Module: | SEBI LODR & Corporate Governance Frameworks
Q28: Consider the following statements regarding the amendments to Indian Accounting Standards (Ind AS) notified by the Ministry of Corporate Affairs, effective from April 1, 2025:
1. The amendments included enhanced disclosure requirements in Ind AS 7 specifically regarding the Statement of Cash Flows.
2. Ind AS 115 (Revenue from Contracts with Customers) was completely replaced by a newly drafted standard based exclusively on domestic Indian practices, diverging from IFRS.
3. The Accounting Standards Board issued an exposure draft for Ind AS 118 focusing on presentation and disclosure in financial statements to further converge with global standards.
Which of the above statements is/are incorrect?
2. Ind AS 115 (Revenue from Contracts with Customers) was completely replaced by a newly drafted standard based exclusively on domestic Indian practices, diverging from IFRS.
3. The Accounting Standards Board issued an exposure draft for Ind AS 118 focusing on presentation and disclosure in financial statements to further converge with global standards.
Which of the above statements is/are incorrect?
✅ Correct Answer: B
🎯 Quick Answer:
B. Only 2 is incorrect.Statement 2 is incorrect; Ind AS 115 was not replaced with a domestic standard; rather, it underwent minor revisions to refine terminology, ensuring it remains tightly aligned with its global counterpart (IFRS 15). Statement 3 is correct; the exposure draft for Ind AS 118 is part of the ongoing effort toward total global harmonization.
Historical/Related Context: India's transition to Ind AS began in phases from 2016 to ensure that Indian corporate financials are comparable on a global scale, facilitating foreign direct investment.
The 2025 updates represent periodic maintenance to sync with international updates.
Causal Reasoning: Maintaining convergence with IFRS prevents dual reporting burdens for multinational corporations and gives foreign institutional investors confidence that Indian revenue and cash flow figures reflect economic reality accurately.