Ind AS 101, First Time Adoption of Indian Accounting Standards: The objective of Ind AS 101 is to ensure that an entity’s first Ind AS financial statements, and its interim financial reports for part of the period covered by those financial statements, contain high-quality information that:
- is transparent for users and comparable over all periods presented;
- provides a suitable starting point for accounting in accordance with Ind AS; and
- can be generated at a cost that does not exceed the
An entity shall apply the Standard in its first Ind AS financial statements and each interim financial report, if any, that it presents in accordance with Ind AS 34 for part of the period covered by its first Ind AS financial statements.
An entity shall prepare and present an opening Ind AS Balance Sheet at the date of transition to Ind AS. This is the starting point for its accounting in accordance with Ind AS.
Accounting policies under Ind AS 101
An entity shall use the same accounting policies in its opening Ind AS Balance Sheet and throughout all periods presented in its first Ind AS financial statements. Those accounting policies shall comply with each Ind AS effective at the end of its first Ind AS reporting period, except as specified in Ind AS 101.
An entity shall, in its opening Ind AS Balance Sheet:
- recognise all assets and liabilities whose recognition is required by Ind AS;
- not recognise items as assets or liabilities if Ind AS do not permit such recognition;
- reclassify items that it recognized in accordance with previous GAAP as one type of asset, liability, or component of equity, but are a different type of asset, liability, or component of equity in accordance with Ind AS; and
- apply Ind AS in measuring all recognised assets and
The accounting policies in opening Ind AS Balance Sheet may differ from those that it used for the same date using previous GAAP. The resulting adjustments arise from events and transactions before the date of transition to Ind AS shall be recognised directly in retained earnings.
This Ind AS establishes two categories of exceptions to the principle that an entity’s opening Ind AS Balance Sheet shall comply with each Ind AS:
- Ind AS 101 prohibit retrospective application of some specific aspects of other Ind
- Ind AS 101 grant exemptions from some specific requirements of other Ind
Presentation and Disclosure
The Standard does not provide exemptions from the presentation and disclosure requirements in other Ind AS. The Standard requires that an entity’s first Ind AS financial statements shall include at least three Balance Sheets, 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.
Explanation of transition to Ind AS
The Standard requires that an entity shall explain how the transition from previous GAAP to Ind AS affected its reported Balance sheet, financial performance and cash flows.
Exceptions to the retrospective application of other Ind AS
The Standard prohibits retrospective application of some aspects of other Ind AS. For example, application of derecognition requirements in Ind AS 109, some aspects of classification and measurement of financial assets, impairment of financial assets, provisions related to embedded derivatives, classification of government loans etc.