The Reserve Bank of India asked the banks in the country to follow Indian Accounting Standards (Ind AS), an accounting standard converged with International Financial Reporting Standards (IFRS) from April 2018. RBI, in a notification said, banks shall comply with the Indian Accounting Standards (Ind AS) for financial statements for accounting periods beginning from April 1, 2018 onwards, with comparatives for the periods ending March 31, 2018 or thereafter. Ind AS shall be applicable to both standalone financial statements and consolidated financial statements. Comparatives shall mean comparative figures for the preceding accounting period. Banks shall apply Ind AS only as per the above timelines and shall not be permitted to adopt Ind AS earlier, it said. According to RBI, there will be an impact of new accounting norms on profit planning and budgeting, taxation, capital planning, and impact on capital adequacy. It advised the banks to set up a steering committee headed by an official of the rank of an executive director (or equivalent) comprising members from cross-functional areas of the bank to immediately initiate the implementation process. RBI added that the Ind AS implementation is likely to significantly impact the financial reporting systems and processes and, as such, these changes need to be planned, managed, tested and executed in advance of the implementation date.
