Ind AS 112: Disclosure of Interests in Other Entities Explained

Ind AS 112: Disclosure of Interests in Other Entities Classic Partner LLP Chartered Accountants · Goa Home/Blog/Accounting & Compliance/Ind AS 112 Accounting & Compliance Ind AS 112: Disclosure of Interests in Other Entities Explained What it requires, who it applies to, and the disclosures for subsidiaries, joint ventures, associates and unconsolidated structured entities. Author  Classic Partner LLP Published  27 August 2026 Category  Accounting & Compliance In short Ind AS 112 is a pure disclosure standard — it requires an entity to disclose information that lets a reader evaluate the nature of, and the risks arising from, its interests in subsidiaries, joint arrangements, associates and unconsolidated structured entities. Nothing in it changes how those interests are recognised or measured; that work is done by Ind AS 110, Ind AS 111 and Ind AS 28. More importantly, it probably doesn’t apply to your company at all: it bites only where the entity already reports under Ind AS and holds an interest in another entity. Ind AS 112, Disclosure of Interests in Other Entities, requires an entity to disclose information that lets a reader evaluate the nature of, and the risks arising from, its interests in subsidiaries, joint arrangements, associates and unconsolidated structured entities, together with the effect of those interests on its financial position, performance and cash flows. It is a pure disclosure standard. Nothing in it changes how any of those interests is recognised or measured; that work is done by Ind AS 110, Ind AS 111 and Ind AS 28. The more useful point comes first, and most articles on this standard skip it. Ind AS 112 probably does not apply to your company. It bites only where two conditions hold together: the entity already reports under Ind AS, and it holds an interest in another entity. A private company below the Ind AS thresholds, or an Ind AS company with no subsidiaries, joint ventures or associates, has nothing to disclose under it at all. As Chartered Accountants in Goa we see far more of the second group than the first, so the applicability test below comes before the technical detail. 01 What Does Ind AS 112 Actually Require? The standard requires two broad categories of disclosure: the significant judgements an entity made in deciding what its interests are, and detailed information about the interests themselves. Those significant judgements are what a reviewer turns to first. The judgement disclosures come first because they explain everything that follows. An entity must disclose the significant judgements and assumptions it made, and any changes to them, in determining that it controls another entity, that it has joint control of or significant influence over another entity, the type of joint arrangement where the arrangement is structured through a separate vehicle, and that it meets the definition of an investment entity where relevant. The information disclosures then cover interests in subsidiaries, in joint arrangements and associates, and in unconsolidated structured entities. There is also a catch-all: where the prescribed disclosures, taken with those required by other standards, do not meet the objective, the entity must disclose whatever additional information is needed. That provision turns the note from a checklist into a judgement exercise, and it is where accounting and compliance support usually earns its keep. 02 Does Ind AS 112 Apply to Your Business? Applicability turns on the reporting framework first and the existence of interests second. Both tests must be satisfied before a single disclosure is required. Your Situation Does Ind AS 112 Apply? What Applies Instead Ind AS company with subsidiaries, JVs or associates Yes, in full Complete disclosures in the consolidated financial statements. Ind AS company with no interests in other entities No Nothing arises under this standard. Ind AS company, separate financial statements Generally no Ind AS 27 disclosures, subject to two exceptions. Company outside the Ind AS roadmap No AS 21, AS 23 and AS 27 disclosures under the 2021 Rules. LLP, partnership firm, proprietorship No Outside the Companies Act accounting standards framework. Note One point in that table is routinely missed. Consolidated financial statements are required under Section 129(3) of the Companies Act, 2013 wherever a company has one or more subsidiaries, associates or joint ventures, whatever accounting framework it follows. The standard governs what goes into the disclosure note; Section 129(3) governs whether consolidated financial statements have to exist at all. The two questions are separate and are often conflated. 03 What Must You Disclose About Subsidiaries? For subsidiaries, the standard asks for the composition of the group and then focuses hard on non-controlling interests and on anything that restricts the group’s freedom to use its own assets. Composition of the group. Enough information for a reader to understand what the group consists of. Subsidiaries with material non-controlling interests. Name, principal place of business, the proportion of ownership interest and voting rights held by non-controlling interests, profit or loss allocated to them during the period, accumulated non-controlling interests at the reporting date, and summarised financial information about the subsidiary itself. Significant restrictions. The nature and extent of statutory, contractual or regulatory restrictions on the group’s ability to access or use assets and settle liabilities, including restrictions on transferring cash or other assets between group entities. Consolidated structured entities. The nature of, and changes in, the risks associated with interests in structured entities that are consolidated. Changes in ownership. The consequences of changes in ownership interest that do not result in loss of control, and the consequences of losing control of a subsidiary during the period. Two words in that list do the heavy lifting. “Material” governs which subsidiaries attract the full non-controlling interests package, and “significant” governs which restrictions must be described. Both are significant judgements in their own right, both must be applied consistently between periods, and both are areas auditors question. 04 What Must You Disclose About Joint Arrangements and Associates? For joint arrangements and associates, the standard asks for identification, measurement basis, financial information proportionate to materiality, and the risks the interest creates. Identification covers the name of

