Mumbai: With the adoption of Indian Accounting Standards (Ind AS), majority of the companies had to make adjustments on account of taxes, financial instruments and revenue recognition.
As per PwC’s Ind AS Impact Analysis, which analysed the reported results for all the Ind AS impacted NIFTY 50 and NIFTY NEXT 50 companies, retirement benefit obligations, share-based payments, and business combination & consolidation were also identified to be more common Ind AS adjustments. These findings are generally consistent with PwC’s initial survey results published in February 2016.
This analysis shows that there was a positive impact on the reported net income of 41 companies (55%) under Ind AS for the quarter ended 30 June 2015. The total increase in Ind AS net income for these was approximately 3,918 crore INR (5.2%). There was a negative impact on the reported net income of 34 companies (45%) under Ind AS. The total decrease in net income was approximately 3,621 crore INR (4.8%), resulting in an overall net increase of approximately 297 crore INR (0.4%).
The percentage impact of certain key accounting areas on the reported net income for the previous quarter ended 30 June 2015 under Ind AS vis-à-vis previous Indian GAAP are:
Other than the pharmaceuticals, life sciences & healthcare, industrial manufacturing and automotive sectors, all other sectors have reported an average decrease in net income. Metals capital projects & infrastructure and telecom sectors have reported the maximum average decrease in net income upon Ind AS adoption.
Analysis of the top impact areas:
About the Ind AS Impact Analysis Report
This analysis report is a follow up to the Ind AS Outlook Survey released in February 2016, to evaluate the impact of Ind AS adoption and challenges faced by corporates in India. This analysis evaluated interim financial information released by 75 companies until 14 September 2016. These companies are listed on the National Stock Exchange (NSE) of India and are included in NIFTY 50 and NIFTY NEXT 50 benchmark indices. This analysis of NIFTY 50 and NIFTY NEXT 50 companies excluded 17 companies that are either banks or non-banking financial companies (NBFCs) or insurance companies to whom Ind AS is not yet applicable, 7 companies who have filed under Indian GAAP and 1 company which did not file Ind AS financial results for the quarter ended 30 June 2015.
The impact of Ind AS transition presented here is based on the reported results for the quarter ended 30 June 2015 under Ind AS vis-à-vis previously reported Indian GAAP results. Since our report is based on quarterly published results which do not have detailed disclosures otherwise available in annual financial statements, we may have made certain assumptions and generalisations for the purpose of aggregating the results and analysis.
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