MCA through a notification dated 23 June, 2021 has issued the Companies (Accounting Standards) Rules, 2021. The Accounting Standards (AS) notified under the Rules will be applicable to companies (other than companies to which Ind AS are applicable) including Small and Medium sized Companies (SMCs) in preparation of financial statements. The Rules prescribe revised definition of a SMC. According to it, SMC would mean a company which meets the following criteria as at the end of the relevant accounting period:
- Whose equity or debt securities are not listed or are not in the process of listing on any stock exchange, whether in India or outside India.
- Which is not a bank, financial institution or an insurance company.
- Whose turnover (excluding other income) does not exceed INR 250 crore (earlier INR 50 crore) in the immediately preceding accounting year.
- Which does not have borrowings (including public deposits) in excess of INR 50 crore (earlier INR 10 crore) at any time during the immediately preceding accounting year and
- Which is not a holding or subsidiary company of a company which is not a SMC.
The key standards notified under the Rules include:
- AS 9, Revenue Recognition
- AS 10, Property, Plant and Equipment
- AS 12, Accounting for Government Grants
- AS 14, Accounting for Amalgamations
- AS 15, Employee Benefits
- AS 16, Borrowing Costs
- AS 18, Related Party Disclosures
- AS 19, Leases
- AS 21, Consolidated Financial Statements
- AS 25, Interim Financial Reporting
- AS 26, Intangible Assets
- AS 28, Impairment of Assets
- AS 29, Provisions, Contingent Liabilities and Contingent Assets.
Effective date: The AS are effective for accounting periods beginning on or after 1 April, 2021
Source: MCA notification dated 23 June 2021
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