With integrated global economies and cross-border mergers and acquisitions, uniformity of financial reporting by Indian companies is inevitable for the authenticity of their financial statements worldwide. The emergence of International Financial Reporting Standards (IFRS) marks the biggest revolution in financial reporting, though not without posing challenges of convergence in India. In order to harmonize with the financial reporting worldwide, the Institute of Chartered Accountants of India (ICAI) has issued 35 IND AS—the converged accounting standards which are in line with IFRS subject to certain carve outs (differences) due to tax-related issues, as notified by the Ministry of Corporate Affairs. With reference to this convergence, this paper provides an insight into the revised framework of AS 6 – Depreciation and AS 10 – Fixed Assets, with the formation of new IND AS 16 – Property, Plant and Equipment (PPE) and its implications through various illustrations. Moreover, the issues of recognition of assets are explained through different models of measurement, determination of their carrying amounts, accounting treatment of revaluation and depreciation charges on the assets. The analysis shows that adaptation to IFRS convergence opens new avenues for the accounting profession, followed by unforeseeable challenges. The analysis of the standard concludes that significant parts (components) of a PPE can be recognized, depreciated and derecognized separately and individually. There will be major changes in the value of PPE in the financial statements due to treatment of revaluation surplus.

The present Finance Minister, Arun Jaitely, in his 2014 Budget speech said that the converged Accounting Standards (AS) will become mandatory from FY 2016-17. However, it can be voluntarily adopted by companies from FY 2015-16. The convergence will enhance transparency and improve the quality of financial reporting by Indian companies, which is critical for attracting foreign capital into the country. The Ministry of Corporate Affairs (MCA), through a press release on January 2, 2015, issued a revised road map for companies other than banking, insurance and non-banking finance companies for implementation of IND AS converged with International Financial Reporting Standard (IFRS). This road map will definitely fulfil India’s longstanding commitment to the G20 nations for convergence with IFRS.

The Indian standard-setters have examined individual IFRS requirements and modified the present AS to IND AS to suit Indian conditions. With reference to the convergence of IND AS 16 to IAS 16, the present paper analyzes the new framework of IND AS 16.

Accounting Research and Audit Practices, Convergence, IND, International Financial Reporting Standards (IFRS), Property, Plant and Equipment (PPE), Institute of Chartered Accountants of India (ICAI), Accounting Standards (AS), Implications.