applicability of IND AS

[Jalpa Shah]

Dear ALL

Is IND AS applicable to LLP ?

We have one listed holding company and its subsidiary is llp 

So we have to prepare the balance sheet of LLP with Ind as or Gaap ?

Is there any specific criteria for form 8 (ANNUAL ACCOUNTS ) of llp  regarding Ind as or Gaap ?

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Thanking You

 

With Warm Regards, 

CS Jalpa Jignashu Shah 
808, Span Trade Centre, Opp. Kocharab Asharam, 
Nr. Paldi Cross Road, Pritamnagar, Ahmedabad - 380006
Tele: (079) - 40092289, 26582289

M: 9328238330

[Ashutosh Shukla]

Hi,

Here is the relevant extract from ITFG Bulletin 11 available at https://www.icai.org/new_post.html?post_id=12745

"Issue 7: A Ltd. is a first-time adopter of Ind AS. It had incorporated a partnership firm with B Ltd. namely, M/s A&B Associates. Whether Ind AS will be applicable to M/s A & B Associates by virtue of the fact that Ind AS is applicable to A Ltd? Also clarify, whether Ind AS will be applicable to non-corporate entities? 

Response: The applicability of Ind AS has been specified for classes of companies specified in Rule 4 of Companies (Indian Accounting Standards) Rules, 2015. Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015, are applicable for the corporates only. Non- corporates are required to follow the accounting standards issued by the Institute of Chartered Accountants of India.. They cannot be applied by non-corporate entities even voluntarily. 

However, in case, a relevant regulator specifically provides for implementation of Ind AS, the non-corporate entities shall apply Ind AS, for example, SEBI has mandated implementation of Ind AS for Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs). Similarly, if Central Government notifies certain body corporate under clause (1)(4)(f) of Companies Act, 2013, such entities will be required to apply Ind AS. For other non-company entities, Accounting Standards issued by the ICAI shall be applicable and there will be no option to follow Ind AS to such entities. 

Accordingly, in the given case, Ind AS is not applicable to partnership firms. However, for the purpose of consolidation, the partnership firm will be required to provide financial statements data prepared as per Ind AS to A Ltd provided the partnership qualifies as a subsidiary/joint venture/associate of A Ltd."

According to the above extract, it appears that you would be required to comply with Ind AS so as to provide data to the holding company. In addition, such non-corporate entities shall also be required to comply with GAAP, as per a commentary issued by PwC, which is available at https://www.pwc.in/assets/pdfs/research-insights/2019/pwc-reportinginbrief-ind-as-technical-facilitation-group-itfg-clarification-bulletin-18.pdf. Accordingly, the relevant financials should be prepared in accordance with both GAAP and IndAS.

Other learned members may also share their opinion in this regard.

Thanks and Regards,

CS Ashutosh Shukla

[Jalpa Shah]

Thank you for your guidance..

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