in applying the equity method.

D31AI Any difference arising from the investment previously accounted for using the equity method together with any other items that formed part of the entity’s net investment in the arrangement in accordance with paragraph 38 of Ind AS 28, and the net amount of the assets and liabilities, including any goodwill, recognised shall be:

(b)

provide a reconciliation between the investment derecognised, and the assets and liabilities recognised, together with any remaining difference adjusted in retained earnings, at the date of transition to Ind ASs.

Stripping costs in the production phase of a surface mine

D32 A first-time adopter may apply the Appendix B of Ind AS 16 Stripping Costs in the Production Phase of a Surface Mine from the date of transition to Ind ASs. As at transition date to Ind ASs, any previously recognised asset balance that resulted from stripping activity undertaken during the production phase (‘predecessor stripping asset’) 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 ore body with which the predecessor stripping asset can be associated. Such balances shall be depreciated or amortised over the remaining expected useful life of the identified component of the ore body to which each predecessor stripping asset balance relates. If there is no identifiable component of the ore body to which that predecessor stripping asset relates, it shall be recognised in opening retained earnings at the transition date to Ind ASs.

Designation of contracts to buy or sell a non- financial item

D33 Ind AS 109 permits some contracts to buy or sell a non-financial item to be designated at inception as measured at fair value through profit or loss ( see paragraph 2.5 of Ind AS 109 ). Despite this requirement an entity is permitted to designate, at the date of transition to Ind ASs, contracts that already exist on that date as measured at fair value through profit or loss but only if they meet the requirements of paragraph 2.5 of Ind AS 109 at that date and the entity designates all similar contracts.

33 Revenue

D34 34 A first-time adopter may apply the transition provisions in paragraph C5 of Ind AS 115. In those paragraphs references to the ‘date of initial application’ shall be interpreted as the beginning of the first Ind AS reporting period. If a first-time adopter decides to apply those transition provisions, it shall also apply paragraph C6 of Ind AS 115.

D34AA Omitted 35

D35 36 A first-time adopter is not required to restate contracts that were completed before the earliest period presented. A completed contract is a contract for which the entity has transferred all of the goods or services identified in accordance with previous GAAP.

Non- current assets held for sale and discontinued operations

D35AA Ind AS 105 requires non-current assets (or disposal groups) that meet the criteria to be classified as held for sale, non-current assets (or disposal groups) that are held for distribution to owners and operations that meet the criteria to be classified as discontinued and carried at lower of its carrying amount and fair value less cost to sell on the initial date of such identification. A first time adopter can:

Notes, amendments & references (101)

E8 A first-time adopter whose date of transition to Ind ASs is before the date of notification of this Appendix may elect not to reflect the application of the Appendix C, Uncertainty over Income Tax Treatments, to Ind AS 12, Income Taxes , in comparative information in its first Ind AS financial statements. An entity that makes that election shall recognise the cumulative effect of applying Appendix C to Ind AS 12 as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at the beginning of its first Ind AS reporting period.

Appendix 1

Note: This Appendix is not a part of the Ind AS 101, First-time Adoption of Indian Accounting Standards. The purpose of this Appendix is only to highlight major differences between Ind AS 101 and corresponding International Financial Reporting Standard (IFRS) 1, First-time Adoption of International Financial Reporting Standards.

Major differences between Indian Accounting Standard (Ind AS) 101 First-time Adoption of Indian Accounting Standards and IFRS 1

1 Paragraph 3 of Ind AS 101 specifies that an entity’s first Ind AS financial statements are the first annual financial statements in which the entity adopts Ind ASs in accordance with Ind ASs notified under the Companies Act, 2013 whereas IFRS 1 provides various examples of first IFRS financial statements.

2 Paragraph 4, 4A, 4B, 23A and 23B of IFRS 1 provide various examples of instances when an entity does not apply this IF RS. Ind AS 101 does not provide the same. In order to maintain consistency with paragraph numbers of IFRS 1, the paragraph number is retained in Ind AS 101.

3 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.

4 Under IFRS 1, para C4(c) requires, the first-time adopter shall exclude from its opening Ind AS Balance Sheet any item recognised in accordance with previous GAAP that does not qualify for recognition as an asset or liability under Ind ASs. The first-time adopter shall account for the resulting change in the retained earnings as at the transition date except in certain specific instances where it requires adjustment in the goodwill. In such specific instances where IFRS 1 allows adjustment in the goodwill, under Ind AS 101 it can be adjusted with the Capital reserve to the extent such adjustment amount does not exceed the balance available in Capital reserve.

