In this blog, we will discuss an overview of the Indian Accounting Standard (IND-AS).
IND AS are converged standards for International Financial Reporting Standards (IFRS).
As IND AS are converged standards for IFRS, IFRS are not adopted as it is. Specific changes have been made in IFRS after considering the economic environment of the country. These differences are due to differences in applying accounting principles and practices and economic conditions prevailing in the country. These differences, which are different from accounting principles stated in IFRS, are commonly known as ‘Carve-Outs.’
In short, carve-outs means specific requirements of IFRS that are not adopted in IND AS.
In IND AS, there is some additional guidance given over and above what is given in IFRS. This is called ‘Carve-in.’
IND-AS requires that all the balance sheet items and profit and loss items should be displayed at fair value.
To accommodate the requirement of IND-AS in dynamics 365 finance and operation. We may use posting layers.
In Dynamics 365 finance and operation, we have ten posting layers, out of which three layers are Current, Operation, and Tax, and the other seven are custom layers.
Using the Current layer and Operation layer (Or any other layer) can fulfill the requirement of IND-AS.
E.g., for Fixed asset Accounting standard required that all fixed assets should be valued at cost. But in IND-AS, all items of property, plant, and equipment whose fair value can be measured reliably must be carried at a revalued amount, being its fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
To fulfill the requirement of IND AS in Dynamics 365, we will post the cost amount of fixed asset in the Current layer, and any upward/downward valuation on investment as compared to its fair value required by IND AS will be posted in the Operation layer (Or any other layer).
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