This article is written by CA Bhuvnesh Goyal. The article discuss the provisions of Section 133 of the Companies Act 2013 which provides for the powers of Central Government to prescribe Accounting Standards.
Central Government to prescribe accounting standards.
Section 133 of the Companies Act, 2013 States that the government can set rules for accounting, but only after considering recommendations from the Institute of Chartered Accountants of India (ICAI) and another group called the National Financial Reporting Authority (NFRA).
Before the NFRA was formed, the government could still set accounting rules after consulting with the ICAI and a group called the National Advisory Committee on Accounting Standards.
Legal text of section 133 of the companies act, 2013
The Central Government may prescribe the standards of accounting or any addendum thereto, as recommended by the Institute of Chartered Accountants of India, constituted under section 3 of the Chartered Accountants Act, 1949 (38 of 1949), in consultation with and after examination of the recommendations made by the National Financial Reporting Authority.
1[Provided that until the National Financial Reporting Authority is constituted under section 132 of the Companies Act, 2013 (18 of 2013), the Central Government may prescribe the standards of accounting or any addendum thereto, as recommended by the Institute of Chartered Accountants of India, constituted under section 3 of the Chartered Accountants Act, 1949 (38 of 1949), in consultation with and after examination of the recommendations made by National Advisory Committee on Accounting Standards Constituted under section 210A of the Companies Act, 1956”.]
Amendment to Section 133 of Companies Act, 2013
1. Inserted by 2nd Order dated 29th March, 2016.
Applicable rules with respect to section 133 of the companies act 2013
Transitional Provisions with Respect to Accounting Standards
The Companies (Indian Accounting Standards) Rules, 2015
In exercise of the powers conferred by section 133 read with section 469 of the Companies Act, 2013 (18 of 2013) and sub-section (1) of section 210A of the Companies Act, 1956 (1 of 1956), the Central Government, in consultation with the National Advisory Committee on Accounting Standards, hereby makes the following rules, namely:-
Rule 3 of The Companies (Indian Accounting Standards) Rules, 2015
Applicability of Accounting Standards.-
(1) The accounting standards as specified in the Annexure to these rules to be called the Indian Accounting Standards (Ind AS) shall be the accounting standards applicable to classes of companies specified in rule 4.
(2) The Accounting standards as specified in Annexure to the Companies (Accounting Standards) Rules, 2006 shall be the Accounting Standards applicable to the companies other than the classes of companies specified in rule 4.
(3) A company which follows the Indian Accounting Standards (Ind AS) specified in Annexure to these rules in accordance with the provisions of rule 4 shall follow such standards only.
(4) A company which follows the accounting standards specified in Annexure to the Companies (Accounting Standards) Rules, 2006 shall comply with such standards only and not the Standards specified in Annexure to these rules.
Annexure to the the Companies (Indian Accounting Standards) Rules, 2015
A. General Instruction.-
(1) Indian Accounting Standards, which are specified, are intended to be in conformity with the provisions of applicable laws. However, if due to subsequent amendments in the law, a particular Indian Accounting Standard is found to be not in conformity with such law, the provisions of the said law shall prevail and the financial statements shall be prepared in conformity with such law.
(2) Indian Accounting Standards are intended to apply only to items which are material.
(3) The Indian Accounting Standards include paragraphs set in bold italic type and plain type, which have equal authority. Paragraphs in bold italic type indicate the main principles. An individual Indian Accounting Standard shall be read in the context of the objective, if stated, in that Indian Accounting Standard and in accordance with these General Instructions.
Notified Indian Accounting Standards
Notifications | Description |
G.S.R 111(E) dated 16 Feb 2015 | The Companies (Indian Accounting Standards) Rules, 2015. |
Indian Accounting Standard (Ind AS) 101 | First-time Adoption of Indian Accounting Standards |
Indian Accounting Standard (Ind AS) 102 | Share-based Payment |
Indian Accounting Standard (Ind AS) 103 | Business Combinations |
Indian Accounting Standard (Ind AS) 104 | Insurance Contracts |
Indian Accounting Standard (Ind AS) 105 | Non-current Assets Held for Sale and Discontinued Operations |
Indian Accounting Standard (Ind AS) 106 | Exploration for and Evaluation of Mineral Resources |
Indian Accounting Standard (Ind AS) 107 | Financial Instruments: Disclosures |
Indian Accounting Standard (Ind AS) 108 | Operating Segments |
Indian Accounting Standard (Ind AS) 109 | Financial Instruments |
Indian Accounting Standard (Ind AS) 110 | Consolidated Financial Statements |
Indian Accounting Standard (Ind AS) 111 | Joint Arrangements |
Indian Accounting Standard (Ind AS) 112 | Disclosure of Interests in Other Entities |
Indian Accounting Standard (Ind AS) 113 | Fair Value Measurement |
Indian Accounting Standard (Ind AS) 114 | Regulatory Deferral Accounts |
Indian Accounting Standard (Ind AS) 115 | Revenue from Contracts with Customers |
Indian Accounting Standard (Ind AS) 1 | Presentation of Financial Statements |
Indian Accounting Standard (Ind AS) 2 | Inventories |
Indian Accounting Standard (Ind AS) 7 | Statement of Cash Flows |
Indian Accounting Standard (Ind AS) 8 | Accounting Policies, Changes in Accounting Estimates and Errors |
Indian Accounting Standard (Ind AS) 10 | Events after the Reporting Period |
Indian Accounting Standard (Ind AS) 12 | Income Taxes |
Indian Accounting Standard (Ind AS) 16 | Property, Plant and Equipment |
Indian Accounting Standard (Ind AS) 17 | Leases |
Indian Accounting Standard (Ind AS) 19 | Employee Benefits |
Indian Accounting Standard (Ind AS) 20 | Accounting for Government Grants and Disclosure of Government Assistance |
Indian Accounting Standard (Ind AS) 21 | The Effects of Changes in Foreign Exchange Rates |
Indian Accounting Standard (Ind AS) 23 | Borrowing Costs |
Indian Accounting Standard (Ind AS) 24 | Related Party Disclosures |
Indian Accounting Standard (Ind AS) 27 | Separate Financial Statements |
Indian Accounting Standard (Ind AS) 28 | Investments in Associates and Joint Ventures |
Indian Accounting Standard (Ind AS) 29 | Financial Reporting in Hyperinflationary Economies |
Indian Accounting Standard (Ind AS) 32 | Financial Instruments: Presentation |
Indian Accounting Standard (Ind AS) 33 | Earnings per Share |
Indian Accounting Standard (Ind AS) 34 | Interim Financial Reporting |
Indian Accounting Standard (Ind AS) 36 | Impairment of Assets |
Indian Accounting Standard (Ind AS) 37 | Provisions, Contingent Liabilities and Contingent Assets |
Indian Accounting Standard (Ind AS) 38 | Intangible Assets |
Indian Accounting Standard (Ind AS) 40 | Investment Property |
Indian Accounting Standard (Ind AS) 41 | Agriculture |