5 Ind AS 101 in addition to exemptions provided under IFRS 1, also provides certain optional exemptions relating to the long-term foreign currency monetary items and service concession arrangements relating to toll roads. Accordingly, paragraphs 6 and D22 have been modified. Further a heading and paragraph D13AA have been added after paragraph D13.

6 Certain IFRS 1 exceptions to the retrospective application of other IFRS refer to transitional provisions of other IFRSs. However Ind ASs does not provide transitional provisions, accordingly transitional provisions in other IFRSs have been incorporated in the paragraphs B8A, B8B, B8D, B8E, B8EA and B8EB of Ind AS 101.

7 Certain exemptions in Appendix D of IFRS 1 refer to transitional provisions of other IFRSs. However Ind ASs do not provide transitional provisions, accordingly wherever considered an appropriate transitional provision in other IFRSs has been incorporated in the respective exemptions in Appendix D of Ind AS 101. The following paragraphs in IFRS 1 provide the transitional provisions of other IFRSs which are included in Ind AS 101:

(i) Paragraph D4 includes the transitional provisions of IFRS 4 Insurance Contracts;

(ii) 39 Omitted;

(iii) Paragraph D22 includes the transitional provisions of IFRIC 12 Service Concession Arrangements ;

(iv) Paragraph D25 includes the transitional provisions of IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments ;

(v) 40 Paragraphs D31AA-D31AL includes the transitional provisions of IFRS 11 Joint Arrangements. Accordingly, paragraph D31 of IFRS 1 has not been included;

(vi) Paragraph D32 includes the transitional provisions of IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine; and

(vii) Paragraph D34 and D35 includes the transitional provisions of IFRS 15 Revenue from contracts with customer .

8 IFRS 1 provides for various optional exemptions that an entity can seek while an entity transitions to IFRS from its previous GAAP. Similar provisions have been retained under Ind AS 101. However, there are few changes that have been made, which can be broadly categorized as follows:

(a) Elimination of effective dates prior to transition date to Ind ASs. IFRS 1 provides for various dates from which a standard could have been implemented. For example,

Paragraph D2 of IFRS 1 provides that an entity is encouraged, but not required, to apply IFRS 2 Share-based Payment to equity instruments that were granted on or before 7 November 2002 or to instruments that were granted after 7 November 2002 and vested before the later of (a) the date of transition to IFRSs and (b) 1 January 2005. However, for Ind AS 101 purposes, all these dates have been changed to coincide with the transition date elected by the entity adopting these converged standards ie Ind AS.

(b) Deletion of borrowing cost exemptions not relevant for India:

Paragraph D23 of IFRS 1 provides for transitional adjustment requiring companies to apply the provisions of IAS 23 prospectively after the transition date to IFRS. However, this was considered as not relevant in Indian situation as AS 16 always required an entity to capitalize borrowing costs as compared to IAS 23 where it provided an option to expense out such borrowing cost.

1 Paragraph D7AA has been added to provide for transitional relief from the retrospective application of Ind AS 16, Property, Plant and Equipment . Paragraph D7AA, provides an entity option to use carrying values of all such assets as on the date of transition to Ind ASs, in accordance with previous GAAP as an acceptable starting point under Ind AS. Paragraph 27AA has been included in Ind AS 101 which requires the disclosure that if an entity adopts for first time exemption the option provided in accordance with paragraph D7AA, the fact and the accounting policy shall be disclosed by the entity until such time that those items of property, plant and equipment, investment properties or intangible assets, as the case may be, are significantly depreciated, impaired or derecognised from the entity’s Balance Sheet.

2 41 Paragraph D9AA has been added to provide for transitional relief while applying Ind AS 116, Leases . D9AA provides an entity to use the transition date facts and circumstances for lease arrangements which includes both land and building elements to assess the classification of each element as finance or an operating lease at the transition date to Ind ASs.

3 Paragraph D35AA has been added to provide for transitional relief while applying Ind AS 105 - Non- current Assets Held for Sale and Discontinued Operations . Paragraph D35AA provides an entity to use the transitional date circumstances to measure such assets or operations at the lower of carrying value and fair value less cost to sell.

9 42 Paragraphs E1-E2 of Appendix E of IFRS 1 provides ‘Short-term exemptions from IFRSs’, however Ind AS 101 does not provide the aforesaid short-term exemptions. In order to maintain consistency with paragraph numbers of IFRS 1, the same have been retained in Ind AS 101.

