MCA Notifies Ind AS Amendments 2025 with Key Updates

MCA Notifies Amendments to Ind AS Rules, 2025

The Ministry of Corporate Affairs (MCA) has notified the Companies (Indian Accounting Standards) Second Amendment Rules, 2025, introducing several important changes across multiple Ind AS standards. These amendments are aimed at aligning Indian accounting practices with global developments, improving transparency, and providing clarity in financial reporting. Most of the amendments will be effective from 1 April 2025.

Supplier Finance Arrangements and Liability Classification

Key updates include new disclosure requirements for supplier finance arrangements under Ind AS 7 (Statement of Cash Flows) and Ind AS 107 (Financial Instruments: Disclosures), enhancing visibility of financing structures involving suppliers. Additionally, amendments to Ind AS 1 (Presentation of Financial Statements) and Ind AS 10 (Events After the Reporting Period) clarify the classification of liabilities subject to covenants, ensuring consistency in presentation and reducing interpretation challenges.

Revenue, Leases, and Transitional Reliefs

The amendments also align revenue and lease-related references across Ind AS 115 (Revenue from Contracts with Customers) and Ind AS 116 (Leases) with international practices, thereby harmonizing interpretations. Further, transitional reliefs under Ind AS 101 (First-time Adoption of Indian Accounting Standards) have been updated to support companies migrating to Ind AS, easing compliance burdens during the initial adoption phase.

Pillar Two Tax Disclosures under Ind AS 12

A significant development is the introduction of OECD Pillar Two tax disclosure requirements under Ind AS 12 (Income Taxes). This amendment requires entities to disclose information relevant to global minimum tax rules, thereby enhancing transparency in tax reporting for multinational companies. Collectively, these changes reflect India’s commitment to keeping its accounting standards globally aligned while strengthening the quality and comparability of financial statements.

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