IFRS vs Ind AS: Key Differences Every Indian Business Must Know
Ind AS is India's version of IFRS — built on the same foundation, but deliberately not identical. For any Indian business with global investors, a foreign parent, or overseas ambitions, the gap between the two is essential to understand.
Many Indian business owners assume they must choose between IFRS and Ind AS. In reality, for statutory reporting in India, there is no such choice: companies do not file under IFRS as issued by the International Accounting Standards Board. They file under Ind AS — India's own converged version of IFRS.
That distinction matters more than it first appears. Ind AS was built to stay closely aligned with IFRS so that Indian financial statements are globally comparable. But during adoption, India made a set of deliberate modifications — carve-outs and carve-ins — to fit the Companies Act, Indian economic realities, and the needs of local regulators. Roughly ninety-five per cent of your accounting will look the same under both frameworks, but the differences that remain can change reported profit, net worth, and how a global investor reads your numbers.
This guide explains what Ind AS is, whether it applies to your business, and exactly where it diverges from IFRS — in plain language, with the practical consequences spelled out.
The Big Picture: Three Frameworks, One Country
It helps to see the full landscape Indian businesses operate within.
IFRS
Set by the IASB and used or permitted in more than 140 countries. Principles-based, and relies heavily on professional judgement. In India, it is generally not used for statutory financial statements.
Ind AS
Notified by the Ministry of Corporate Affairs under the Companies Act, 2013. Mirrors IFRS very closely but incorporates specific Indian modifications. Larger and listed companies report under it.
Indian GAAP
The earlier "AS" framework that smaller companies below the Ind AS thresholds continue to follow. Less fair-value-driven, and differs from both Ind AS and IFRS in many respects.
So the practical question is rarely "IFRS or Ind AS?" It is: am I on Ind AS or old Indian GAAP — and where does my Ind AS reporting differ from pure IFRS, if a global stakeholder needs that reconciliation?
Why India Converged Instead of Simply Adopting IFRS
India chose convergence rather than wholesale adoption for sound reasons.
The result is a framework that keeps IFRS's core recognition and measurement principles while adjusting specific provisions. Those adjustments are the carve-outs and carve-ins at the heart of this comparison.
Does Ind AS Even Apply to Your Business?
This is the most practical question for an Indian owner, and it turns on two simple factors: whether your company is listed, and its net worth. Under the Companies (Indian Accounting Standards) Rules, 2015, Ind AS was rolled out in phases.
Phase I
Listed companies, and unlisted companies with net worth of ₹500 crore or more.
Phase II
All remaining listed companies (except those only on SME exchanges), and unlisted companies with net worth of ₹250 crore or more.
Group entities
Its holding, subsidiary, associate, and joint venture companies must also apply Ind AS — regardless of their own net worth.
- Net worth is measured on standalone figures and excludes revaluation reserves.
- The switch is irreversible — it continues even if net worth later falls back below the line.
- SME-listed companies are the main exception, and stay on the older Accounting Standards.
- Banks, NBFCs and insurers follow separate roadmaps set by their own regulators.
A format point worth knowing
Ind AS financial statements must follow the prescribed format in Division II of Schedule III to the Companies Act (Division III for NBFCs). IFRS, by contrast, gives companies far more freedom over presentation — one reason Indian statements look more standardised than their global peers.
Carve-Outs and Carve-Ins: the Source of the Differences
Together they explain almost every difference you will encounter. Because both frameworks keep evolving, the precise list changes over time — but the six areas covered next are the ones that most often affect a growing business.
Carve-out
A place where Ind AS deliberately departs from an IFRS requirement, or removes an option IFRS allows.
Carve-in
Extra guidance India added to deal with local scenarios that IFRS does not specifically address.
The Differences That Actually Affect Your Numbers
Bargain purchase gains on acquisitions
Exchange differences on long-term foreign currency borrowings
Foreign-currency rights issues and convertible bonds
Investment property: cost only, no fair value model
Revenue-based amortisation for infrastructure assets
Presentation of the profit and loss statement
Where they agree
It's worth stressing that on the big-ticket standards — revenue recognition (Ind AS 115 / IFRS 15), leases (Ind AS 116 / IFRS 16), and financial instruments (Ind AS 109 / IFRS 9) — the core models are essentially the same. The differences above are targeted, not fundamental.
Quick-Reference Comparison
The table below summarises the divergences most likely to matter to an Indian business with global connections.
| Area | IFRS | Ind AS |
|---|---|---|
| Status in India | Not used for statutory reporting | Mandatory converged framework |
| Overall design | Principles-based, flexible presentation | Converged, with carve-outs; Schedule III format |
| Bargain purchase gain | Recognised in profit or loss | Routed to OCI / capital reserve |
| Long-term FX differences | Recognised in profit or loss | Option to defer and amortise |
| FX rights issue | Often a financial liability | Classified as equity |
| Investment property | Cost or fair value model | Cost model only (fair value disclosed) |
| Revenue-based amortisation | Generally restricted | Permitted for service concessions |
| P&L presentation | One or two statements permitted | Single statement of profit and loss |
| Core standards | Revenue, leases, instruments | Substantially aligned with IFRS |
Why These Differences Matter for Your Business
For an Indian owner, the gap between Ind AS and IFRS becomes real the moment your business steps onto a global stage.
