Simple Comparison of IND AS with Tax accounting Standard

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Topic	ICD (Tax acing Std)	Indian GAAP	New IND AS
Mark to market loss	Shall not be recognized.	Allowed to be recognized.	No specific directions but based on prudent test, allowed.
Prior period loss	Not covered	Separate disclosure	Re-statement of profit of earlier period.
Construction contract Inventory	Out of scope of inventory	Included in inventory	Included in inventory
Inventory – deferred settlement	Not covered	Not covered	Credit terms to be recognized as interest expenses.
Inventory cost formula	FIFO or weighted average	No specific	No specific
Inventory – reversal of write down of inventory	Not covered	Not covered	Allowed.
Inventory in case of dissolution	Valued at NRV	Not covered	Not covered
Definition of revenue	Same as Indian GAAP	Gross inflow of cash	Increase in economic benefit.
Contract revenue	Percentage completion method only	Both percentage completion and completed service method applicable	Entity satisfies a performance obligation.
Contract incidental income	Reduce the contract cost accordingly	Other income	Not covered
Non cash considerations	Not covered	Not covered	Measured at fair value.
Estimated cost of dismantling of PPE	Not covered	Not covered	Included in cost.
PPE Revaluation	Not covered	Not covered	Allowed.
PPE Depreciation	Under income tax act.	Follow sch II of Co. Act.	Each components requires to depreciate separately.
PPE – Compensation for impairment	Not covered	Not covered	To be considered in P&L.
PPE – residual value	Not covered	Not covered	Required to be reviewed at end of each year.
PPE – reassessment of useful life	Not covered	Not covered	Required.
PPE- method of depreciation	Not covered	Straight line or WDV	Number of options.
PPE – Change in method of depreciation	Not covered	Retrospective re-computation	Considered as change in accounting estimate
PPE – sale of assets	Not covered	Not covered	To be considered in P&L.
PPE – changes in decommission	Not covered`	Not covered	Requires to be adjust in capital cost.
Topic	ICD (Tax acing Std)	Indian GAAP	New IND AS
Forex – MTM	Recognized only at settlement	MTM allowed	MTM allowed
GG – discounted loan	Not covered`	Not covered`	Required to be accounted separately.
Scope of  Security	Only stock in trade	Stock –out of scope	Broader definition.
Valuation of security	At cost	At cost	At fair value
Borrowing cost	Similar to Indian GAAP	Simple terms.	Concept of effective interest method
PCCA – Discounting	No discounting for future	No discounting for future	discounting for future
Contingent assets	Require to recognize	Not  Require to recognize	Not  Require to recognize
PCCA measurement	Best estimate	No guidelines	No guidelines

 

 

*PPE means Property, plant and equipment.

**GG – Government Grant 

***PCCA – Provision, Contingent liabilities and Contingent assets.