Indian companies must identify and apply the accounting framework that applies to their entity under current law. Ind AS applicability is determined by notified rules and criteria; it should not be described as a generic simplified standard that every SME may elect to use.
Identify the entity and applicable rules
Start with the entity type, listing status, group relationships, net worth and any transition or sector rules. The Companies Act and rules notify accounting standards and determine which companies must apply Ind AS or other applicable standards.
A small or medium business should not assume that accounting standards for companies, accounting standards for other entities and tax accounting rules are interchangeable. Ask the company’s auditor or qualified accountant to document the applicable framework.
Build records that support financial statements
- Maintain complete books and reconcile bank, sales, purchases, payroll, loans and taxes.
- Document estimates, related-party transactions, fixed assets and provisions.
- Apply accounting policies consistently and retain supporting evidence.
- Review changes in law, standards and auditor requirements before the financial year close.
Keep statutory reporting separate from management reports
Management accounts can help founders monitor cash flow and margins, but statutory financial statements have formal presentation, audit and filing requirements. Ensure the basis of preparation is clear in reports shared with lenders, investors and regulators.
Frequently asked questions
Is there a simplified Ind AS standard for all SMEs?
Do not assume that. Applicability is set by current notified rules; have an accountant identify the standards that apply to the entity.
Can management accounts replace statutory financial statements?
No. Management reports do not automatically meet statutory preparation, audit or filing obligations.
Official sources and further reading
Source pages are maintained by the relevant government authority. Check the current official guidance before applying; requirements can change.
This article provides general information, not legal, tax or professional advice. Rules and procedures may change; verify current requirements with the relevant authority or a qualified adviser before acting.
Related services
Accounting (Monthly)
Monthly books of accounts, P&L and Balance Sheet (MIS)
Statutory Audit
Statutory Audit Report and signed financial statements
Tax Audit
Tax Audit Report (Form 3CA/3CB-3CD)