Global investors and lenders
An overseas investor benchmarking you against IFRS peers will restate the carve-out items. Knowing them in advance lets you tell a clean, consistent story.
Foreign parent or subsidiary
If you consolidate into an IFRS-reporting group — or a foreign group consolidates you — the differences must be reconciled every reporting period.
Overseas listing or fundraising
Raising capital or listing abroad often requires IFRS or IFRS-reconciled numbers. The carve-outs are exactly where that reconciliation work concentrates.
Mergers and acquisitions
A cross-border buyer will restate your accounts in due diligence. Bargain-purchase and foreign-exchange treatments are common surprises.
Reported profit and net worth
Because several carve-outs affect earnings volatility and asset values, they can move the metrics that drive valuations, covenants, and tax outcomes.
What's on the Horizon
The frameworks continue to evolve, and Indian businesses should keep two developments in view.
Insurance contracts — Ind AS 117
India has moved to adopt Ind AS 117, the new insurance-contracts standard aligned with IFRS 17, with the IRDAI roadmap bringing insurers into scope from this date.
Income statement overhaul — IFRS 18
IFRS 18, a major overhaul of how the income statement is presented and disclosed, takes effect internationally. India is expected to consider a corresponding Ind AS in due course.
Businesses reporting under Ind AS with global stakeholders should track how these changes are mirrored locally.
Practical Next Steps
Confirm which framework you are on today — Ind AS or the older Accounting Standards — based on your listing status and net worth.
If you are approaching the ₹250 crore net-worth mark, plan the transition early; Ind AS adoption requires restated comparatives.
Identify which carve-outs actually touch your business — foreign currency debt, acquisitions, investment property, and concession assets are the usual triggers.
If you have global investors, a foreign parent, or overseas plans, maintain a clear Ind AS-to-IFRS reconciliation so there are no surprises.
Bring in an adviser before a fundraise, acquisition, or transition — the cost of planning is far lower than the cost of restating later.
The Bottom Line
Ind AS is not a rival to IFRS — it is India's carefully adapted version of it. For the vast majority of transactions, the two produce the same answer.
But the handful of deliberate carve-outs — bargain purchases, foreign-exchange treatment, investment property, and a few others — are precisely where your numbers can diverge from what a global stakeholder expects to see.
Understand those differences, plan for them, and your financial statements become a bridge to global capital rather than a barrier. Ignore them, and they tend to surface at the worst possible moment: mid-transaction.
Frequently Asked Questions
Do Indian companies file their financial statements under IFRS?
No. For statutory reporting, Indian companies do not file under IFRS as issued by the International Accounting Standards Board. They file under Ind AS — India's own converged version of IFRS, notified by the Ministry of Corporate Affairs under the Companies Act, 2013. Ind AS mirrors IFRS closely but includes specific Indian carve-outs and carve-ins.
How do I know if my company must apply Ind AS?
It depends on whether you are listed and on your net worth. Under the Companies (Indian Accounting Standards) Rules, 2015, Phase I (from 1 April 2016) covered listed companies and unlisted companies with net worth of ₹500 crore or more. Phase II (from 1 April 2017) brought in all remaining listed companies, other than those only on SME exchanges, and unlisted companies with net worth of ₹250 crore or more. Once a company is in scope, its holding, subsidiary, associate, and joint venture companies must also apply Ind AS, regardless of their own net worth.
If I adopt Ind AS, can I switch back to the older Accounting Standards later?
No. Once a company crosses the applicable net-worth threshold and adopts Ind AS, the switch is irreversible — it continues to apply Ind AS even if its net worth later falls back below the threshold. Net worth for this test is measured on standalone figures and excludes revaluation reserves.
What is the single biggest difference between IFRS and Ind AS in practice?
For most businesses with an acquisition history, the treatment of a bargain purchase gain stands out most. IFRS recognises the gain immediately in profit or loss, lifting reported earnings. Ind AS instead routes it through other comprehensive income into a capital reserve, so it never reaches headline profit — a common reconciling item when a global investor benchmarks the numbers against IFRS peers.
Do the core accounting standards for revenue, leases, and financial instruments differ between IFRS and Ind AS?
No, not fundamentally. On the big-ticket standards — revenue recognition (Ind AS 115 / IFRS 15), leases (Ind AS 116 / IFRS 16), and financial instruments (Ind AS 109 / IFRS 9) — the core recognition and measurement models are essentially the same. The differences between the two frameworks are targeted carve-outs and carve-ins, such as those covering bargain purchase gains, foreign-exchange treatment, and investment property, rather than a different approach to the fundamentals.
This article is for general information only and does not constitute accounting, tax, or legal advice. Accounting standards and applicability rules change; confirm current requirements with a qualified professional before making decisions.
Reporting under Ind AS — or reconciling it to IFRS?
NDS Advisors helps Indian businesses navigate Ind AS applicability, manage the carve-outs that affect their numbers, and present financials that stand up to global scrutiny.