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Ind AS Industry Insights - Hedge accounting under Ind AS 109 – Implications for the manufacturing industry

The new hedge accounting model under Ind AS 109 Financial Instruments will allow entities to reduce profit or loss and balance sheet volatility by applying hedge accounting in more circumstances. The change in accounting treatment is expected to prompt some companies to review their risk management activities which may have been previously restricted for the purpose of hedge accounting. 

Ind AS 32 and Ind AS 109 - Financial Instruments - Classification, recognition and measurement

Indian Accounting Standards (Ind AS)

Once a company starts following the Ind AS mandatorily on the basis of criteria specified, it will be required to follow the Ind AS for all the subsequent financial statements even if any of the criteria specified do not subsequently apply to it. Companies to which Ind AS are applicable should prepare their first set of financial statements in accordance with the Ind AS effective at the end of its first Ind AS reporting period i.e. companies preparing financial statements applying the Ind AS for the accounting period beginning on 1 April 2016 should apply the Ind AS effective for the financial year ending as on 31 March 2017.

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