10 43 IFRS 9 Financial Instruments is effective from annual period beginning on or after January 1, 2018. As the above said standard is not yet effective consequential amendments due to this standard have not been incorporated in current version of IFRS 1. However, corresponding Ind AS 109, Financial Instruments has been issued with consequential amendments in other Ind ASs including Ind AS 101. Accordingly, its consequential amendments to Ind AS 109 have been incorporated in Ind AS 101.

11 Different terminology is used in Ind AS 101, e.g., the term ‘Balance Sheet’ is used instead of ‘Statement of financial position’ and ‘Statement of profit and loss’ is used instead of ‘Statement of comprehensive income’.

12 44 Following paragraph numbers appear as ‘deleted’ in IFRS 1. In order to maintain consistency with paragraph numbers of IF RS 1, the paragraph numbers are retained in Ind AS 101:

(i) Paragraph 19

(ii) Paragraph D1(b)

(iii) Paragraph D1(e)

(iv) Paragraph D1(o)

(v) Paragraph D4

(vi) Paragraphs D9A and D9C

(vii) 45

(viii) Paragraph D24

(ix) Paragraph D31

(x) Paragraphs E3-E7

13 46 IAS 40, Investment Property permits both cost model and fair value model (except in some situations) for measurement of investment properties after initial recognition. Ind AS 40, Investment Property , permits only the cost model. As a consequence, paragraph 30 is amended and paragraphs D7(a) and D9C are deleted.

14 47 Paragraphs 34 to 39W and 39Y to 39AB and 39AD of IFRS 1 have not been included in Ind AS 101 as these paragraphs relate to effective date and are not relevant in Indian context. However, in order to maintain consistency with paragraph numbers of IFRS 1, these paragraph numbers have been retained in Ind AS 101.

15 48 Omitted

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Footnotes

# This Ind AS was notified vide G.S.R. 111(E) dated 16th February, 2015 and was amended vide Notification No. G.S.R. 365(E) dated 30th March, 2016, G.S.R. 310(E) dated 28th March, 2018, G.S.R. 273(E) dated 30th March, 2019, G.S.R. 274(E) dated 30th March, 2019, G.S.R. 419(E) dated 18th June, 2021 ,G.S.R. 255(E) dated 23rd March, 2022, G.S.R. 242(E) dated 31st March, 2023, G.S.R. 492(E) dated 12th August, 2024 and G.S.R. 549 (E) dated 13th August, 2025.

1 Substituted vide Notification No. G.S.R. 365(E) dated 30th March, 2016 and, thereafter, substituted vide Notification No. G.S.R. 273(E) dated 30th March, 2019.

2 Substituted vide Notification No. G.S.R. 291(E) dated 7th May, 2025

3 Heading and paragraphs 34-39AC inserted vide Notification No. G.S.R. 310(E) dated 28th March, 2018.

* Refer Appendix 1

4 stituted vide Notification No. G.S.R. 273(E) dated 30th March, 2019.

5 Paragraph 39AD-39AF inserted vide Notification No. G.S.R. 274(E) dated 30th March, 2019.

6 Substituted vide Notification No. G.S.R. 492(E) dated 12th August, 2024.

7 Inserted vide Notification No. G.S.R. 255 (E) dated 23rd March, 2022.

8 Inserted vide Notification No. G.S.R. 242 (E) dated 31st March, 2023.

9 Inserted vide Notification No. G.S.R. 291 (E) dated 7th May, 2025.

10 Substituted vide Notification No. G.S.R. 419(E) dated 18th June, 2021.

11 Sub-paragraphs (f)-(i) substituted vide Notification No. G.S.R. 242(E) dated 31st March, 2023.

12 Substituted vide Notification No. G.S.R. 492(E) dated 12th August, 2024.

13 Substituted vide Notification No. G.S.R. 419(E) dated 18th June, 2021.

14 Inserted vide Notification No. G.S.R. 242(E) dated 31st March, 2023 and, thereafter. substituted vide Notification No. G.S.R. 492(E) dated 12th August, 2024.

15 Inserted vide Notification No. G.S.R. 242(E) dated 31st March, 2023.

16 Such changes include reclassifications from or to intangible assets if goodwill was not recognised in accordance with previous GAAP as an asset. This arises if, in accordance with previous GAAP, the entity (a) deducted goodwill directly from equity or (b) did not treat the business combination as an acquisition or (c) recognised capital reserve in a business combination accounted for as an acquisition and the amount of reclassification mentioned in (i) above exceeds the balance available in that reserve.