IFRS vs Ind AS: Key Differences Every Indian Business Must Know

IFRS vs Ind AS: Key Differences Every Indian Business Must Know Classic Partner LLP Chartered Accountants · Goa Accounting & Compliance IFRS vs Ind AS: Key Differences Every Indian Business Must Know Which standards apply to your business, where the two frameworks genuinely diverge, and what the position is under the law as it stands in 2026. Author  Classic Partner LLP Published  18 August 2026 Category  Accounting & Compliance In short Ind AS is converged with IFRS, not adopted from it — India kept the IFRS text as its base and layered on a defined set of carve‑outs. More importantly, Ind AS probably doesn’t apply to your business at all: it reaches listed companies, unlisted companies above a prescribed net worth, and their group entities. Everyone else uses the older Accounting Standards. The single most useful thing to understand about IFRS vs Ind AS is that Ind AS is converged with IFRS, not adopted from it. India took the IFRS text as its base and then applied a defined set of changes, known as carve‑outs and carve‑ins, which alter how specific transactions are recognised, measured and presented. Because of those changes, a set of Ind AS financial statements cannot claim unreserved compliance with IFRS as issued by the International Accounting Standards Board. The second thing is more immediately practical, and most articles on this subject skip it entirely: Ind AS probably does not apply to your business. It applies to listed companies and to unlisted companies above a prescribed net worth, together with their group entities. Every other company applies the older Accounting Standards, and LLPs, partnership firms and proprietorships sit outside the Companies Act framework altogether. This guide sets out where the two frameworks genuinely diverge, but it starts with the question that decides whether any of it affects you. 01 What Is the Difference Between IFRS vs Ind AS? IFRS is the set of standards issued by the International Accounting Standards Board and applied in over a hundred jurisdictions worldwide. Ind AS is the Indian equivalent, notified under the Companies (Indian Accounting Standards) Rules, 2015, made under the Companies Act, 2013, with the Institute of Chartered Accountants of India recommending the text and the Ministry of Corporate Affairs notifying it. Structurally the two are close, and deliberately so. Ind AS numbering maps directly onto IFRS numbering, so Ind AS 115 corresponds to IFRS 15 on revenue, Ind AS 116 to IFRS 16 on leases and Ind AS 109 to IFRS 9 on financial instruments. Recognition and measurement are identical in the large majority of cases. The divergences are specific and confined to a handful of areas, which is precisely what makes them easy to miss: a preparer who assumes equivalence will be right most of the time and materially wrong on the rest. There is a third framework this comparison usually forgets, and for most Indian businesses it is the only one that matters. Companies below the Ind AS thresholds continue to apply the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2021. Establishing which of the three frameworks applies to a particular entity is the first question in any engagement, and it is where our accounting and compliance services begin rather than end. 02 Which Accounting Standards Actually Apply to Your Business? Before the IFRS vs Ind AS comparison means anything, applicability turns on entity type first and size second. Getting this wrong in either direction is expensive: applying Ind AS when it is not required imposes cost for no benefit, and failing to apply it when it is required produces a qualified audit report. Type of Entity Framework That Applies What This Means in Practice Listed, or listing in process Ind AS Full Ind AS reporting in Schedule III Division II format, with consolidated statements where a group exists. Unlisted, above net worth threshold Ind AS Same as above; the threshold is tested on audited figures, not management estimates. Holding / subsidiary / JV / associate of a covered company Ind AS Drawn in by the group relationship regardless of the entity’s own size — surprises most mid‑sized businesses. Every other company AS (2021 Rules) The framework most private limited companies in India actually use; Ind AS is not required. LLP, partnership, proprietorship Outside Companies Act Books maintained under income tax law; the auditor’s own standards apply where an audit is required. Non‑banking financial company Ind AS, own timetable Applicability follows a distinct phased schedule; confirm the position for the specific class of NBFC. Note The group route is the one that catches growing businesses. A small private company that becomes the subsidiary of a covered company is pulled into Ind AS by that relationship alone, whatever its own size. If an investment, acquisition or group restructuring is on the horizon, test the reporting consequence before the transaction closes rather than after. 03 What Are the Main Carve‑Outs Between IFRS vs Ind AS? Seven divergences between IFRS vs Ind AS account for most of the reconciliation work in practice. Each was a deliberate policy choice rather than an oversight, generally made to accommodate Indian legal requirements or the prescribed presentation format. Area / Standard IFRS Position Ind AS Position Bargain purchase gainIFRS 3 / Ind AS 103 Recognised in profit or loss. Recognised in OCI, accumulated in capital reserve. Investment propertyIAS 40 / Ind AS 40 Cost or fair value model, at entity’s option. Cost model only; fair value disclosed, not used to measure. Government grants for assetsIAS 20 / Ind AS 20 Deferred income, or deducted from carrying amount. Deferred income only; deduction option removed. Foreign currency convertible bondsIAS 32 / Ind AS 32 Fixed‑for‑fixed test; conversion option is a liability. Conversion option may be classified as equity. Lease escalationIFRS 16 / Ind AS 116 Payments straight‑lined over the lease term. Escalation in line with expected inflation need not be straight‑lined. Breach of loan covenantIAS 1 / Ind AS 1 Waiver must be agreed by reporting date. A waiver agreed before approval of financials is sufficient.