Impact of Ind AS Adoption on the Financial Position of Companies in Pharmaceutical and Health Care Sector

Abstract

A new era of financial reporting started in India from 2016 because of the convergence of International Financial Reporting Standards with Indian GAAP and adoption of Indian Accounting Standards. Ind AS has become the new Indian GAAP for all the companies in India from the financial year 2016-17. The Ministry of Corporate Affairs realizing the difficulties in first time adoption and transitional issues, phase-wise the adoption of Ind AS has been made mandatory on the basis of the net worth and listing status of the companies. Phase I starts from 2016-17 covering listed or unlisted companies, those have net worth Rs. 500 Crores or above on 31st March, 2014 or 2015. Phase II starts from 2017-18 covering listed or unlisted companies which have net worth Rs. 250 Crores or above but less than Rs. 500 Crores on 31st March, 2014 or 2015 or 2016. Under phase III all the companies which are not covered under phase I or phase II will be mandatorily required to apply Ind AS from FY 2018-19. In this study the researcher has assessed the impact of Ind AS adoption on the Phase I companies in Pharmaceutical and Health Care sector which are listed in BSE Top 500 Companies.