17 Substituted vide Notification No. G.S.R.273(E) dated 30th March, 2019.

* Refer Appendix 1. Omitted vide Notification No. G.S.R. 492(E) dated 12th August, 2024.

18 Substituted vide Notification No. G.S.R. 273(E) dated 30th March, 2019.

19 Substituted vide Notification No. G.S.R. 255 (E) dated 23rd March, 2022.

20 Substituted vide Notification No. G.S.R. 365(E) dated 30th March, 2016 and, thereafter, substituted vide Notification No. G.S.R. 310(E) dated 28th March, 2018.

21 Substituted vide Notification No. G.S.R. 310(E) dated 28th March, 2018.

22 Renumbered vide Notification No. G.S.R. 310(E) dated 28th March, 2018.

23 Inserted vide Notification No. G.S.R. 310(E) dated 28th March, 2018.

* Refer Appendix 1,. Paragraph D4 along with its heading omitted vide Notification No. G.S.R. 492(E) dated 12th August, 2024.

24 Substituted vide Notification No. G.S.R. 365(E) dated 30th March, 2016.

25 Inserted vide Notification No. G.S.R. 273(E) dated 30th March, 2019.

26 Substituted vide Notification No. G.S.R. 273(E) dated 30th March, 2019.

27 Substituted vide Notification No. G.S.R. 273(E) dated 30th March, 2019.

* Refer Appendix 1. Omitted vide Notification No. G.S.R. 273(E) dated 30th March, 2019.

28 Substituted vide Notification No. G.S.R. 273(E) dated 30th March, 2019.

29 Paragraphs D9B- D9E inserted vide Notification No. G.S.R. 273(E) dated 30th March, 2019.

30 Inserted vide Notification No. G.S.R. 255 (E) dated 23rd March, 2022.

31 Heading and opening paragraph substituted vide Notification No. G.S.R. 365(E) dated 30th March, 2016 and, thereafter, substituted vide Notification No. G.S.R. 310(E) dated 28th March, 2018.

32 Substituted vide Notification No. G.S.R. 291(E) dated 7th May, 2025.

33 Substituted vide Notification No. G.S.R. 310(E) dated 28th March, 2018.

34 Omitted vide Notification No. G.S.R. 365(E) dated 30th March, 2016 and thereafter, inserted vide Notification No. G.S.R. 310(E) dated 28th March, 2018.

35 Omitted vide Notification No. G.S.R. 365(E) dated 30th March, 2016

36 Omitted vide Notification No. G.S.R. 365(E) dated 30th March, 2016 and thereafter, inserted vide Notification No. G.S.R. 310(E) dated 28th March, 2018.

37 Paragraph and heading inserted vide Notification No. G.S.R. 365(E) dated 30th March, 2016 and, thereafter, substituted vide Notification No. G.S.R. 310(E) dated 28th March, 2018.

38 Paragraphs E1-E8 and heading inserted vide Notification No. G.S.R. 274(E) dated 30th March, 2019.

* Refer Appendix 1.

39 Omitted vide Notification No. G.S.R. 242(E) dated 31st March, 2023.

40 Editorial correction notified vide Notification No. G.S.R. 549(E) dated 13th August, 2025.

41 Editorial correction notified vide Notification No. G.S.R. 549(E) dated 13th August, 2025.

42 Substituted vide Notification No. G.S.R. 274(E) dated 30th March, 2019.

43 Substituted vide Notification No. G.S.R. 365(E) dated 30th March, 2016.

44 Substituted vide Notification No. G.S.R. 273(E) dated 30th March, 2019, and, thereafter substituted vide Notification No. G.S.R. 492(E) dated 12th August, 2024.

45 Editorial correction notified vide Notification No. G.S.R. 549(E) dated 13th August, 2025.

46 Inserted vide Notification No. G.S.R. 365(E) dated 30th March, 2016 and, thereafter, substituted vide Notification No. G.S.R. 273(E) dated 30th March, 2019.

47 Inserted vide Notification No. G.S.R. 365(E) dated 30th March, 2016 and, thereafter, substituted vide Notification No. G.S.R. 310(E) dated 28th March, 2018, G.S.R. 273(E) dated 30th March, 2019, G.S.R. 274(E) dated 30th March, 2019 and G.S.R. 492(E) dated 12th August, 2024.

48 Inserted vide Notification No. G.S.R. 242(E) dated 31st March, 2023 and thereafter, omitted vide Notification No. G.S.R. 492(E) dated 12th August, 2024.