The Indian Corporate Affairs Ministry has implemented major updates to Indian Accounting Standards, targeting improved tax reporting, transparency, and alignment with international tax reforms, with changes taking effect from April 2026.
India’s Corporate Affairs Ministry has overhauled several Indian Accounting Standards, with changes that took effect on August 12 and are meant to improve tax reporting and financial disclosure for eligible companies. According to the ministry’s notification, the revisions are also intended to support India’s alignment with OECD Pillar Two tax reforms, which are designed to bring greater consistency to how large companies report income taxes across jurisdictions.
The package updates Ind AS 101, 107, 109, 110 and 7, covering areas ranging from annual improvements and financial instrument classification to hedge accounting, disclosure rules and cash-flow reporting. It also brings in guidance on contingent contractual cash flows, nature-dependent electricity contracts, electronic settlement of financial liabilities, non-recourse arrangements and the role of de facto agents, while refining transition provisions for some of the new requirements. Industry advisers say companies will need to review their current instruments, power contracts and disclosure systems closely to see where policy changes may be needed.
Shalu Kedia, associate partner at Nangia & Co LLP, said the most significant changes are the refinements to Ind AS 109 and the new treatment for contracts linked to nature-dependent electricity, including how companies assess whether those agreements are for own use and how hedge accounting applies. She also noted that related disclosure changes under Ind AS 107 will require firms to update how they present financial information to investors and regulators.
The ministry has said some of the amendments will apply for annual reporting periods beginning on or after April 1, 2026, while specific transition rules will govern the financial-instrument and electricity-contract changes. The notification also improves transition provisions under Ind AS 101, control assessment under Ind AS 110 and cash-flow treatment under Ind AS 7 for investments in associates, joint ventures and subsidiaries at cost. Kedia added that Ind AS 118 and Ind AS 119 are still being developed, so some IFRS 18 and IFRS 19 numbering remains in place for now.
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